A-80893, OCTOBER 17, 1936, 16 COMP. GEN. 392

A-80893: Oct 17, 1936

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THERE IS NO AUTHORITY FOR THE OPEN-MARKET PURCHASE OF THE SUPPLIES INVOLVED AGAINST THE BIDDER'S ACCOUNT. READVERTISEMENT SHOULD BE HAD IF THE BIDS RECEIVED UNDER THE FIRST ADVERTISEMENT ARE NO LONGER AVAILABLE FOR ACCEPTANCE. OR IF MARKET CONDITIONS ARE NOW SUCH THAT READVERTISING MAY BRING LOWER BIDS. AS FOLLOWS: UNDER DATE OF JULY 1 AN ADVERTISEMENT WAS ISSUED FOR 96. BIDS FOR WHICH WERE OPENED AT CHICAGO JULY 20. WAS NOT SHOWN ON THE ABSTRACT: NOTE. - THIS BID IS FOR ANY PART OF THE QUANTITIES STATED IN THE PROPOSAL. ARE SUBJECT TO BIDDER'S ACCEPTANCE. IT IS UNDERSTOOD THAT SUPPLIES CONTRACTED FOR. WILL BE INSPECTED AND ACCEPTED BY THE GOVERNMENT. DELIVERIES ARE TO BE MADE BY THE BIDDER NOT LATER THAN AUG. 15.

A-80893, OCTOBER 17, 1936, 16 COMP. GEN. 392

ADVERTISING - QUALIFIED BIDS - LIABILITY OF CONTRACTOR UNDER ERRONEOUS AWARD WHERE A CONTRACTING OFFICER, UNDER A MISTAKE AS TO THE CONTENTS OF A BID, AWARDS A CONTRACT TO A BIDDER WHOSE BID CONTAINED A QUALIFICATION OF THE PROVISIONS OF THE ADVERTISED SPECIFICATIONS, THERE IS NO AUTHORITY FOR THE OPEN-MARKET PURCHASE OF THE SUPPLIES INVOLVED AGAINST THE BIDDER'S ACCOUNT, THERE HAVING BEEN NO MEETING OF THE MINDS AND CONSEQUENTLY NO CONTRACT, AND READVERTISEMENT SHOULD BE HAD IF THE BIDS RECEIVED UNDER THE FIRST ADVERTISEMENT ARE NO LONGER AVAILABLE FOR ACCEPTANCE, OR IF MARKET CONDITIONS ARE NOW SUCH THAT READVERTISING MAY BRING LOWER BIDS.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE INTERIOR, OCTOBER 17, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 1, 1936, AS FOLLOWS:

UNDER DATE OF JULY 1 AN ADVERTISEMENT WAS ISSUED FOR 96,445 POUNDS OF DRIED WHITE BEANS, ITEM 56-B-8350, FOR THE INDIAN SERVICE FOR THE FISCAL YEAR 1937, BIDS FOR WHICH WERE OPENED AT CHICAGO JULY 20.

THROUGH AN OVERSIGHT AT THE CHICAGO WAREHOUSE IN ABSTRACTING THE BIDS, THE FOLLOWING QUALIFICATION IN THE BID OF AUSTIN, NICHOLS AND COMPANY, OF BROOKLYN, N.Y., WAS NOT SHOWN ON THE ABSTRACT:

NOTE.--- THIS BID IS FOR ANY PART OF THE QUANTITIES STATED IN THE PROPOSAL. ANY INCREASE IN THE QUANTITIES OR ADDITIONAL QUANTITIES DURING THE FISCAL YEAR BEGINNING JULY 1, 1936, ARE SUBJECT TO BIDDER'S ACCEPTANCE. IT IS UNDERSTOOD THAT SUPPLIES CONTRACTED FOR, WILL BE INSPECTED AND ACCEPTED BY THE GOVERNMENT, AT THE SHIPPING POINT PRIOR TO SHIPMENT. DELIVERIES ARE TO BE MADE BY THE BIDDER NOT LATER THAN AUG. 15, 1936. ORDERS MUST BE RECEIVED BY THE BIDDER, IN TIME TO EFFECT DELIVERY BY AUG. 15, 1936. ANY EXTENSION OF THIS TIME WILL BE SUBJECT TO BIDDER'S ACCEPTANCE. IT IS UNDERSTOOD THAT INVOICES WILL BE PAID IN FULL AND SHOULD THERE BE ANY CHANGE IN THE SHIPPING POINT, WHICH MAY CAUSE ADDITIONAL FREIGHT CHARGES, THE BIDDER WILL MAKE THE NECESSARY REFUND TO THE GOVERNMENT.

