A-30326, FEBRUARY 19, 1930, 9 COMP. GEN. 361

A-30326: Feb 19, 1930

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CONTRACTS - MISTAKE IN BID - CORRECTION WHERE A BID TO FURNISH A NUMBER OF VALVES FOR THE GOVERNMENT WAS ACCEPTED AND THEREAFTER THE BIDDER URGED MISTAKE IN SUBMISSION OF THE BID IN THAT THE PRICES QUOTED WERE BASED ON FURNISHING A TYPE OF VALVE NOT IN ACCORDANCE WITH THE SPECIFICATIONS. THE MISTAKE NOT BEING APPARENT ON THE FACE OF THE BID AND THE DIFFERENCE BETWEEN THE ACCEPTED BID AND THE OTHER BIDS SUBMITTED NOT BEING SUCH AS TO PUT THE GOVERNMENT CONTRACTING OFFICER ON NOTICE THAT A MISTAKE HAD BEEN MADE WHEN THE OFFER WAS ACCEPTED AND WHICH WOULD RAISE THE IMPLICATION THAT THE OFFER WAS ACCEPTED WITH THE INTENTION OF TAKING ADVANTAGE OF THE MISTAKE. THE BID MAY NOT BE CORRECTED NOR IS THE BIDDER ENTITLED TO BE PAID ANY AMOUNT IN EXCESS OF THE BID PRICE.

A-30326, FEBRUARY 19, 1930, 9 COMP. GEN. 361

CONTRACTS - MISTAKE IN BID - CORRECTION WHERE A BID TO FURNISH A NUMBER OF VALVES FOR THE GOVERNMENT WAS ACCEPTED AND THEREAFTER THE BIDDER URGED MISTAKE IN SUBMISSION OF THE BID IN THAT THE PRICES QUOTED WERE BASED ON FURNISHING A TYPE OF VALVE NOT IN ACCORDANCE WITH THE SPECIFICATIONS, THE MISTAKE NOT BEING APPARENT ON THE FACE OF THE BID AND THE DIFFERENCE BETWEEN THE ACCEPTED BID AND THE OTHER BIDS SUBMITTED NOT BEING SUCH AS TO PUT THE GOVERNMENT CONTRACTING OFFICER ON NOTICE THAT A MISTAKE HAD BEEN MADE WHEN THE OFFER WAS ACCEPTED AND WHICH WOULD RAISE THE IMPLICATION THAT THE OFFER WAS ACCEPTED WITH THE INTENTION OF TAKING ADVANTAGE OF THE MISTAKE, THE BID MAY NOT BE CORRECTED NOR IS THE BIDDER ENTITLED TO BE PAID ANY AMOUNT IN EXCESS OF THE BID PRICE.

DECISION BY COMPTROLLER GENERAL MCCARL, FEBRUARY 19, 1930:

THE STANDARDIZED SANITARY MANUFACTURING COMPANY REQUESTED REVIEW OF SETTLEMENT 020954, DATED JANUARY 4, 1930, WHEREIN WAS DISALLOWED ITS CLAIM FOR $519.11, THE BALANCE ALLEGED TO BE DUE FOR VALVES FURNISHED THE UNITED STATES NAVY YARD, BROOKLYN, N.Y., UNDER CONTRACT NO. N-140-S 21298, DATED APRIL 3, 1929.

IT APPEARS THAT BIDS WERE REQUESTED FOR THE FURNISHING OF CERTAIN SUPPLIES FOR THE NAVY DEPARTMENT, NAVY YARD, BROOKLYN, N.Y., AMONG WHICH WERE ITEMS 27 AND 28, WHICH CALLED FOR A QUANTITY OF VALVES, MIXING STEAM AND WATER, WITH THERMOSTATIC CONTROL, STEAM TYPE L-9-E OF THE LEONARD- ROOKE COMPANY, INC., MANUFACTURER, OR EQUAL. FOUR BIDS WERE RECEIVED AS FOLLOWS:

TABLE

ITEM NO. 27 ITEM NO. 28 TOTAL STANDARD SANITARY MFG. CO. ------- $49.68 EA. $49.68 EA. $1,142.64 A. B. SANDS AND SON CO. ---------- 72.25 EA. 78.75 EA. 1,668.25 J. L. MOTT IRON WORKS ------------ 78.65 EA. 85.80 EA. 1,816.10 LEONARD-ROOKE CO. ---------------- 110.00 EA. 120.00 EA. 2,040.70

LESS 20 PERCENT DISCOUNT, PLUS DELIVERY CHARGES $8.70 ----

(THE LATTER BID WAS DEFECTIVE IN THAT THE BIDDER FAILED TO SUBMIT GUARANTEE AS REQUIRED BY THE SPECIFICATIONS.)

