A-89036, NOVEMBER 30, 1937, 17 COMP. GEN. 452

A-89036: Nov 30, 1937

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CONTRACTS - MISTAKES - BIDS - ALLEGATION OF ERROR AFTER AWARD - BIDDER'S CLAIM FOR ADDITIONAL AMOUNT AFTER PERFORMANCE WHERE BIDDER'S CLAIM OF MISTAKE IN BID WAS NOT ASSERTED UNTIL AFTER AWARD AND THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER. THE SPECIFICATIONS WERE CLEAR AND UNAMBIGUOUS. ALTHOUGH IT APPEARS FROM THE FACTS AS NOW PRESENTED THAT A RESCISSION OF THE CONTRACT MIGHT HAVE BEEN AUTHORIZED HAD THE MATTER BEEN PRESENTED TO THE GENERAL ACCOUNTING OFFICE BEFORE PERFORMANCE. THE FACT THAT THE BIDDER MAY HAVE BEEN INDUCED. IT MUST APPEAR THAT THE MISTAKE WAS MUTUAL OR THAT THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE ACCEPTING OFFICER KNEW OF THE MISTAKE AT TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF.

A-89036, NOVEMBER 30, 1937, 17 COMP. GEN. 452

CONTRACTS - MISTAKES - BIDS - ALLEGATION OF ERROR AFTER AWARD - BIDDER'S CLAIM FOR ADDITIONAL AMOUNT AFTER PERFORMANCE WHERE BIDDER'S CLAIM OF MISTAKE IN BID WAS NOT ASSERTED UNTIL AFTER AWARD AND THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER, BEFORE ACCEPTANCE OF THE BID, KNEW THAT A MISTAKE HAD BEEN MADE, AND NOTHING IN THE BID ITSELF TO SUGGEST ERROR, AND THE SPECIFICATIONS WERE CLEAR AND UNAMBIGUOUS, NEITHER THE CONTRACTING OFFICER'S FAILURE--- AFTER COMPARISON OF ALL BIDS RECEIVED--- TO NOTICE PROBABILITY OF ERROR AND ASK FOR VERIFICATION BEFORE MAKING AN AWARD NOR HIS AGREEMENT AFTER AWARD WITH RESPECT TO THE ALLEGED ERROR, IMPOSES ANY DUTY ON THE UNITED STATES, AFTER ACCEPTANCE OF THE BID AND PERFORMANCE OF THE CONTRACT, TO PAY ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE, ALTHOUGH IT APPEARS FROM THE FACTS AS NOW PRESENTED THAT A RESCISSION OF THE CONTRACT MIGHT HAVE BEEN AUTHORIZED HAD THE MATTER BEEN PRESENTED TO THE GENERAL ACCOUNTING OFFICE BEFORE PERFORMANCE; AND THE FACT THAT THE BIDDER MAY HAVE BEEN INDUCED, THROUGH STATEMENTS MADE BY AN OFFICER OR EMPLOYEE OF THE GOVERNMENT, TO MAKE DELIVERY OF THE MATERIAL IN THE HOPE OR BELIEF THAT IT WOULD BE PAID SOME AMOUNT IN ADDITION TO THE BID PRICE DOES NOT AFFECT THE LEGAL RIGHTS OR OBLIGATIONS UNDER THE CONTRACT. IN ORDER TO AUTHORIZE RELIEF ON ACCOUNT OF A 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 THE ACCEPTING OFFICER KNEW OF THE MISTAKE AT TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF.

DECISION BY ACTING COMPTROLLER GENERAL ELLIOTT, NOVEMBER 30, 1937:

MATHEWS PLUMBING AND HEATING CO. HAS REQUESTED REVIEW OF SETTLEMENT NO. 0678199, DATED OCTOBER 27, 1937, WHEREBY WAS DISALLOWED ITS CLAIM FOR THE SUM OF $102, ALLEGED TO BE DUE BY REASON OF ERROR IN BID ON CERTAIN SEWER PIPE FURNISHED THE WORKS PROGRESS ADMINISTRATION AT FREDONIA, N.Y.