THE AWARD ON THIS ITEM WAS SPLIT AMONG FOUR BIDDERS. AUSTIN, NICHOLS AND COMPANY, BEING ENTITLED TO 66,845 POUNDS, PRICE AND FREIGHT CONSIDERED, RECEIVED AN AWARD FOR THAT QUANTITY. THIS AWARD WAS MADE BEFORE THE QUALIFICATION IN THIS FIRM'S BID WAS DISCOVERED BY THE PURCHASING OFFICER FOR THIS DEPARTMENT. UPON RECEIPT OF THE PURCHASE ORDER COVERING THE BEANS, THE CONTRACTOR WIRED THE CHICAGO WAREHOUSE THAT THE ORDER WOULD BE ACCEPTED ONLY UPON THE GOVERNMENT'S ACCEPTANCE OF THE TERMS OUTLINED IN ITS QUALIFICATION.

IT WILL BE NOTED THAT THE AWARD WAS MADE ON JULY 22, OR 24 DAYS PRIOR TO AUGUST 15, THE DATE SPECIFIED BY AUSTIN, NICHOLS AND COMPANY FOR DELIVERY. THE PURCHASE ORDER WAS MAILED FROM THE CHICAGO WAREHOUSE ON AUGUST 8 AND WAS RECEIVED BY THE CONTRACTOR ON AUGUST 10. ASSUMING THE CONTRACTOR HAD AN OPTION ON THE COMMODITY, THE 18 DAYS WHICH ELAPSED FROM JULY 22, THE DATE OF AWARD, TO AUGUST 10, THE DATE THE CONTRACTOR RECEIVED THE PURCHASE ORDER, SHOULD HAVE BEEN AMPLE TIME IN WHICH TO PROCURE AND INSPECT THE BEANS. THE FIVE DAYS REMAINING BETWEEN AUGUST 10 AND AUGUST 15 WOULD, OF COURSE, HAVE BEEN MORE THAN ENOUGH TIME IN WHICH TO LOAD THEM FOR SHIPMENT. OBVIOUSLY, THEREFORE, THE CONTRACTOR EITHER DID NOT HAVE AN OPTION ON THE BEANS OR FAILED TO ACT PROMPTLY UPON RECEIPT OF THE NOTIFICATION OF AWARD.

IN VIEW OF THE CONTRACTOR'S INSISTENCE IN ITS TELEGRAM OF AUGUST 11 THAT THE GOVERNMENT AGREE TO AN EXTENSION OF TIME FOR DELIVERY, A CHANGE IN DELIVERY POINT, AND THE RIGHT TO REFUND TO THE GOVERNMENT THE AMOUNT OF ANY INCREASED FREIGHT COST AS A RESULT THEREOF IN LIEU OF THE USUAL PROCEDURE OF WITHHOLDING PART OF THE PAYMENT FOR THESE SUPPLIES, THE CASE IS BEING REFERRED TO YOU FOR DECISION.

YOU ARE REQUESTED TO ADVISE WHETHER IN THE CIRCUMSTANCES THE CONTRACTOR'S TERMS SHOULD BE ACCEPTED; IF NOT, WHETHER THE BEANS SHOULD BE PURCHASED IN THE OPEN MARKET AGAINST THE CONTRACTOR'S ACCOUNT, OR WHETHER THE CONTRACT SHOULD BE CANCELED AND A READVERTISEMENT ISSUED FOR THE QUANTITY INVOLVED. FOR YOUR USE IN CONSIDERING THIS CASE, THERE ARE ENCLOSED THE ORIGINAL BID OF AUSTIN, NICHOLS AND COMPANY, AN ABSTRACT OF ALL THE BIDS RECEIVED, AND OTHER PERTINENT PAPERS. IT WILL BE APPRECIATED IF YOU WILL DECIDE THIS CASE PROMPTLY AND RETURN ALL PAPERS SUBMITTED WITH YOUR DECISION.

