A-91103, JANUARY 17, 1938, 17 COMP. GEN. 575

A-91103: Jan 17, 1938

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NOTWITHSTANDING CONTRACTING OFFICER WAS ON NOTICE BIDDER HAD MADE A BONA FIDE ERROR. DOES NOT JUSTIFY CORRECTION OF THE BID PRICE WHERE THERE IS ANY DOUBT AS TO THE AMOUNT ORIGINALLY INTENDED TO BE BID. IS AS FOLLOWS: IN CONFORMITY WITH YOUR LETTER DATED DECEMBER 14. THERE ARE FURNISHED HEREWITH A COPY OF THE ADVERTISED SPECIFICATIONS. THE BIDS UNDER THIS INVITATION WERE OPENED AT 10 A.M. ARE HEREWITH ENCLOSED. CONTRACT AND PERFORMANCE BOND DOCUMENTS SENT THE BIDDER FOR ACCOMPLISHMENT HAVE NOT BEEN RETURNED TO DATE. THE MATERIALS THE CONTRACTOR WOULD HAVE TO PROVIDE. WHILE THE ALLEGED OMISSION OF THE THREAD COST IN THE PRICES BID IS TO SOME EXTENT CORROBORATED BY THE QUOTATIONS OF THE OTHER BIDDERS.

A-91103, JANUARY 17, 1938, 17 COMP. GEN. 575

CONTRACTS - MISTAKES - BIDS - ACTUAL NOTICE PRIOR TO AWARD - CORRECTION OF BID PRICE OR CANCELLATION OF AWARD ACCEPTANCE OF LOW BID, NOTWITHSTANDING CONTRACTING OFFICER WAS ON NOTICE BIDDER HAD MADE A BONA FIDE ERROR, DOES NOT JUSTIFY CORRECTION OF THE BID PRICE WHERE THERE IS ANY DOUBT AS TO THE AMOUNT ORIGINALLY INTENDED TO BE BID, BUT THE ACCEPTANCE UNDER SUCH CIRCUMSTANCES DID NOT GIVE RISE TO A BINDING CONTRACT AND MAY BE CANCELED WITHOUT FORFEITURE OF BID SECURITY. 17 COMP. GEN. 416; ID. 532, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, JANUARY 17, 1938:

YOUR LETTER OF DECEMBER 23, 1937, IS AS FOLLOWS:

IN CONFORMITY WITH YOUR LETTER DATED DECEMBER 14, 1937, FILE NO. A 91103, THERE ARE FURNISHED HEREWITH A COPY OF THE ADVERTISED SPECIFICATIONS, AN ABSTRACT OF THE BIDS RECEIVED, AND A SIGNED NUMBER OF THE BID SUBMITTED BY JOSEPH SPIOTTA AND COMPANY, 449 CENTRAL AVENUE, NEWARK, NEW JERSEY, FOR THE MANUFACTURE AND DELIVERY TO THE PHILADELPHIA QUARTERMASTER DEPOT OF 100,000 PAIRS TROUSERS, WOOL, SERVICE, O.D., UNDER INVITATION FOR BIDS NO. 669-38-85.

THE BIDS UNDER THIS INVITATION WERE OPENED AT 10 A.M., NOVEMBER 10, 1937, AS SCHEDULED. AT :45 P.M. THE SAME DAY, THE CONTRACTING OFFICER HAVING NOTICED THE UNUSUALLY LOW PRICES OF $0.425 AND $0.445 PER PAIR, TELEPHONED THE BIDDER FOR CONFIRMATION OF THESE QUOTATIONS. A TRANSCRIPT OF THIS CONVERSATION, ALSO THE BIDDER'S LETTER OF NOVEMBER 10, 1937, RESULTING THEREFROM, AND LETTER FROM THE COMMANDING OFFICER, PHILADELPHIA QUARTERMASTER DEPOT, DATED NOVEMBER 11, 1937, FORWARDING THE CASE FOR INSTRUCTIONS, ARE HEREWITH ENCLOSED.