IT APPEARS THAT UNDER DATE OF MARCH 2, 1936, THE NEW YORK STATE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT ADVERTISED FOR BIDS TO BE OPENED MARCH 6, 1936, FOR THE FURNISHING OF 300 FEET, 24-INCH DOUBLE STRENGTH VITRIFIED TILE SEWER PIPE, 3 FEET, B. AND S., FEDERAL SPECIFICATIONS SS-C-361. THE MATHEWS PLUMBING AND HEATING CO. SUBMITTED A BID OF $1.24 PER FOOT, TOTAL $372, WHICH, BEING THE LOWEST BID RECEIVED, WAS ACCEPTED, AND PURCHASE ORDER WAS ISSUED MARCH 6, 1936. THE OTHER BIDS RECEIVED RANGED IN PRICE FROM $1.665 TO $1.91 PER FOOT. IT FURTHER APPEARS THAT AFTER THE BID WAS ACCEPTED AND PURCHASE ORDER ISSUED, THE COMPANY ADVISED BY TELEPHONE THAT AN ERROR IN BID HAD BEEN MADE AND THE TELEPHONE CONVERSATION WAS CONFIRMED BY LETTER OF MARCH 6, 1936, IT BEING ALLEGED THAT THE BID HAD BEEN FIGURED ON PIPE 20 INCHES IN DIAMETER INSTEAD OF ON PIPE 24 INCHES IN DIAMETER AS CALLED FOR IN THE SPECIFICATIONS. IN THE LETTER OF CONFIRMATION THE COMPANY ALLEGED THAT ITS BID PRICE FOR THE PIPE SHOULD HAVE BEEN $1.58 PER FOOT AND STATED:

WE UNDERSTAND FROM OUR TELEPHONE CONVERSATION THAT WE SHOULD SHIP THE PIPE AS QUOTED AND SUBMIT CLAIM FOR CONSIDERATION OF YOUR CLAIMS BRANCH IN WASHINGTON. WE WILL, OF COURSE, SHIP AND BILL ACCORDINGLY BUT THIS LETTER IS OUR CLAIM FOR $102.00 AT ISSUE.

THE PIPE WAS FURNISHED, THE BID PRICE WAS PAID, AND THE CLAIM FOR THE ADDITIONAL SUM OF $102 WAS DISALLOWED.

WHILE THE COMPANY, IN ITS REQUEST FOR REVIEW, STATES THE CONTRACTING OFFICER REALIZED THAT AN ERROR HAD BEEN MADE AND SO ADVISED IT IN THE TELEPHONE CONVERSATION REFERRED TO ABOVE, THE RECORD IS TO THE EFFECT THAT THE TELEPHONE CONVERSATION WAS AFTER ACCEPTANCE AND SUCH FACT IS NOT DISPUTED BY THE COMPANY. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER, BEFORE ACCEPTANCE OF THE BID, REALIZED THAT A MISTAKE HAD BEEN MADE IN THE BID. THERE WAS NOTHING IN THE BID ITSELF TO SUGGEST THAT AN ERROR HAD BEEN MADE THEREIN. THE SPECIFICATIONS WERE CLEAR AND UNAMBIGUOUS. IF THE BIDDER MADE A MISTAKE IN SUBMITTING ITS BID THE MISTAKE WAS DUE SOLELY TO THE BIDDER'S OWN NEGLIGENCE, THE MISTAKE NOT BEING INDUCED BY, OR IN ANY WAY CONTRIBUTED TO, BY THE GOVERNMENT. THERE IS NO OBLIGATION ON THE PART OF THE GOVERNMENT TO HAVE ITS CONTRACTING OFFICERS ACT AS GUARDIANS FOR CARELESS BIDDERS (8 COMP. GEN. 397), AND THE FAILURE OF THE CONTRACTING OFFICER IN THIS INSTANCE--- AFTER COMPARISON OF THIS BID WITH THE OTHER BIDS RECEIVED--- TO NOTICE PROBABILITY OF ERROR AND TO ASK FOR VERIFICATION BEFORE MAKING AN AWARD, IMPOSES NO DUTY ON THE UNITED STATES AFTER ACCEPTANCE OF THE BID AND PERFORMANCE OF THE CONTRACT, TO PAY ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE.

THE ACCEPTANCE OF THE BID AS SUBMITTED CONSUMMATED A CONTRACT AND FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO. THE OBLIGATION OF THE UNITED STATES AS SO FIXED COULD NOT SUBSEQUENTLY BE CHANGED BY ANY ACTION OF GOVERNMENT OFFICERS EXCEPT FOR ITS OWN BENEFIT OR UPON SOME NEW AND VALUABLE CONSIDERATION PASSING TO THE GOVERNMENT. PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT.CLS. 327.

