A-58640, DECEMBER 12, 1934, 14 COMP. GEN. 453

A-58640: Dec 12, 1934

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CONTRACTS - MISTAKE IN BIDS - AGENCY - VERIFICATION OF BIDS WHERE BIDS WERE REQUESTED FOR THE FURNISHING OF SUPPLIES TO THE GOVERNMENT AND AT THE TIME OF THE CONSIDERATION OF THE BIDS THERE WAS SUCH A DIFFERENCE IN PRICE AS TO INDICATE A POSSIBLE MISTAKE IN THE LOW BID AND UPON BEING ASKED TO VERIFY ITS BID A REPRESENTATIVE OF THE BIDDER. STATED THAT THE PRICES QUOTED WERE CORRECT AND THE AWARD WAS THEN MADE ON BASIS OF THE BID AS SUBMITTED. A GOVERNMENT BIDDER WILL NOT. BE PERMITTED TO DENY THAT ITS SALESMAN HAD AUTHORITY TO VERIFY THE BID IF IT APPEARS THAT HE WAS AN EMPLOYEE OF THE BIDDER IN THE CAPACITY OF SALESMAN AND WAS PRESENT AT THE OPENING OF THE BIDS IN SUCH A CAPACITY. TWO BIDS WERE RECEIVED IN RESPONSE THERETO.

A-58640, DECEMBER 12, 1934, 14 COMP. GEN. 453

CONTRACTS - MISTAKE IN BIDS - AGENCY - VERIFICATION OF BIDS WHERE BIDS WERE REQUESTED FOR THE FURNISHING OF SUPPLIES TO THE GOVERNMENT AND AT THE TIME OF THE CONSIDERATION OF THE BIDS THERE WAS SUCH A DIFFERENCE IN PRICE AS TO INDICATE A POSSIBLE MISTAKE IN THE LOW BID AND UPON BEING ASKED TO VERIFY ITS BID A REPRESENTATIVE OF THE BIDDER, PRESENT AT THE OPENING, STATED THAT THE PRICES QUOTED WERE CORRECT AND THE AWARD WAS THEN MADE ON BASIS OF THE BID AS SUBMITTED, THE BIDDER MAY NOT THEREAFTER BE ALLOWED TO WITHDRAW ITS BID ON THE GROUND OF MISTAKE MADE BY ITS EMPLOYEE. PURSUANT TO THE GENERAL RULE APPLICABLE TO THE RELATIONSHIP BETWEEN A PRINCIPAL AND HIS AGENT, A GOVERNMENT BIDDER WILL NOT, AND CANNOT, BE PERMITTED TO DENY THAT ITS SALESMAN HAD AUTHORITY TO VERIFY THE BID IF IT APPEARS THAT HE WAS AN EMPLOYEE OF THE BIDDER IN THE CAPACITY OF SALESMAN AND WAS PRESENT AT THE OPENING OF THE BIDS IN SUCH A CAPACITY.

DECISION OF COMPTROLLER GENERAL MCCARL, DECEMBER 12, 1934:

THE HAJOCA CORPORATION REQUESTED REVIEW OF SETTLEMENT NO. 0335892 (1) DATED FEBRUARY 15, 1934, DISALLOWING ITS CLAIM FOR THE BALANCE ALLEGED TO BE DUE ON ACCOUNT OF MISTAKE IN BID FOR THE FURNISHING OF 300 ROLLS OF ASBESTOS ROOFING TO THE WAR DEPARTMENT, EDGEWOOD ARSENAL, MD., UNDER CONTRACT NO. W-285-CWA-1156, ACCEPTED MAY 9, 1933.

IT APPEARS THAT THE WAR DEPARTMENT, CHEMICAL WARFARE SERVICE, EDGEWOOD ARSENAL, MD., ADVERTISED FOR BIDS TO BE OPENED MAY 9, 1933, FOR THE FURNISHING, AMONG OTHER ITEMS, 300 ROLLS OF ROOFING, 3-PLY, RED SLATE SURFACED, ASBESTOS, 108 SQUARE FEET PER ROLL, TO BE DELIVERED TO EDGEWOOD ARSENAL, MD. TWO BIDS WERE RECEIVED IN RESPONSE THERETO. THE JOHNS- MANVILLE SALES CORPORATION SUBMITTED A BID OF $3.08 PER ROLL. THE HAJOCA CORPORATION SUBMITTED A BID OF $1.24 PER ROLL.

IT APPEARS THAT UPON THE OPENING AND CONSIDERATION OF THE BIDS, BUT BEFORE AWARD, THE CONTRACTING OFFICER, IN VIEW OF THE GREAT DIFFERENCE BETWEEN THE TWO BIDS, THOUGHT THERE MIGHT BE A MISTAKE IN THE LOW PRICE QUOTED BY THE HAJOCA CORPORATION AND ASKED A REPRESENTATIVE OF THE BIDDER WHO WAS PRESENT TO VERIFY THE BID. THIS REPRESENTATIVE STATED DEFINITELY THAT THE PRICES QUOTED WERE CORRECT AND THAT HE WAS FULLY AWARE OF THE MATERIAL REQUIRED TO BE FURNISHED. THEREFORE, THE SAID LOW BID WAS ACCEPTED AND PURCHASE ORDER DATED MAY 9, 1933, WAS SENT TO THE BIDDER.

