A-83686, FEBRUARY 19, 1937, 16 COMP. GEN. 779

A-83686: Feb 19, 1937

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IS NOT ENTITLED TO MORE THAN THE CONTRACT PRICE. 1937: THERE IS BEFORE THIS OFFICE FOR CONSIDERATION AND SETTLEMENT THE CLAIM OF THE DERBY OIL CO. BIDS WERE REQUESTED BY THE TREASURY DEPARTMENT. * * * ARE GIVEN FOR GENERAL INFORMATION ONLY. * * * A CONTRACTOR WILL BE REQUIRED TO FURNISH SUCH QUANTITIES UNDER THE ITEM OR ITEMS FOR WHICH AWARD IS MADE THAT MAY BE ORDERED DURING THE CONTRACT PERIOD. IT IS IMPRACTICABLE TO DETERMINE THE QUANTITIES THAT WILL BE REQUIRED UNDER ANY ITEM DURING THE CONTRACT PERIOD. * * * BIDDERS WERE ADVISED IN PARAGRAPH 15 THAT: WHERE BIDS ON TANK CAR REQUIREMENTS IN SCHEDULE NO. 2 ARE CALLED FOR F.O.B. SHIPMENT WILL BE MADE ON GOVERNMENT BILL OF LADING TO BE FURNISHED BY THE ACTIVITY CONCERNED.

A-83686, FEBRUARY 19, 1937, 16 COMP. GEN. 779

CONTRACTS - UNENFORCEABLE FOR LACK OF MUTUALITY - MISTAKE IN BID - PRICE ADJUSTMENT AFTER PERFORMANCE A CONTRACTOR WHO, ABANDONING AN EARLIER PROTEST, VOLUNTARILY DELIVERS GASOLINE UNDER A CONTRACT, UNENFORCEABLE FOR LACK OF CONSIDERATION AND MUTUALITY BUT VALID AND BINDING TO THE EXTENT TO WHICH PERFORMED, IS NOT ENTITLED TO MORE THAN THE CONTRACT PRICE, NOTWITHSTANDING ALLEGATION OF MISTAKE IN BID, THE MISTAKE NOT BEING MUTUAL AND NOT HAVING BEEN ALLEGED UNTIL AFTER ACCEPTANCE IN GOOD FAITH AND PART PERFORMANCE.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOTT, FEBRUARY 19, 1937:

THERE IS BEFORE THIS OFFICE FOR CONSIDERATION AND SETTLEMENT THE CLAIM OF THE DERBY OIL CO. IN THE SUM OF $2,467.80, THE BALANCE ALLEGED TO BE DUE FOR GASOLINE UNDER CONTRACT TPS-10033, DATED DECEMBER 17, 1935.

IT APPEARS THAT UNDER DATE OF OCTOBER 29, 1935, BIDS WERE REQUESTED BY THE TREASURY DEPARTMENT, PROCUREMENT DIVISION, TO BE OPENED NOVEMBER 20, 1935, FOR THE FURNISHING UNDER CLASS 7, GASOLINE, GRADES G-101, V-65, AND V-75, TO MEET CERTAIN REQUIREMENTS SET FORTH IN SCHEDULES NOS. 1 AND 2, COVERING THE PERIOD JANUARY 1 TO MARCH 31, 1936, FOR SHIPMENT IN TANK CARS IN, AMONG OTHER STATES, THE STATE OF KENTUCKY. SCHEDULE NO. 1 PROVIDED FOR QUANTITY, METHOD OF BIDDING, SAMPLING, ETC. PARAGRAPH 2 ADVISED BIDDERS IN PERTINENT PART AS FOLLOWS:

THE ESTIMATED REQUIREMENTS SHOWN IN SCHEDULE NO. 2 FOR TANK CAR SHIPMENTS, * * * ARE GIVEN FOR GENERAL INFORMATION ONLY. * * * A CONTRACTOR WILL BE REQUIRED TO FURNISH SUCH QUANTITIES UNDER THE ITEM OR ITEMS FOR WHICH AWARD IS MADE THAT MAY BE ORDERED DURING THE CONTRACT PERIOD. IT IS IMPRACTICABLE TO DETERMINE THE QUANTITIES THAT WILL BE REQUIRED UNDER ANY ITEM DURING THE CONTRACT PERIOD. * * *