PURSUANT TO THE DEPARTMENT'S INSTRUCTIONS, THE CONTRACTING OFFICER, BY LETTER DATED NOVEMBER 23, 1937, NOTIFIED THE BIDDER OF THE AWARD OF 60,000 PAIRS TROUSERS AT $0.425 EACH, AND 40,000 PAIRS AT $0.445 EACH, ON THE BID AS SUBMITTED. CONTRACT AND PERFORMANCE BOND DOCUMENTS SENT THE BIDDER FOR ACCOMPLISHMENT HAVE NOT BEEN RETURNED TO DATE; NOR HAS THE BIDDER TAKEN ANY STEPS TO BEGIN PERFORMANCE UNDER THE AWARD MADE.

THE INVITATION AS ISSUED SHOWS CLEARLY THE MATERIALS THAT WOULD BE PROVIDED BY THE GOVERNMENT, AND, BY REFERENCE TO THE SPECIFICATIONS, THE MATERIALS THE CONTRACTOR WOULD HAVE TO PROVIDE.

WHILE THE ALLEGED OMISSION OF THE THREAD COST IN THE PRICES BID IS TO SOME EXTENT CORROBORATED BY THE QUOTATIONS OF THE OTHER BIDDERS, IT IS NEVERTHELESS CONSIDERED THAT THE BIDDER SHOULD BE HELD TO THE TERMS OF ITS BID AS SUBMITTED. TO PERMIT THE BID TO BE DISREGARDED, OR TO AUTHORIZE AN INCREASE IN THE QUOTATION, WOULD, IN THE OPINION OF THIS OFFICE, DETRACT FROM THE HIGH REGARD WHICH SHOULD BE ACCORDED TO THE PREPARATION OF BIDS, AND WOULD THUS ADVERSELY AFFECT THE INTEREST OF THE UNITED STATES.

IN MY DECISION TO YOU OF DECEMBER 31, 1937, A-91442, 17 COMP. GEN. 536, IN THE KERR CONSERVING CO. CASE, IT WAS SAID:

THERE IS, OF COURSE, NO OBLIGATION ON THE PART OF THE GOVERNMENT TO HAVE ITS CONTRACTING OFFICERS ACT AS GUARDIANS FOR CARELESS BIDDERS, 8 COMP. GEN. 397, AND THIS OFFICE AGREES WITH THE SUGGESTION IN YOUR LETTER, SUPRA, AS TO THE NECESSITY OF IMPRESSING UPON ALL BIDDERS THE DEGREE OF CARE REQUIRED IN THE PREPARATION OF ALL BIDS. HOWEVER, WHEN AN ERROR IS ALLEGED AND CLEARLY ESTABLISHED BEFORE AN AWARD IS MADE, THE ACCEPTANCE OF THE BID WOULD NOT BE IN GOOD FAITH, AND, THEREFORE, WOULD NOT GIVE RISE TO A BINDING CONTRACT.

IN THE PRESENT CASE, AS IN THE KERR CONSERVING CO. CASE, IT APPEARS THAT THE ERROR IN THE BID WAS ALLEGED BEFORE THE BID WAS ACCEPTED AND IS CLEARLY ESTABLISHED. THE DISCREPANCY BETWEEN THE PRICES BID BY JOSEPH SPIOTTA AND CO. AND THE OTHER BIDS RECEIVED WAS ENOUGH TO CAUSE THE CONTRACTING OFFICER TO CALL ON THAT COMPANY FOR VERIFICATION OF ITS BID, AND IT DEVELOPED THAT THE COMPANY HAD BID ON THE ASSUMPTION THAT THE GOVERNMENT WAS TO FURNISH ALL MATERIALS, WHEREAS THE SPECIFICATIONS REQUIRED THE CONTRACTOR TO FURNISH THE THREAD, GIMP, AND CERTAIN OTHER FINDINGS FOR THE TROUSERS, THE THREAD BEING THE PRINCIPAL ITEM OF DIFFERENCE, RUNNING TO ABOUT 10 CENTS A PAIR IN THE COST OF FABRICATING THE GARMENTS, OR A DIFFERENCE OF SOME $10,000 FOR THE 100,000 GARMENTS COVERED BY THE BID. AN EXAMINATION OF THE SPECIFICATIONS INDICATES THERE MAY HAVE BEEN REASON FOR SOME CONFUSION AS TO WHETHER THE GOVERNMENT WAS TO FURNISH THE THREAD, ALTHOUGH A CAREFUL READING SHOWS THAT THE THREAD WAS TO BE FURNISHED BY THE CONTRACTOR. HOWEVER THIS MAY BE, THE EVIDENCE SUBMITTED SUFFICIENTLY SHOWS THAT A BONA FIDE ERROR WAS MADE AND THAT IT WAS ALLEGED AND THE CONTRACTING OFFICER WAS ON NOTICE THEREOF BEFORE THE BID WAS ACCEPTED. IT MUST BE HELD ACCORDINGLY THAT THE ACCEPTANCE DID NOT GIVE RISE TO A BINDING CONTRACT. NASON COAL COMPANY V. UNITED STATES, 64 CT.CLS. 526. IT IS NOTED, ALSO, THAT THE BID WAS NOT ACCEPTED WITHIN THE LIMIT OF 5 DAYS STIPULATED IN THE BID. SEE 17 COMP. GEN. 408.

