A-42454, MAY 24, 1932, 11 COMP. GEN. 445

A-42454: May 24, 1932

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CLAIMING THAT HIS BID WAS BASED ON THE ESTIMATED COST OF MATERIALS F.O.B. 1932: I HAVE YOUR LETTER OF MAY 14. AS FOLLOWS: YOUR ATTENTION IS INVITED TO THE INCLOSED 15 PROPOSALS WHICH WERE RECEIVED AND OPENED ON MAY 2. THE LOW BID WAS SUBMITTED BY PROSSER HOWELLS. AS THE FINANCIAL STANDING OF THE LOW BIDDER WAS NOT KNOWN. HE WAS WIRED. AS IS CUSTOMARY. THE USUAL REQUEST FOR ATTESTED ESTIMATE SHEETS SHOWING ERROR WAS MADE. HE FOUND HE WAS IN ERROR. FUNDS ARE AVAILABLE FOR AWARD TO THE SECOND BIDDER. BOTH THE LOW AND SECOND BIDS ARE GUARANTEED BY BONDS. YOUR DECISION IS REQUESTED AS SOON AS PRACTICAL. ARE TRANSMITTED HEREWITH. IT IS REQUESTED THAT THESE PAPERS BE RETURNED WITH YOUR DECISION.

A-42454, MAY 24, 1932, 11 COMP. GEN. 445

CONTRACTS - MISTAKE IN BID WHERE THE LOW BIDDER FOR THE CONSTRUCTION OF A POST-OFFICE BUILDING AT HAGERSTOWN, IND., SUBSEQUENT TO THE TIME FIXED FOR THE OPENING OF THE BIDS, ALLEGED A MISTAKE IN HIS BID AND REQUESTED ITS WITHDRAWAL, CLAIMING THAT HIS BID WAS BASED ON THE ESTIMATED COST OF MATERIALS F.O.B. HAGERSTOWN INSTEAD OF LAID DOWN AT THE BUILDING SITE, THUS OMITTING ALL DELIVERY CHARGES, ALSO THAT HE HAD MADE A DEDUCTION OF 8 PERCENT FROM HIS ESTIMATE ON THE ASSUMPTION THAT LABOR COULD BE OBTAINED AT PRICES LOWER THAN THOSE USED IN COMPUTING HIS ESTIMATE, SUCH EXPLANATION OF MISTAKE MAY NOT BE ACCEPTED TO SHOW A BONA FIDE MISTAKE IN THE BID SO AS TO AUTHORIZE ITS WITHDRAWAL OR CORRECTION.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, MAY 24, 1932:

I HAVE YOUR LETTER OF MAY 14, 1932, AS FOLLOWS:

YOUR ATTENTION IS INVITED TO THE INCLOSED 15 PROPOSALS WHICH WERE RECEIVED AND OPENED ON MAY 2, 1932, FOR THE CONSTRUCTION OF A POST OFFICE BUILDING AT HAGERSTOWN, INDIANA. THESE BIDS RANGE IN AMOUNTS FROM $49,500 TO $69,380.

THE LOW BID WAS SUBMITTED BY PROSSER HOWELLS, OF GARY, INDIANA, IN AMOUNT $49,500, AND THE SECOND BID BY CHARLES H. BARNES, OF LOGANSPORT, INDIANA. AS THE FINANCIAL STANDING OF THE LOW BIDDER WAS NOT KNOWN, HE WAS WIRED, AS IS CUSTOMARY, FOR A FINANCIAL STATEMENT, WHICH HE FURNISHED ON MAY 4, 1932, BUT ON THE SAME DATE HE WIRED A REQUEST TO BE RELEASED FROM BID AND CONTRACT, IF POSSIBLE, AS HE FOUND HE HAD MADE AN ERROR IN HIS ESTIMATE. THE USUAL REQUEST FOR ATTESTED ESTIMATE SHEETS SHOWING ERROR WAS MADE, AND ON MAY 6, 1932, HE SUBMITTED THE SAME WITH A STATEMENT THAT HE AHD FIGURED ALL ITEMS OF MATERIAL F.O.B. HAGERSTOWN, IN LIEU OF JOB, AND THINKING THE LABOR WOULD BE LESS HE DEDUCTED 8 PERCENT FROM HIS ESTIMATE, OR $4,294. HE FOUND HE WAS IN ERROR, AND ASKED TO BE RELEASED.