BIDDERS WERE ADVISED IN PARAGRAPH 15 THAT:

WHERE BIDS ON TANK CAR REQUIREMENTS IN SCHEDULE NO. 2 ARE CALLED FOR F.O.B. BIDDER'S BULK PLANT AND ALSO F.O.B. DESTINATION (DELIVERY ON RAILROAD TRACKS OF THE ORDERING ACTIVITY), THE GOVERNMENT RESERVES THE RIGHT TO MAKE AWARD ON EITHER BASIS. FOR ITEMS AWARDED F.O.B. BIDDER'S BULK PLANT, SHIPMENT WILL BE MADE ON GOVERNMENT BILL OF LADING TO BE FURNISHED BY THE ACTIVITY CONCERNED.

THE BID OF THE DERBY OIL CO., BEING THE LOWEST RECEIVED, WAS ACCEPTED UNDER ITEMS 446 AND 447 FOR TANK-CAR DELIVERIES IN THE ESTIMATED QUANTITIES OF 67,000 GALLONS OF GRADE V-65, AND 80,000 GALLONS OF GRADE V- 75 GASOLINE FOR CIVILIAN CONSERVATION CORPS QUARTERMASTER, FORT KNOX, KY., AND QUARTERMASTER, FORT KNOX, KY., RESPECTIVELY, AT $0.05438 PER GALLON, F.O.B. BIDDER'S PLANT, WICHITA, KANS., INCLUSIVE OF COST OF FREIGHT. UNDER ITEM 447, WHICH PROVIDED FOR V-75 GRADE, THE FOLLOWING PURCHASE ORDERS WERE ISSUED:

DATE ACTIVITY NUMBER QUANTITY PRICE AMOUNT

GALLONS JAN. 17, 1936 QUARTERMASTER ------- 1061

30,000 $0.05438 $1,631.40 FEB. 13, 1936 ---- DO ------------- 1205 20,000 .05438 1,087.60 FEB. 17, 1936 ---- DO ----------- - 1222 8,000 .05438 435.04

DO -------- CIVILIAN CONSERVATION

CORPS ------------- 3704 10,000 .05438 543.80 MAR. 9, 1936 QUARTERMASTER ------- 1318 10,000 .05438 543.80 MAR. 27, 1936 ---- DO ------------- 1392 8,000 .05438 435.04 MAR. 21, 1936 ---- DO ------------- 1371 75,000 .05438 4,078.50

161,000

THE CONTRACTOR (DERBY OIL CO.) DELIVERED THE GASOLINE IN ACCORDANCE WITH THE VARIOUS PURCHASE ORDERS, CERTIFIED THE INVOICES AS CORRECT AND JUST AND ACCEPTED PAYMENT THEREFOR WITHOUT PROTEST, WITH THE EXCEPTION OF THE GASOLINE COVERED BY PURCHASE ORDER NO. QM-1371, DATED MARCH 31, 1936, FOR 75,000 GALLONS, WHEREIN IT WAS STIPULATED THAT DELIVERY BE MADE NOT LATER THAN MARCH 30, 1936, WHICH WAS THE EXPIRATION DATE OF THE CONTRACT. THE DELIVERY OF THIS GASOLINE WAS MADE UNDER PROTEST AND THE INVOICES SUBMITTED IN PAYMENT THEREFOR HAD THE FOLLOWING NOTATION THEREON:

THIS ORDER IS BEING SHIPPED UNDER PROTEST AS PER LETTER ADDRESSED TO H. C. MAUL, JR., CHIEF, PURCHASE DIVISION, TREASURY DEPARTMENT, PROCUREMENT DIVISION, WASHINGTON, D.C., DATED 3/28/36, SIGNED BY C. A. KELLER, GENERAL SALES MANAGER, WITH COPIES TO HARRY H. WOODRING, ASSISTANT SECRETARY OF WAR, WASHINGTON, D.C., AND SIMON JACOBSON, CAPTAIN, QUARTERMASTER CORPS, FT. KNOX, KENTUCKY.

