A-41554, JUNE 10, 1932, 11 COMP. GEN. 473

A-41554: Jun 10, 1932

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CONTRACTS - MISTAKE IN BID WHERE THE ACCEPTED BID OF A CONTRACTOR FOR FURNISHING STEEL TO THE GOVERNMENT WAS SUBSEQUENTLY FOUND TO HAVE BEEN BASED ON AN ERRONEOUS QUOTATION OF PRICES BY A SUBCONTRACTOR. THERE IS NO LEGAL BASIS ON WHICH PAYMENT MAY BE AUTHORIZED TO THE CONTRACTOR OF ANY SUM IN EXCESS OF THE AMOUNT STATED IN ITS CONTRACT. BY WHICH WAS DISALLOWED THE SUM OF $142.47 OF ITS TOTAL CLAIM OF $173.45 FOR COMPLETING PERFORMANCE OF ITS WAR DEPARTMENT AIR CORPS CONTRACT NO. THE RECORD SHOWS THAT THERE WERE 206 1/2 FEET OF FLAT STEEL BARS ( 1/8 INCH BY 4 INCHES) DELIVERED AND ACCEPTED UNDER SAID CONTRACT. UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR IS ENTITLED TO BE PAID THEREFOR AT THE RATE OF $0.15 PER FOOT.

A-41554, JUNE 10, 1932, 11 COMP. GEN. 473

CONTRACTS - MISTAKE IN BID WHERE THE ACCEPTED BID OF A CONTRACTOR FOR FURNISHING STEEL TO THE GOVERNMENT WAS SUBSEQUENTLY FOUND TO HAVE BEEN BASED ON AN ERRONEOUS QUOTATION OF PRICES BY A SUBCONTRACTOR, NECESSITATING THE PROCUREMENT THEREOF BY THE CONTRACTOR FROM ANOTHER SUBCONTRACTOR AT AN INCREASED PRICE, THERE IS NO LEGAL BASIS ON WHICH PAYMENT MAY BE AUTHORIZED TO THE CONTRACTOR OF ANY SUM IN EXCESS OF THE AMOUNT STATED IN ITS CONTRACT.

DECISION BY COMPTROLLER GENERAL MCCARL, JUNE 10, 1932:

THE MIAMI-HOLLIDAY STEEL CO. APPLIED MAY 7, 1932, FOR REVIEW OF SETTLEMENT NO. 0276818, DATED APRIL 28, 1932, BY WHICH WAS DISALLOWED THE SUM OF $142.47 OF ITS TOTAL CLAIM OF $173.45 FOR COMPLETING PERFORMANCE OF ITS WAR DEPARTMENT AIR CORPS CONTRACT NO. W-31-3891, DATED JUNE 22, 1931, FOR FURNISHING 220 FEET OF FLAT STEEL BARS, 1/8 INCH BY 4 INCHES.

UNDER THE TERMS AND CONDITIONS OF THE CONTRACT, THE MIAMI-HOLLIDAY STEEL CO. AGREED, FOR AND IN CONSIDERATION OF THE PAYMENT OF $0.15 PER FOOT, OR A TOTAL OF $33, TO FURNISH TO THE UNITED STATES ARMY QUARTERMASTER AT WRIGHT FIELD, WRIGHT, GREEN COUNTY, OHIO, F.O.B. DESTINATION, 220 FEET OF FLAT STEEL BARS, 1/8 INCH BY 4 INCHES, MANUFACTURED IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATION 57-107 15.

THE RECORD SHOWS THAT THERE WERE 206 1/2 FEET OF FLAT STEEL BARS ( 1/8 INCH BY 4 INCHES) DELIVERED AND ACCEPTED UNDER SAID CONTRACT. UNDER THE TERMS OF THE CONTRACT THE CONTRACTOR IS ENTITLED TO BE PAID THEREFOR AT THE RATE OF $0.15 PER FOOT, AMOUNTING TO $30.98.

THE CONTRACTOR, HOWEVER, ASSERTS THAT IT IS ENTITLED TO AN ADDITIONAL SUM OF $142.47 IN EXCESS OF THE CONTRACT PRICE, OR A TOTAL OF $173.45 FOR PERFORMANCE OF ITS CONTRACT, INASMUCH AS IT WAS REQUIRED TO PAY A HIGHER PRICE FOR THE STEEL BARS FURNISHED THAN HAD BEEN ANTICIPATED, ON ACCOUNT OF THE FAILURE OF ITS CONTEMPLATED SOURCE OF SUPPLY WHICH NECESSITATED ITS OBTAINING THE REQUIRED STEEL FROM ANOTHER SOURCE OF AN INCREASED PRICE.

