A-8638, MAY 2, 1925, 4 COMP. GEN. 911

A-8638: May 2, 1925

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WAS SUBSEQUENTLY SO APPROVED. 1925: I HAVE YOUR LETTER OF MARCH 18. WHICH WAS ACCEPTED BY THE POSTMASTER SUBJECT TO APPROVAL BY THE POST OFFICE DEPARTMENT AT WASHINGTON. LOUIS GAS AND FUEL CO.'S BID WAS BASED ON MISINFORMATION AS TO THE REQUIREMENTS OF THE MISSOURI LAW AND THAT A REQUEST FOR PERMISSION TO WITHDRAW ITS BID AND TO SUBSTITUTE A NEW BID THEREFOR WAS FILED WITH THE POSTMASTER PRIOR TO THE FINAL ACCEPTANCE OF THE OFFER BY THE DEPARTMENT. THE DEPARTMENT WILL BE JUSTIFIED IN ACCEPTING BILLS COVERING DELIVERY OF GASOLINE AT $0.119 PER GALLON OR WILL THE CONTRACTOR BE COMPELLED TO ACCEPT PAYMENT FOR THE GASOLINE DELIVERED AT $0.099 PER GALLON? EACH OF WHOM WAS NECESSARILY OBLIGED TO KNOW ALL THE CONDITIONS THAT ENTERED INTO THE FIXING OF THE PRICES QUOTED IN THEIR BIDS.

A-8638, MAY 2, 1925, 4 COMP. GEN. 911

MISTAKE IN BIDS - STATE TAX ON GASOLINE - IGNORANCE OF LAW AN OIL COMPANY THAT SUBMITTED THE LOWEST BID IN RESPONSE TO REQUESTS FOR BIDS ON A QUANTITY OF GASOLINE TO BE SUPPLIED DURING A GIVEN PERIOD, AND WHOSE BID PRIOR TO ITS REQUEST FOR PERMISSION TO WITHDRAW HAD BEEN ACCEPTED BY THE POSTMASTER, SUBJECT TO APPROVAL BY THE POST OFFICE DEPARTMENT, AND WAS SUBSEQUENTLY SO APPROVED, MAY NOT BE RELIEVED OF FURNISHING GASOLINE IN ACCORDANCE WITH ITS BID BY REASON OF ALLEGED IGNORANCE OF A STATE TAX ON GASOLINE IMPOSED BY A STATE LAW ENACTED PRIOR TO THE REQUEST FOR BIDS ALTHOUGH NOT EFFECTIVE UNTIL THEREAFTER.

COMPTROLLER GENERAL MCCARL TO THE POSTMASTER GENERAL, MAY 2, 1925:

I HAVE YOUR LETTER OF MARCH 18, 1925, REQUESTING DECISION AS TO THE PROPER RATE TO BE PAID PER GALLON TO THE ST. LOUIS GAS AND FUEL CO. FOR GASOLINE FURNISHED THE POSTMASTER AT ST. LOUIS, MO., DURING THE PERIOD JANUARY 1 TO MARCH 31, 1925, UNDER CIRCUMSTANCES THAT MAY BE EPITOMIZED AS FOLLOWS:

IN RESPONSE TO A REQUEST FOR BIDS DATED NOVEMBER 28, 1924, FOR FURNISHING APPROXIMATELY 60,000 GALLONS OF GASOLINE TO THE POSTMASTER AT ST. LOUIS, MO., DURING THE PERIOD JANUARY 1 TO MARCH 31, 1925, THE ST. LOUIS GAS AND FUEL CO. SUBMITTED THE LOWEST BID OF $0.099 PER GALLON, WHICH WAS ACCEPTED BY THE POSTMASTER SUBJECT TO APPROVAL BY THE POST OFFICE DEPARTMENT AT WASHINGTON. IN SUBMITTING A REPORT OF THE BIDS THE POSTMASTER STATED THAT BECAUSE OF MISINFORMATION THE ST. LOUIS GAS AND FUEL CO. FAILED TO TAKE INTO CONSIDERATION THE FACT THAT ON NOVEMBER 4, 1924, AN ACT HAD BEEN ADOPTED BY THE PEOPLE OF MISSOURI WHICH PROVIDED A TAX OF 2 CENTS PER GALLON ON MOTOR-VEHICLE FUEL EFFECTIVE JANUARY 1, 1925.