THE BIDS WERE OPENED MARCH 18, 1929, AND THE BID OF THE STANDARD SANITARY MANUFACTURING COMPANY OFFERING TO FURNISH BOTH ITEMS AT A PRICE OF $49.68 EACH, OR A TOTAL OF $1,142.64 FOR THE 23 VALVES, BEING THE LOWEST BID RECEIVED, WAS ACCEPTED AND A FORMAL CONTRACT DATED APRIL 3, 1929, WAS ENTERED INTO, THE DATE OF EXECUTION OF THE PERFORMANCE BOND BEING APRIL 22, 1929.

IT APPEARS THAT AFTER RECEIPT OF THE FORMAL CONTRACT--- EVIDENTLY ON SOME DATE BETWEEN APRIL 3 AND APRIL 10, 1929--- THE SAID COMPANY ALLEGED A MISTAKE IN THE SUBMISSION OF ITS BID. WHILE THERE IS NOT BEFORE THIS OFFICE ANY COMMUNICATION FROM THE CONTRACTOR AS TO WHAT THE MISTAKE CONSISTS OF OR HOW IT OCCURRED, THE ADMINISTRATIVE DEPARTMENT REPORTS THAT THE CONTRACTOR REPORTED THAT "THROUGH MISUNDERSTANDING OF THE SPECIFICATIONS, THE PRICES QUOTED HAD BEEN BASED ON FURNISHING A TYPE OF VALVE MANUFACTURED BY THE LEONARD-ROOKE CO., NOT IN ACCORDANCE WITH THE SPECIFICATIONS, WHICH IS CHEAPER THAN THE ONE MEETING THE SPECIFICATIONS," AND THAT THE CONTRACTOR REQUESTED TO BE PERMITTED, IF POSSIBLE,"TO INCREASE ITS PRICE TO AN AMOUNT "LESS THAN THAT OF OUR NEXT LOW BIDDER.'" THE CONTRACTOR WAS ADVISED UNDER DATE OF APRIL 10,1929, THAT THERE WAS NO AUTHORITY IN THE NAVY DEPARTMENT TO CHANGE THE PRICE AND THAT DELIVERY SHOULD BE MADE. DELIVERY WAS MADE, THE CONTRACT PRICE HAS BEEN PAID, AND CLAIMANT NOW CLAIMS THE SUM OF $519.11 WHICH AMOUNT REPRESENTS THE DIFFERENCE BETWEEN ITS BID ON ITEM 27 AND 28 AND THE NEXT LOWEST BID AS TO SAID ITEMS; THAT IS, CLAIMANT AGREES TO ACCEPT PAYMENT ON THE BASIS OF $72.25 EACH FOR THE 23 VALVES DELIVERED, OR A TOTAL OF $1,661.75, WHICH IS $6.50 LESS THAN THE NEXT LOWEST BIDS.

THE OFFICER IN CHARGE OF THE NAVY PURCHASING OFFICE, NEW YORK, IN HIS INDORSEMENT OF NOVEMBER 19, 1929, STATES THAT:

IN MAKING AWARD TO THE LOWEST BIDDER, STANDARD SANITARY MFG. CO., THIS OFFICE OVERLOOKED THE FACT THAT, ACCORDING TO DATA SUBMITTED, ALL THE BIDDERS WERE OFFERING VALVES MANUFACTURED BY LEONARD-ROOKE CO., PROVIDENCE, R.I.; OTHERWISE, BEFORE MAKING AWARD IT WOULD HAVE REQUESTED THE LOWEST BIDDER TO CHECK THE PRICES QUOTED.