FUNDS ARE AVAILABLE FOR AWARD TO THE SECOND BIDDER, AND BOTH THE LOW AND SECOND BIDS ARE GUARANTEED BY BONDS, NOT CHECKS.

YOUR DECISION IS REQUESTED AS SOON AS PRACTICAL, SO THAT THE AWARD MAY NOT BE UNDULY DELAYED AND ACTION TAKEN BEFORE THE EXPIRATION OF THE 60-DAY LIMIT.

A SYNOPSIS OF THE BIDS, THE LOW BIDDER'S TELEGRAM OF MAY 4, OFFICE WIRE OF MAY 5, AND BIDDER'S LETTER OF MAY 6, 1932, TRANSMITTING ATTESTED ESTIMATE SHEETS, TOGETHER WITH THE BIDS, ARE TRANSMITTED HEREWITH, AND IT IS REQUESTED THAT THESE PAPERS BE RETURNED WITH YOUR DECISION.

IT THUS APPEARS THAT THE LOW BID WAS SUBMITTED BY PROSSER HOWELLS IN THE SUM OF $49,500, AND THE SECOND LOW BID BY CHARLES H. BARNES IN THE SUM OF $52,950, OR A DIFFERENCE OF $3,450 BETWEEN THE TWO BIDS. THE THIRD LOW BID WAS SUBMITTED BY CARL WESTBERG AND CO. (INC.), IN THE SUM OF $54,997 OR $2,047 MORE THAN THE SAID SECOND LOW BID.

THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS IN PARAGRAPH 14 THEREOF, WHICH ALL BIDDERS WERE URGED TO READ BEFORE SUBMITTING THEIR BIDS, NOTIFIED ALL BIDDERS CONCERNED THAT NEGLIGENCE ON THE PART OF ANY BIDDER IN PREPARING HIS BID CONFERRED NO RIGHT FOR THE WITHDRAWAL AFTER IT HAD BEEN OPENED, AND ALL BIDDERS WERE REQUIRED TO FURNISH A BID BOND CONDITIONED ON NOT WITHDRAWING THEIR BID WITHIN A STATED PERIOD AND THE EXECUTION OF A CONTRACT WITH SURETY IN EVENT THEIR PROPOSAL WAS ACCEPTED. THE SAID LOW BIDDER FURNISHED THE BOND IN THE SUM OF $1,200 WITH THE NATIONAL SURETY CO. AS SURETY THEREON. BIDDERS WERE ADVISED, ALSO, IN PARAGRAPH 19 OF THE SAID INSTRUCTIONS THAT:

19. ERRORS IN BID.--- BIDDERS OR THEIR AUTHORIZED AGENTS ARE EXPECTED TO EXAMINE THE MAPS, DRAWINGS, SPECIFICATIONS, CIRCULARS, SCHEDULE, AND ALL OTHER INSTRUCTIONS PERTAINING TO THE WORK, WHICH WILL BE OPEN TO THEIR INSPECTION. FAILURE TO DO SO WILL BE AT THE BIDDER'S OWN RISK, AND HE CANNOT SECURE RELIEF ON THE PLEA OF ERROR IN THE BID. IN CASE OF ERROR IN THE EXTENSION OF PRICES THE UNIT PRICE WILL GOVERN.

THE BIDDER IN THIS CASE, NOT HAVING REQUESTED WITHDRAWAL OF ITS BID PRIOR TO THE TIME FIXED FOR OPENING, THE QUESTION FOR CONSIDERATION IS WHETHER THERE HAS BEEN SHOWN SUCH A BONA FIDE MISTAKE IN THE BID AS WILL AUTHORIZE PERMITTING WITHDRAWAL OR CORRECTION.

THE NUMEROUS DECISIONS OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT IN ORDER TO AUTHORIZE THE CORRECTION OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, AND HOW IT OCCURRED. IN OTHER WORDS, THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS, IN FACT, A BONA FIDE MISTAKE IN THE BID, AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR IS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR OF AVOIDING THE CONSEQUENCES OF AN ILL-ADVISED BID. 9 COMP. GEN. 339.