WHILE IT APPEARS FROM THE FACTS AS NOW PRESENTED THAT A RESCISSION OF THE CONTRACT MIGHT HAVE BEEN AUTHORIZED HAD THE MATTER BEEN PRESENTED TO THIS OFFICE BEFORE PERFORMANCE (MOFFETT V. ROCHESTER, 178 U.S. 373), THE RECORD SHOWS THAT THE COMPANY ELECTED TO PERFORM THE CONTRACT INSTEAD OF REFUSING TO PERFORM BECAUSE OF MISTAKE. THE FACT THAT THE COMPANY MAY HAVE BEEN INDUCED, THROUGH STATEMENTS MADE BY AN OFFICER OR EMPLOYEE OF THE GOVERNMENT TO MAKE DELIVERY OF THE MATERIAL IN THE HOPE OR BELIEF THAT IT WOULD BE PAID SOME AMOUNT IN ADDITION TO THE BID PRICE, DOES NOT AFFECT THE LEGAL RIGHTS OR OBLIGATIONS UNDER THE CONTRACT. THE COMPANY, IN MAKING DELIVERY, DID NO MORE THAN IT WAS OBLIGATED TO DO UNDER ITS ACCEPTED BID, AND AS IT HAS BEEN PAID IN FULL AT THE CONTRACT PRICE, THERE IS NOTHING FURTHER DUE IT. SEE WILLARD, SUTHERLAND AND CO. V. UNITED STATES, 262 U.S. 489.

THE GENERAL RULE IS THAT WHEN THERE HAS BEEN A MISTAKE IN THE SUBMISSION OF A BID THE CONTRACTOR MUST BEAR THE CONSEQUENCES THEREOF. IN ORDER TO AUTHORIZE RELIEF ON ACCOUNT OF A 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 THE ACCEPTING OFFICER KNEW OF THE MISTAKE AT TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF. THE RECORD IN THIS CASE SHOWS THAT THE BID WAS ACCEPTED BY THE CONTRACTING OFFICER IN GOOD FAITH WITHOUT NOTICE OF ANY ERROR.

THE FACT THAT THE COMPANY ELECTED TO ACT ON THE CONTRACTING OFFICER'S INSTRUCTIONS TO MAKE DELIVERY OF THE MATERIAL AND TO PRESENT A CLAIM FOR ANY AMOUNT TO WHICH IT BELIEVED ITSELF ENTITLED IN ADDITION TO THE CONTRACT PRICE, DOES NOT REQUIRE OR AUTHORIZE ALLOWANCE OF THE CLAIM. ELECTING TO FOLLOW SUCH PROCEDURE THE COMPANY REMOVED FROM CONSIDERATION THE QUESTION AS TO WHETHER, UNDER THE FACTS AND CIRCUMSTANCES APPEARING, IT COULD HAVE BEEN PERMITTED TO WITHDRAW ITS BID, THAT IS, HAVE BEEN RELIEVED FROM PERFORMANCE HAD IT SO REQUESTED.

SINCE THE MISTAKE WAS NOT MUTUAL AND WAS NOT ALLEGED UNTIL AFTER THE BID HAD BEEN ACCEPTED IN GOOD FAITH, AND THE COMPANY HAS BEEN PAID THE BID PRICE FOR THE MATERIAL DELIVERED, THERE IS NO LEGAL BASIS FOR PAYMENT OF ANY AMOUNT IN ADDITION THERETO. SEE ELLICOTT MACHINE CO. V. UNITED STATES, 44 CT.CLS. 127, AND AMERICAN WATER SOFTENER CO. V. UNITED STATES, 50 CT.CLS. 209. SEE ALSO 20 COMP. DEC. 304; 22 COMP. DEC. 529; 25 COMP. DEC. 35; 5 COMP. GEN. 605; ID. 781; ID. 946; 6 COMP. GEN. 526; ID. 815; 7 COMP. GEN. 493; 8 COMP. GEN. 362; 9 COMP. GEN. 361; ID. 446; 16 COMP. GEN. 779; AND 17 COMP. GEN. 373.