THE SITUATION HERE IS CLEARLY DISTINGUISHABLE FROM THAT INVOLVED IN MY DECISION TO YOU OF DECEMBER 29, 1937, A-91214, 17 COMP. GEN. 532, IN THE EX-CELL-O CORPORATION CASE. IN THAT CASE WHILE AN ERROR IN THE LOW BID WAS ALLEGED BEFORE AN AWARD WAS MADE, THE RECORD DID NOT ESTABLISH THAT THE ALLEGED ERROR HAD ACTUALLY BEEN MADE AND THERE WAS ROOM FOR DOUBT THAT THERE WAS IN FACT AN ERROR. ON THAT STATE OF FACTS IT WAS HELD THAT NEITHER CORRECTION OF THE BID NOR ITS REJECTION WITH WAIVER OF THE BID BOND WAS AUTHORIZED, AND ACCORDINGLY, THAT THE BIDDER SHOULD BE REQUIRED TO PERFORM AT ITS BID PRICE OR FORFEIT ITS BOND. SEE, ALSO, 15 COMP. GEN. 1049. IN THE PRESENT CASE THERE WAS A PRESUMPTION OF ERROR ON THE FACE OF THE BIDS AND THE RECORD ESTABLISHES THAT A BONA FIDE ERROR WAS MADE. BINDING CONTRACT CANNOT BE MADE BY ATTEMPTING TO TAKE ADVANTAGE OF SUCH A SITUATION BY ACCEPTANCE OF THE BID AFTER NOTICE OF THE ERROR.

IN MY DECISION TO YOU OF NOVEMBER 20, 1937, A-90411, 17 COMP. GEN. 416, IN THE SIMILAR HIGGINS INDUSTRIES, INC., CASE, WHERE A BONA FIDE ERROR IN THE LOW BID FOR THE CONSTRUCTION OF A 50-FOOT INSPECTION BOAT FOR THE DISTRICT ENGINEER AT BALTIMORE, MD., WAS ALLEGED AND ESTABLISHED BEFORE ANY AWARD OF THE CONTRACT, IT WAS SAID:

THE DISPARITY BETWEEN THE LOW BID AND THE OTHER BIDS, TOGETHER WITH THE CIRCUMSTANCE THAT THE LOW BID WAS SUBSTANTIALLY BELOW THE PRIOR ESTIMATE OF THE COST OF THE BOAT, WHEREAS THE NEXT LOW BID AND ALL OTHERS WERE SUBSTANTIALLY ABOVE SUCH ESTIMATE, SUFFICIENTLY WARRANTS THE CONCLUSION, PRIMA FACIE, THAT SUCH A BONA FIDE MISTAKE WAS MADE BY THE LOW BIDDER AS TO AUTHORIZE THE WITHDRAWAL OF THE LOW BID WITHOUT FORFEITURE OF THE BID SECURITY.