IN CONSIDERING THE MATTER OF ALLEGED MISTAKE IN BIDS, I HAD OCCASION TO SAY IN 8 COMP. GEN. 397, THAT THE MATTER OF SUBMITTING BIDS FOR THE ADVERTISED NEEDS OF THE GOVERNMENT IS NOT ONE FOR SUCH NEGLECTFUL TREATMENT BY BIDDERS AS TO GIVE FREQUENT CAUSE FOR ATTEMPTED WITHDRAWALS ON ACCOUNT OF ALLEGED ERROR, AS THE BUSINESS OF THE GOVERNMENT CAN NOT GO FORWARD IN AN ORDERLY MANNER IF BIDDERS ARE ENCOURAGED OR PERMITTED TO SUBMIT INADEQUATELY CONSIDERED PROPOSALS WITH THE UNDERSTANDING THAT THEY MAY WITHDRAW OR INCREASE THE PRICE BY SIMPLY ALLEGING ERROR ON THEIR PART WHEN AFTER OPENING OF BIDS IT SHOULD BE REVEALED THAT THE PROFIT IS NOT ALL THAT IT MIGHT HAVE BEEN, OR THAT, THROUGH THE BIDDER'S CARELESSNESS, A LOSS IS TO BE SUSTAINED.

IN ORDER TO AUTHORIZE RELIEF ON ACCOUNT OF A MISTAKE IN AN ACCEPTED BID IT MUST APPEAR THAT THE MISTAKE WAS MUTUAL OR THAT THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE ACCEPTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286, 6 COMP. GEN. 504, 526. IN OTHER WORDS, AS STATED BY MR. JUSTICE MCKENNA IN DELIVERING THE OPINION OF THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF MOFFETT, HODGKINS AND COMPANY V. ROCHESTER, 178 U.S. 373, 385---

THE PARTY ALLEGING THE MISTAKE MUST SHOW EXACTLY IN WHAT IT CONSISTS AND THE CORRECTION THAT SHOULD BE MADE. THE EVIDENCE MUST BE SUCH AS TO LEAVE NO REASONABLE DOUBT UPON THE MIND OF THE COURT AS TO EITHER OF THESE POINTS. THE MISTAKE MUST BE MUTUAL AND COMMON TO BOTH PARTIES TO THE INSTRUMENT. * * *.

IT WOULD APPEAR THAT IN THIS CASE THE BID SUBMITTED WAS THE BID INTENDED TO BE SUBMITTED ALTHOUGH BASED ON AN ERRONEOUS ASSUMPTION AS TO WHAT THE SPECIFICATIONS REQUIRED. THE GENERAL STATEMENT THAT THE ERROR WAS DUE TO MISUNDERSTANDING OF THE SPECIFICATIONS AND THAT BIDS WERE ON VALVES NOT IN ACCORDANCE WITH THE SPECIFICATIONS IS NOT THE SUBMISSION OF SUCH CONCLUSIVE PROOF AS TO LEAVE NO ROOM FOR DOUBT THAT A MISTAKE OCCURRED, IN WHAT IT CONSISTS, AND THE CORRECTION THAT SHOULD BE MADE, IN ACCORDANCE WITH THE PRINCIPLES ANNOUNCED IN THE MOFFETT, HODGKINS AND CO. CASE, SUPRA. SEE, ALSO, DECISION OF FEBRUARY 5, 1930, A-30312, 9 COMP. GEN. 339.

FURTHERMORE, THERE WAS NO ALLEGATION OF MISTAKE IN THIS CASE UNTIL AFTER THE BID HAD BEEN ACCEPTED IN GOOD FAITH WITHOUT NOTICE OF MISTAKE. WHILE CLAIMANT'S BID WAS CONSIDERABLY LOWER THAN THAT OF THE OTHER BIDDERS THERE IS NOTHING THEREON FROM WHICH KNOWLEDGE ON THE PART OF THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE MAY BE PRESUMED NOR DOES A COMPARISON OF THE CLAIMANT'S BID WITH THE OTHER BIDS DISCLOSE ANYTHING FROM WHICH KNOWLEDGE OF THE MISTAKE MUST BE PRESUMED. IF THE CLAIM OF MISTAKE IN THIS INSTANCE HAD BEEN MADE BEFORE ACCEPTANCE, IT IS POSSIBLE THERE COULD HAVE BEEN MADE SUCH A SHOWING AS TO AUTHORIZE WITHDRAWAL OR CORRECTION OF THE BID, BUT SINCE THE MISTAKE WAS NOT ALLEGED UNTIL AFTER ACCEPTANCE, AND WAS NOT A MUTUAL MISTAKE, THERE IS NO LEGAL BASIS FOR ALLOWING ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE. SEE 7 COMP. GEN. 414; ID. 493.