THE ADVERTISED SPECIFICATIONS NOTIFIED PROSPECTIVE BIDDERS THAT---

1. TIME OF DELIVERY.--- CONTRACTORS ARE EXPECTED TO BEGIN DELIVERING THE ARTICLES NAMED IN THEIR CONTRACTS AS SOON AS PRACTICABLE AFTER THE RECEIPT OF THE ORDER FOR THE GOODS, AND MUST COMPLETE DELIVERY WITHIN FIFTY (50) DAYS FROM THE DATE OF THE RECEIPT OF SAID ORDER. ADDITIONAL ORDERS MUST BE DELIVERED WITHIN THIRTY (30) DAYS FROM THE DATE OF THE RECEIPT OF THE ORDER THEREFOR.

2. BIDDERS MAY QUOTE ON QUANTITIES LESS THAN ADVERTISED FOR BUT MAY NOT STIPULATE ANY PARTICULAR PERIOD OF YEAR WITHIN WHICH DELIVERIES ARE TO BE RESTRICTED. THE GOVERNMENT RESERVES THE RIGHT TO PLACE ORDERS AS STIPULATED IN ADVERTISEMENT.

THESE PROVISIONS OF THE ADVERTISED SPECIFICATIONS WERE NOT SPECIFICALLY CANCELED BY AUSTIN, NICHOLS AND COMPANY, BUT THERE WERE INCLUDED IN AND MADE A PART OF ITS BID THE PROVISIONS QUOTED IN THE SECOND PARAGRAPH OF YOUR LETTER, SUCH PROVISIONS BEING SUBSTANTIALLY DIFFERENT FROM AND IN DIRECT CONFLICT WITH CERTAIN PROVISIONS OF THE ADVERTISED SPECIFICATIONS.

IN THE AWARDING OF GOVERNMENT CONTRACTS THERE IS A WELL ESTABLISHED PRINCIPLE THAT THE CONTRACT OFFERED THE SUCCESSFUL BIDDER MUST BE THE EXACT CONTRACT WHICH WAS SUBMITTED TO COMPETITION. 8 COMP. GEN. 649, A- 56760, AUGUST 15, 1934. SEE, ALSO, PASCOE V. BARLUM, 65 ALR 833, AND ANNOTATIONS FOLLOWING SAID CASE. THE BID OF AUSTIN, NICHOLS AND COMPANY WAS NOT IN SUBSTANTIAL COMPLIANCE WITH THE ADVERTISED SPECIFICATIONS AND FOR THAT REASON SHOULD HAVE BEEN REJECTED OR DISREGARDED BY THE CONTRACTING OFFICER.

IT IS STATED IN YOUR LETTER THAT THE "AWARD WAS MADE BEFORE THE QUALIFICATION IN THIS FIRM'S BID WAS DISCOVERED BY THE PURCHASING OFFICER * * *.' IN OTHER WORDS, IT APPEARS THE PURCHASING OFFICER SENT THE NOTICE OF ACCEPTANCE UNDER THE ERRONEOUS ASSUMPTION THAT THE BID WAS IN COMPLIANCE WITH THE ADVERTISED SPECIFICATIONS. THIS BIDDER DID NOT INTEND TO AND DID NOT SUBMIT ITS BID IN ACCORDANCE WITH THE ADVERTISED SPECIFICATIONS AND THE CONTRACTING OFFICER DID NOT INTEND TO AND LACKED THE AUTHORITY TO ACCEPT A BID NOT IN ACCORDANCE WITH THE ADVERTISED SPECIFICATIONS.

IT IS ELEMENTARY THAT A CONTRACT CAN RESULT ONLY FROM A MUTUAL ASSENT, A CONSCIOUS MEETING OF THE MINDS, OF THE CONTRACTING PARTIES IN A COMMON INTENTION. THERE BEING NO SUCH MEETING OF THE MINDS IN THE INSTANT CASE, IT IS CLEAR THAT NO CONTRACT RESULTED FROM THE NEGOTIATIONS. HENCE, OPEN- MARKET PURCHASE AGAINST THE BIDDER'S ACCOUNT IS NOT AUTHORIZED AND THE NEEDS OF THE GOVERNMENT SHOULD BE READVERTISED, ASSUMING THAT THE BIDS HERETOFORE RECEIVED ARE NO LONGER AVAILABLE FOR ACCEPTANCE, OR MARKET CONDITIONS ARE NOW SUCH THAT READVERTISING MAY BRING LOWER BIDS.