UPON DELIVERY OF THE ROOFING IT WAS DISCOVERED THAT IT WAS ASPHALT INSTEAD OF MINERAL SURFACED ASBESTOS AS CALLED FOR IN THE ADVERTISED SPECIFICATIONS. THE MATTER WAS BROUGHT TO THE ATTENTION OF THE BIDDER WHEREUPON THE BIDDER STATED THAT A MISTAKE HAD BEEN MADE, THAT IT DID NOT INTEND TO BID UPON ASBESTOS ROOFING AND THAT THE PRICE OF $1.24 PER ROLL WAS FOR ASPHALT ROOFING. HOWEVER, THE BIDDER THEN DELIVERED ASBESTOS ROOFING, PRESENTING A DULY CERTIFIED INVOICE IN THE AMOUNT OF $372 WHICH AMOUNT, LESS THE 2 PERCENT OFFERED DISCOUNT FOR PROMPT PAYMENT, HAS BEEN PAID. THEREAFTER CLAIM WAS PRESENTED FOR $481.44 ALLEGED TO BE THE DIFFERENCE BETWEEN THE COST OF FURNISHING THE ASBESTOS ROOFING AND THE AMOUNT PAID.

PARAGRAPHS 14 AND 19 OF THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS PROVIDE:

14. WITHDRAWAL OF BIDS.--- BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME FIXED FOR OPENING. NEGLIGENCE ON THE PART OF THE BIDDER IN PREPARING THE BID CONFERS NO RIGHT FOR THE WITHDRAWAL OF THE BID AFTER IT HAS BEEN OPENED.

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.

IN REQUESTING ALLOWANCE OF ITS CLAIM, CLAIMANT HAS SUBMITTED EVIDENCE TENDING TO SHOW THAT THE ACTUAL COST TO IT OF THE MINERAL SURFACED ASBESTOS ROOFING WAS $2.75 PER ROLL. THE CLAIMANT URGES, ALSO, THAT ITS SALESMAN WHO WAS PRESENT AT THE OPENING OF THE BIDS HAD NO AUTHORITY TO MAKE A DEFINITE AND POSITIVE STATEMENT AS TO ITS BID. WHILE AS PREVIOUSLY NOTED, THERE WAS SOME DOUBT ON THE PART OF THE CONTRACTING OFFICER, AT THE TIME OF THE OPENING OF THE BIDS, AS TO THE CORRECTNESS OF THE BID SUBMITTED BY THE HAJOCA CORPORATION AND HE PROPERLY BROUGHT THE MATTER TO THE ATTENTION OF THE REPRESENTATIVE OF THE CLAIMANT COMPANY WHO WAS PRESENT AT THE OPENING OF THE BIDS, WHEN THE SAID REPRESENTATIVE VERIFIED THE BID, THE CONTRACTING OFFICER WAS UNDER NO FURTHER OBLIGATION TO PROTECT THE INTEREST OF THE CONTRACTOR IN THE MATTER. AFTER SUCH VERIFICATION THERE WAS NO OTHER COURSE FOR THE CONTRACTING OFFICER TO FOLLOW THAN TO AWARD THE CONTRACT TO THE LOW BIDDER. SEE 10 COMP. GEN. 388.

WITH REFERENCE TO THE CONTENTION THAT THE SALESMAN HAD NO AUTHORITY TO VERIFY THE BID, IT APPEARS THAT HE WAS AN EMPLOYEE OF THE CLAIMANT COMPANY IN THE CAPACITY OF A SALESMAN AND WAS PRESENT AT THE OPENING OF THE BIDS IN SUCH A CAPACITY, AND IT MUST BE PRESUMED THAT HE WAS AUTHORIZED TO REPRESENT THE COMPANY IN THE MATTER. THE GENERAL RULE IS THAT WHENEVER A PERSON HAS HELD OUT ANOTHER AS HIS AGENT AUTHORIZED TO ACT FOR HIM IN A GIVEN CAPACITY; OR HAS KNOWINGLY AND WITHOUT DISSENT PERMITTED SUCH OTHER TO ACT AS HIS AGENT IN THAT CAPACITY; OR WHERE HIS HABITS AND COURSE OF DEALING HAVE BEEN SUCH AS REASONABLY TO WARRANT THE PRESUMPTION THAT SUCH OTHER WAS HIS AGENT AUTHORIZED TO ACT IN THAT CAPACITY, WHETHER IT BE IN A SINGLE TRANSACTION OR IN A SERIES OF TRANSACTIONS, HIS AUTHORITY TO SUCH OTHER TO SO ACT FOR HIM IN THAT CAPACITY WILL BE CONCLUSIVELY PRESUMED, SO FAR AS IT MAY BE NECESSARY TO PROTECT THE RIGHTS OF THIRD PERSONS WHO HAVE RELIED THEREON IN GOOD FAITH AND IN THE EXERCISE OF REASONABLE PRUDENCE; AND HE WILL NOT BE PERMITTED TO DENY THAT SUCH OTHER WAS HIS AGENT AUTHORIZED TO DO THE ACT HE ASSUMED TO DO, PROVIDED THAT SUCH ACT WAS WITHIN THE REAL OR APPARENT SCOPE OF THE PRESUMED AUTHORITY.

THE PRINCIPAL WILL NOT AND CANNOT BE PERMITTED TO DENY THAT WHICH BY HIS WORDS OR CONDUCT HE HAS ASSERTED IF SUCH DENIAL WOULD PREJUDICE AN INNOCENT THIRD PERSON WHO HAS REASONABLY RELIED UPON SUCH WORDS OR CONDUCT. SEE HUBBARD V. TENBROOK, 124 PA.ST. 291; 16 ATL.REP. 817; 2 L.R.A. 823.

UPON THE FACTS OF RECORD THE SETTLEMENT DISALLOWING THE CLAIM MUST BE AND IS SUSTAINED.