IT APPEARS THAT THE CLAIMANT SUBMITTED ITS BID PRICE OF 15 CENTS PER FOOT FOR FURNISHING THE REQUIRED STEEL BARS WITH THE EXPECTATION THAT SAME COULD BE PROCURED FROM THE FITZSIMONS CO., YOUNGSTOWN, OHIO, FROM WHOM IT HAD OBTAINED A PRICE QUOTATION THEREON; THAT AFTER ITS SAID BID HAD BEEN ACCEPTED BY THE GOVERNMENT IT WAS FOUND THAT THE FITZSIMONS CO. HAD MADE A MISTAKE IN ITS PRICE QUOTATION IN THAT THE STEEL ON WHICH SAME WAS GIVEN WOULD NOT MEET THE SPECIFICATION REQUIREMENTS OF THE GOVERNMENT; THAT, SUBSEQUENTLY, THE CLAIMANT CONTRACTOR PROCURED THE NECESSARY STEEL BARS MEETING THE CONTRACT REQUIREMENTS FROM THE CYCLOPS STEEL CO., TITUSVILLE, A., AT AN INCREASED PRICE OVER THAT QUOTED TO IT BY THE FITZSIMONS CO., AND DELIVERED SAME TO THE GOVERNMENT UNDER THE CONTRACT.

WITH REFERENCE TO THIS MATTER, THE CLAIMANT LETTER OF AUGUST 8, 1931, TO THIS OFFICE STATED:

ON YOUR INVITATION W-31-3891 COVERED BY YOUR ORDER NUMBER 31-3618 THE MILL WHOM WE REPRESENT IN THIS TERRITORY INADVERTENTLY QUOTED AN INCORRECT PRICE AND WE IN TURN MADE OUR QUOTATION ON THE BASIS OF THEIR PROPOSITION PLUS OUR REGULAR COMMISSION.

WE ORIGINALLY QUOTED THIS MATERIAL ON A UNIT PRICE OF 15 CENTS PER FOOT FOR 200 FEET AND WAS SUBSEQUENTLY INCREASED BY WRIGHT FIELD TO 220 FEET ON WHICH OUR QUOTATION WAS $33.00. ENCLOSED IS OUR INVOICE FOR $173.45 WHICH WE TRUST YOU WILL ALLOW. WE RECEIVE A COMMISSION OF 10 PERCENT AND WE HAVE ABSORBED THE FREIGHT CHARGE FROM THE MILL AND ALSO THE DELIVERY CHARGE FROM DAYTON TO WRIGHT FIELD.

AGAIN, IN LETTER TO THIS OFFICE DATED MAY 7, 1932, RELATING TO ITS CLAIM, THE CLAIMANT STATED:

WE ARE RETURNING HEREWITH YOUR CHECK NO. 13425 IN THE AMOUNT OF $30.98 TENDERED IN SETTLEMENT OF YOUR PURCHASE ORDER NO. W-31-3891, DATED JUNE 22, 1931, AND KINDLY ASK THAT YOU AGAIN REVIEW THIS MATTER AS OUTLINED BELOW.

ON YOUR INVITATION NO. W-31-3891, DATED JUNE 12TH, WE QUOTED A PRICE OF 15 CENTS PER FOOT AND WE ACTUALLY SHIPPED 220 FEET 11 INCHES, WHICH IF FIGURED AT THE PRICE WE INADVERTENTLY QUOTED OF 15 CENTS PER FOOT, AMOUNTED TO $33.14, WHICH WE BELIEVE DUE US IF IT IS NECESSARY TO MAKE SETTLEMENT ON THIS BASIS.

IN VIEW OF THE FACT THAT WE DISCOVERED OUR ERROR IMMEDIATELY AFTER RECEIVING THIS ORDER, WE BELIEVE IT HONEST AND FAIR THAT WE ASK YOU TO PAY OUR COST PRICE OF $173.45, WHICH WAS THE PREVAILING MARKET PRICE COVERING THIS MATERIAL AT THE TIME THE CONTRACT WAS MADE.

THE ESTABLISHED RULE IS THAT THE PARTIES TO A CONTRACT ARE BOUND TO PERFORM IT ACCORDING TO ITS TERMS WHEN THEY ARE SUI JURIS, WHERE THE CONTRACT VIOLATES NO RULE OF LAW OR PUBLIC POLICY, AND WHERE NO FRAUD OF IMPOSITION HAS BEEN PRACTICED, NOTWITHSTANDING THE CONTRACT MAY OPERATE HARSHLY OR UNJUSTLY ON ONE OF THE PARTIES. PERFORMANCE IS NOT EXCUSED BY UNFORESEEN DIFFICULTIES, UNEXPECTED EXPENSES, ETC., UNLESS THE CONTRACT SO PROVIDES. 13 CORPUS JURIS 627-635.

IT IS A WELL RECOGNIZED RULE OF LAW THAT WHERE A CONTRACT CONTAINS AN EXPRESS STIPULATION AS TO THE AMOUNT OF COMPENSATION, SUCH STIPULATION IS CONCLUSIVE ON THE PARTIES AND MEASURES THE AMOUNT OF RECOVERY FOR PERFORMANCE. 13 CORPUS JURIS 584; BRAWLEY V. UNITED STATES, 96 U.S. 168; AND SIMPSON V. UNITED STATES, 172 U.S. 379.