THE ALLEGATION OF THE LOW BIDDER MAY NOT BE ACCEPTED, HOWEVER, AS ESTABLISHING THE AMOUNT OF THE MISTAKE, AND IF, INSTEAD OF WITHDRAWAL OF THE ERRONEOUS BID, THE LOW BIDDER SEEKS A CORRECTION THEREOF TO INCLUDE THE AMOUNT ERRONEOUSLY OMITTED, THERE SHOULD BE SUBMITTED TO THIS OFFICE FOR CONSIDERATION THE SWORN STATEMENT OF THE LOW BIDDER SHOWING IN DETAIL WHAT MISTAKE WAS MADE AND HOW IT OCCURRED, TOGETHER WITH THE SWORN ORIGINAL WORK AND ESTIMATE SHEETS, ETC., RELIED UPON TO ESTABLISH THE EXACT AMOUNT WHICH WAS INTENDED TO BE BID. SEE 8 COMP. GEN. 397; 16 ID. 193.

IN MY DECISION TO YOU OF JANUARY 4, 1938, IN THE SAME MATTER, IT WAS HELD THAT THE FACTS SUBSEQUENTLY SUBMITTED SUFFICIENTLY ESTABLISHED THAT THE BIDDER INTENDED TO INCLUDE, BUT OMITTED FROM ITS BID, AN ITEM OF $8,975.27 FOR OVERHEAD, BUT THAT THEY DID NOT ESTABLISH THE AMOUNT OF $900 FOR INSURANCE ALLEGED TO HAVE BEEN OMITTED, AND THAT ACCORDINGLY THIS OFFICE WOULD NOT BE REQUIRED TO OBJECT TO THE CORRECTION OF THE BID BY THE ADDITION OF THE SAID AMOUNT OF $8,975.27, AND THE AWARDING OF THE CONTRACT TO THE BIDDER ON THE BASIS OF ITS BID SO CORRECTED, IF OTHERWISE THE LOW BIDDER AND ENTITLED TO SUCH AWARD.

IN THE PRESENT CASE THE BIDDER DOES NOT SEEK TO HAVE ITS BID CORRECTED SO AS TO HAVE INCLUDED THEREIN A PREVIOUSLY CALCULATED ITEM WHICH IT ACTUALLY INTENDED TO INCLUDE IN, BUT WHICH WAS INADVERTENTLY OMITTED FROM, THE AMOUNT OF ITS ORIGINAL BID, AS IN THE HIGGINS CASE. RATHER IT PROPOSES TO CHANGE AND INCREASE ITS BID BY THE AMOUNT WHICH IT NOW CONSIDERS NECESSARY TO COVER THE COST OF REQUIRED ITEMS WHICH IT OVERLOOKED IN MAKING THE BID. THE DISTINCTION IS MATERIAL. THE BASIC RULE IS, OF COURSE, THAT BIDS MAY NOT BE CHANGED AFTER THEY ARE OPENED, AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED UPON SUFFICIENT FACTS ESTABLISHING THAT A BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN SET DOWN ON THE BID FORM, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF THE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE AND CHANGE HIS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED, OR AS TO WHICH HE HAS SINCE CHANGED HIS MIND. PERMIT THIS WOULD REDUCE TO A MOCKERY THE PROCEDURE OF COMPETITIVE BIDDING REQUIRED BY LAW IN THE LETTING OF PUBLIC CONTRACTS. SEE A-89734, JANUARY 8, 1938, 17 COMP. GEN. 554, ALSO A-91408, DECEMBER 31, 1937, ADDRESSED TO YOU IN THE FAGEOL TRUCK AND COACH CO. CASE; A-90611, DECEMBER 17, 1937, AND 13 OP.ATTY.GEN. 510.

ACCORDINGLY, YOU ARE ADVISED THAT THE SUGGESTED INCREASE IN THE ERRONEOUS BID PRICE OF JOSEPH SPIOTTA AND CO. IS NOT AUTHORIZED, BUT THAT THE ACCEPTANCE SHOULD BE CANCELED AND THE BID DISREGARDED WITHOUT FORFEITURE OF BID SECURITY.