ON DECEMBER 19, 1924, THE POST OFFICE DEPARTMENT APPROVED THE BID OF THE ST. LOUIS GAS AND FUEL CO. OF $0.099 PER GALLON.

ON DECEMBER 18, 1924, THE POST OFFICE DEPARTMENT ADVISED THE POSTMASTER AT ST. LOUIS TO READVERTISE FOR BIDS WITH THE RESULT THAT THE ST. LOUIS GAS AND FUEL CO. SUBMITTED BIDS OF $0.099 PER GALLON WITHOUT THE 2-CENT STATE TAX AND $0.119 PER GALLON INCLUDING THE TAX. NO ACTION HAS BEEN TAKEN ON THE BIDS REQUESTED ON DECEMBER 18, 1924.

YOU REQUEST TO BE ADVISED WHETHER IN VIEW OF THE FACT THAT THE ST. LOUIS GAS AND FUEL CO.'S BID WAS BASED ON MISINFORMATION AS TO THE REQUIREMENTS OF THE MISSOURI LAW AND THAT A REQUEST FOR PERMISSION TO WITHDRAW ITS BID AND TO SUBSTITUTE A NEW BID THEREFOR WAS FILED WITH THE POSTMASTER PRIOR TO THE FINAL ACCEPTANCE OF THE OFFER BY THE DEPARTMENT, THE DEPARTMENT WILL BE JUSTIFIED IN ACCEPTING BILLS COVERING DELIVERY OF GASOLINE AT $0.119 PER GALLON OR WILL THE CONTRACTOR BE COMPELLED TO ACCEPT PAYMENT FOR THE GASOLINE DELIVERED AT $0.099 PER GALLON?

WHILE RELIEF FROM MISTAKES IN CONTRACTS MAY BE HAD IN SOME CASES, THERE APPEARS NO LAWFUL BASIS FOR RELIEF IN THIS CASE. THE ST. LOUIS GAS AND FUEL CO. SUBMITTED ITS BID TOGETHER WITH SEVEN OTHER BIDDERS, EACH OF WHOM WAS NECESSARILY OBLIGED TO KNOW ALL THE CONDITIONS THAT ENTERED INTO THE FIXING OF THE PRICES QUOTED IN THEIR BIDS. THERE IS NOTHING TO INDICATE THAT THE POSTMASTER KNEW AT THE TIME HE OPENED THE PROPOSAL THAT A MISTAKE HAD BEEN MADE OR THAT THERE WAS SUCH MUTUAL MISTAKE AS WOULD PERMIT INCREASING THE CONTRACT PRICE. IN ANY EVENT THERE WOULD BE FOR CONSIDERATION THE RATE OFFERED BY THE NEXT LOWEST BIDDER AS EVIDENCING THE REASONABLE VALUE OF THE GASOLINE. THE BIDDER MAY HAVE HAD A RIGHT TO WITHDRAW ITS BID BEFORE THE TIME SET FOR OPENING, BUT NO SUCH RIGHT EXISTED AFTER OPENING OR ACCEPTING ITS PROPOSAL.

YOU ARE ADVISED THAT UPON THE FACTS APPEARING THE GASOLINE IN QUESTION MAY BE PAID FOR AT THE RATE OF $0.099 PER GALLON ONLY, AS FIXED BY THE PROPOSAL AND ACCEPTANCE CONSTITUTING THE CONTRACT OF THE PARTIES.