THE CONTRACTOR CONTENDS THAT AS ITS ACCEPTED BID OF $0.15 PER FOOT FOR REQUIRED STEEL BARS WAS BASED ON THE PRICE QUOTATION IT HAD OBTAINED FROM THE FITZSIMONS CO., WHICH WAS SUBSEQUENTLY CANCELED BY SAID COMPANY BECAUSE OF A MISTAKE IN SAID QUOTATION, IT IS ENTITLED TO BE PAID FOR THE STEEL DELIVERED THE INCREASED PRICE IT WAS COMPELLED TO PAY THE CYCLOPS STEEL CO. THEREFOR WHICH WITH A 10 PERCENT PROFIT AMOUNTED TO $173.45.

WHILE RELIEF FROM MISTAKES MAY BE HAD IN SOME CASES, THERE APPEARS NO LAWFUL BASIS FOR RELIEF IN THIS CASE. IT IS ONLY UPON SUBMISSION OF THE MOST CONVINCING EVIDENCE OF THE INTENTION OF THE PARTIES THAT THE ACCOUNTING OFFICERS CAN ALLOW PAYMENT CONTRARY TO THE PLAIN TERMS OF A WRITTEN CONTRACT. OFFICERS OF THE GOVERNMENT ARE NOT AUTHORIZED TO MODIFY THE TERMS OF A CONTACT WHICH HAS BEEN ENTERED INTO, IF SUCH MODIFICATION WILL BE PREJUDICIAL TO THE UNITED STATES. THE WRITTEN CONTRACT IS PRESUMED IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. THE GENERAL RULE OF LAW IS THAT A PERSON IS BOUND BY AN AGREEMENT TO WHICH HE HAS ASSENTED, WHERE THIS ASSENT IS UNINFLUENCED BY FRAUD, VIOLENCE, UNDUE INFLUENCE, OF THE LIKE, AND HE WILL NOT BE PERMITTED TO SAY THAT HE DID NOT INTEND TO AGREE TO ITS TERMS. 9 "CYC" 288; 13 CORPUS JURIS 369. ORDER TO AUTHORIZE THE CORRECTION OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER ACCEPTANCE, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTED, AND HOW IT OCCURRED. IN THE INSTANT MATTER, THE FACTS OF RECORD CLEARLY SHOW THAT THERE WAS NO MISTAKE IN THE CLAIMANT'S ACCEPTED BID; THAT SUCH BID WAS AS INTENDED, AND THAT THE BASIS OF CLAIMANT'S REQUEST FOR AN ADDITIONAL PAYMENT FOR THE STEEL DELIVERED, IN EXCESS OF THE STIPULATED CONTRACT PRICE, WAS THE REFUSAL OF ITS SUBCONTRACTOR TO SUPPLY THE REQUIRED STEEL AT THE PRICE IT HAD QUOTED TO CLAIMANT. THE BID OF THE CLAIMANT APPEARS TO HAVE BEEN ACCEPTED IN GOOD FAITH WITHOUT NOTICE OF ANY ALLEGED ERROR. IN THIS CONNECTION, SEE 5 COMP. GEN. 605; 6 ID. 504; 10 ID. 182; AND DECISION OF OCTOBER 20, 1930, IN A-33386.

WITH REFERENCE TO THE CONTRACTOR'S CONTENTION THAT THE QUANTITY OF STEEL DELIVERED WAS 220 FEET, 11 INCHES, THE REPORT OF THE ADMINISTRATIVE OFFICER, BASED ON RECEIVING REPORT 32-1880, SHOWS THE ACTUAL QUANTITY OF STEEL BARS DELIVERED TO BE 206 FEET, 6 INCHES. WHILE CLAIMANT HAS DISPUTED THE FACT AS TO THE ACTUAL QUANTITY OF STEEL DELIVERED, AS REPORTED BY THE CONTRACTING OFFICER, THE EVIDENCE DOES NOT SHOW SUCH FACT TO BE ERRONEOUS, AND IT HAS LONG BEEN THE RULE OF THIS OFFICE TO ACCEPT THE REPORT OF THE ADMINISTRATIVE OFFICER ON DISPUTED QUESTIONS OF FACT, IN THE ABSENCE OF EVIDENCE SUFFICIENT TO OVERCOME THE PRESUMPTION OF THE CORRECTNESS THEREOF. 5 COMP. DEC. 273; 18 ID. 649; AND 3 COMP. GEN. 51.

IN VIEW OF THE FACTS AND CIRCUMSTANCES, AND THE TERMS OF THE CONTRACT, AS ABOVE SHOWN, THERE IS NO LEGAL BASIS ON WHICH PAYMENT MAY BE AUTHORIZED TO THE CLAIMANT OF ANY SUM IN EXCESS OF THE AMOUNT STATED IN ITS CONTRACT FOR THE QUANTITY OF STEEL BARS DELIVERED THEREUNDER.

ACCORDINGLY, UPON REVIEW, THE SETTLEMENT OF APRIL 28, 1932, MUST BE, AND IS, SUSTAINED.

THE CHECK OF THE TREASURER OF THE UNITED STATES FOR $30.98, IN FAVOR OF CLAIMANT, AND WHICH ACCOMPANIED THE CLAIMANT'S LETTER OF MAY 7, 1932, REQUESTING REVIEWS OF THIS MATTER, IS RETURNED TO THE CLAIMANT.