THE LETTER OF MARCH 28, 1936, IS TO THE EFFECT THAT A MISTAKE HAD BEEN MADE BY THE DERBY OIL CO. IN ITS BID FOR THE DELIVERY OF THE GRADE V-75 GASOLINE UNDER ITEM NO. 447, IN THAT THE BID PRICE FOR THE GRADE V-65, $0.05438, WHICH HAD BEEN BID ON NUMEROUS OTHER ITEMS OF THIS GRADE WAS INSERTED INSTEAD OF $0.06938, THE CORRECT PRICE FOR GRADE V-75 GASOLINE; HOWEVER, THAT THE COMPANY HAD INTENDED TO ABSORB THIS LOSS OF DELIVERIES OF GASOLINE AMOUNTING TO 88,455 GALLONS, BUT IT OBJECTED TO MAKING FURTHER DELIVERIES AS REQUIRED BY PURCHASE ORDER NO. 1371 OF 75,000 GALLONS AT THE ALLEGED ERRONEOUS PRICE AND THAT, FURTHERMORE, THE QUARTERMASTER AT FORT KNOX HAD NOT CALLED FOR ANY DELIVERIES UNDER ITEM NO. 446 OF GRADE V-65 GASOLINE.

BY TELEGRAM DATED MARCH 28, 1936, THE TREASURY DEPARTMENT, PROCUREMENT DIVISION, BRANCH OF SUPPLY, ADVISED THE SAID CONTRACTOR THE WAR DEPARTMENT HAD STATED THAT AS A RESULT OF EXPERIMENTS ON SPECIAL MOTORIZED EQUIPMENT, GRADE V-75 GASOLINE WAS REQUIRED AND THAT THERE WAS NO AUTHORITY FOR ANY ADVANCE OVER THE CONTRACT PRICE FOR GRADE V-75 GASOLINE. DELIVERY OF THE 75,000 GALLONS WAS MADE AND CLAIM IS NOW MADE ON THE BASIS OF THE ALLEGED CORRECT BID PRICE, OR, FOR A TOTAL OF $2,467.80 IN EXCESS OF THE CONTRACT PRICE.

IN EXPLANATION OF THE ALLEGED ERROR, THE SAID CONTRACTOR STATES IN LETTER OF APRIL 8, 1936, THAT:

ON NOVEMBER 14TH WE MAILED TO THE TREASURY DEPARTMENT, PROCUREMENT DIVISION, WASHINGTON, D.C., OUR BID ON REQUISITION 1296-G-11-20, WHICH WAS OPENED AT 10 A.M. NOVEMBER 20TH, 1935, COVERING GASOLINE TANK CAR FOR REGION NO. 3.

ON ALL ITEMS OF GASOLINE, OUR BIDS WERE AS FOLLOWS: G 101, $0.04563; V 65, $0.05438; V 75, $0.06938; ALL F.O.B. OUR REFINERY WICHITA, HOWEVER, IN WRITING UP THIS CONTRACT AN ERROR WAS MADE IN THIS OFFICE ON ITEM NO. 447 WHICH WAS V 75 GRADE BUT INADVERTENTLY PLACED IN V 65 COLUMN AND PRICED AT $0.05438 INSTEAD OF AT $0.06938. THIS ITEM CALLED FOR 80,000 GALLONS AND WE ACTUALLY SHIPPED ON THE ORDER 164,520 GALLONS. DUE TO THIS ERROR IN PRICE OF 1 1/2 CENT PER GALLON, THE DERBY OIL CO. HAVE ACTUALLY LOST ON GASOLINE ACTUALLY SHIPPED $2,467.80.