IN THE CASE HERE PRESENTED, THERE WAS NO MISTAKE. THE BID WAS AS INTENDED. THE ALLEGED MISTAKE WAS THE SAID BIDDER SUBMITTED ITS BID ON THE ESTIMATED COST F.O.B. HAGERSTOWN INSTEAD OF LAID DOWN AT THE BUILDING SITE IN HAGERSTOWN--- NOT ALLOWING ANY AMOUNT FOR DELIVERY CHARGES--- AND THAT DEDUCTION WAS MADE FROM THE TOTAL AMOUNT THUS ESTIMATED ON THE ASSUMPTION THAT MATERIAL AND LABOR COULD BE OBTAINED AT LOWER PRICES THAN THOSE USED IN COMPUTING THE ESTIMATE. NEITHER OF THESE ERRORS IN JUDGMENT ON THE PART OF THE CONTRACTOR IN SUBMITTING ITS BID CONSTITUTES A MISTAKE SUCH AS WOULD AUTHORIZE OR JUSTIFY RELIEVING THE CONTRACTOR FROM THE OBLIGATION UNDER ITS BID. IN OTHER WORDS, THE GENERAL STATEMENT THAT THERE WAS AN ERROR IN THAT THE MATERIAL HAD BEEN FIGURED F.O.B. HAGERSTOWN AND NOT F.O.B. THE JOB, AND THAT LABOR AND MATERIAL CAN NOT BE OBTAINED AT THE PRICES CONTEMPLATED WHEN THE 8 PERCENT WAS DEDUCTED FROM THE TOTAL OF THE ESTIMATES AS ORIGINALLY COMPILED, IS NOT THE SUBMISSION OF SUCH CONCLUSIVE PROOF AS TO LEAVE NO ROOM FOR DOUBT THAT A MISTAKE OCCURRED, IN WHAT IT CONSISTS, AND HOW IT WAS MADE.

THE REQUEST OF THE BIDDER TO BE RELIEVED OF ITS BID IN THIS CASE IS NOTHING MORE NOR LESS THAN AN ATTEMPT TO AVOID THE CONSEQUENCE OF AN ILL- ADVISED BID.

AS WAS STATED IN 8 COMP. GEN. 397, THE PURCHASING OFFICERS OF THE GOVERNMENT HAVE OTHER BUSINESS THAN TO ACT AS GUARDIANS FOR THOSE INDULGING IN POOR BUSINESS METHODS; AND AS THE BID WAS NOT WITHDRAWN PRIOR TO THE OPENING AND, IN FACT, THERE WAS NO BONA FIDE MISTAKE, THE BID SHOULD BE ACCEPTED. IF THE CONTRACTOR FAILS AND REFUSES TO PERFORM THE WORK FOR THE ACCEPTED BID PRICE OF $49,500, NOTICE SHOULD BE GIVEN TO THE SAID BIDDER (PROSSER HOWELLS) AND THE WORK SHOULD BE PERFORMED AS THE INTERESTS OF THE UNITED STATES MAY REQUIRE, DEMAND TO BE MADE ACCORDINGLY ON THE SAID PROSSER HOWELLS FOR PAYMENT OF THE AMOUNT OF THE GOVERNMENT'S DAMAGE AS PROVIDED FOR IN THE CONTRACT. THE NOTICE TO THE BIDDER SHOULD INFORM HIM TO THIS EFFECT. IF THE SAID PROSSER HOWELLS SHOULD REFUSE TO PAY THE AMOUNT OF THE DAMAGES, ALL THE PAPERS, INCLUDING THE BOND, SHOULD BE TRANSMITTED TO THIS OFFICE IN ORDER THAT PROPER ACTION MAY BE TAKEN TO RECOVER FROM THE LOW BIDDER AND ITS SURETY THE LOSS SUSTAINED BY THE GOVERNMENT BECAUSE OF ITS FAILURE TO COMPLY WITH THE TERMS OF ITS ACCEPTED BID AND THE CONDITION OF ITS BID BOND.