I AM ATTACHING HERETO A STATEMENT GIVING THE DATE, INVOICE NUMBER, CAR NUMBER, GRADE, NET GALLONS, PRICE SHOWN ON CONTRACT, THE AMOUNT, THE CORRECT PRICE, AMOUNT, SPOT PRICE DATE OF SHIPMENT AND THE AMOUNT, ON ALL SHIPMENTS GOING TO FORT KNOX ON THIS ITEM, TOGETHER WITH EXHIBITS A, B, C, D, E, AND F, AS LISTED ON THE REPORT. I AM FORWARDING THIS LETTER TO SIMON JACOBSON, CAPTAIN, QUARTERMASTER CORPS, FORT KNOX, KENTUCKY, WHO SIGNED ALL OF THE ORDERS, WITH A COPY TO YOU AT WASHINGTON, REQUESTING THAT CAPTAIN JACOBSON FORWARD MY LETTER ADDRESSED TO YOU WITH ALL EXHIBITS TO THE PROPER PARTIES IN WASHINGTON FOR THEIR RECOMMENDATIONS TO YOU AND YOUR FINAL DECISION. WE ARE ASKING THAT YOU CONSIDER CAREFULLY OUR REQUEST FOR REIMBURSEMENT IN THE AMOUNT OF $2,467.80, WHICH IS THE DIFFERENCE BETWEEN THE PRICE SHOWN ON OUR CONTRACT IN ERROR AND THE PRICE AS IT SHOULD HAVE BEEN, WHICH YOU WILL NOTE FROM STATEMENT ATTACHED IS STILL $1,990.64 UNDER WHAT THE SPOT MARKET WAS ON EACH DATE OF SHIPMENT.

PARAGRAPHS 14 AND 19 OF 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 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 CAN NOT 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 ORDER TO AUTHORIZE REFORMING A CONTRACT BECAUSE OF 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 AT THE TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 504, 526; 15 COMP. GEN. 1049. SEE, ALSO, LEONARD V. HOWARD, 67 OR. 203; 135 PACIFIC 549.

IT WOULD APPEAR THAT IN THIS CASE THERE WAS NO ALLEGATION OF MISTAKE INSOFAR AS CONCERNS THE DELIVERY OF THE 88,455 GALLONS UNTIL AFTER THE BID HAD BEEN ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER WITHOUT ANY NOTICE, ACTUAL OR PRESUMPTIVE, OF THE MISTAKE AND AFTER DELIVERIES HAD BEEN MADE, AFTER THE INVOICES SUBMITTED IN PAYMENT THEREFOR HAD BEEN CERTIFIED AS JUST AND CORRECT, AND AFTER PAYMENT HAD BEEN ACCEPTED OF THE CONTRACT PRICE EXCEPT AS TO THE ITEM NOW INVOLVED.

WITH PARTICULAR REFERENCE TO THE 75,000 GALLONS DELIVERED UNDER PROTEST, IT IS TO BE OBSERVED THAT THE CONTRACT IN QUESTION DID NOT FIX ANY DEFINITE AMOUNT OF GASOLINE TO BE DELIVERED, THERE BEING STATED ONLY AN ESTIMATED QUANTITY AND, AS NOTED, SUPRA, ALL PROSPECTIVE BIDDERS WERE FULLY ADVISED WITH RESPECT THERETO IN THE ADVERTISEMENT FOR BIDS. CONTRACT WHICH DOES NOT REQUIRE THE GOVERNMENT TO TAKE OR LIMIT ITS DEMAND TO ANY ASCERTAINABLE QUANTITY IS UNENFORCEABLE FOR LACK OF CONSIDERATION AND MUTUALITY. SUCH A CONTRACT, HOWEVER, BECOMES VALID AND BINDING TO THE EXTENT TO WHICH IT IS PERFORMED; AND A PARTY WHO, ABANDONING AN EARLIER PROTEST, AS IN THIS CASE, VOLUNTARILY DELIVERS THE SUPPLIES COVERED BY THE CONTRACT IS LIMITED TO THE CONTRACT PRICE AND CANNOT RECOVER MORE FROM THE UNITED STATES. SEE WILLARD, SUTHERLAND AND CO. V. UNITED STATES, 262 U.S. 489.

SINCE THE MISTAKE WAS NOT MUTUAL AND NOT ALLEGED UNTIL AFTER ACCEPTANCE IN GOOD FAITH, AND AFTER MOST OF THE DELIVERIES HAD BEEN MADE WITHOUT NOTICE OF ANY MISTAKE, THERE IS NO BASIS FOR ALLOWING ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE. ACCORDINGLY, THE CLAIM MUST BE AND IS DISALLOWED.