A-91161, JANUARY 10, 1938, 17 COMP. GEN. 560

A-91161: Jan 10, 1938

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GENERAL RULE AS TO RELIEF WHERE SOLE BID WAS ACCEPTED IN GOOD FAITH AND PURCHASE ORDER ISSUED BEFORE BIDDER ALLEGED ERROR IN THE BID. THERE IS NO LEGAL BASIS FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE ACCEPTED BID PRICE BECAUSE OF BIDDER'S CLAIM IT HAD OVERLOOKED THE SPECIFICATION REQUIREMENTS AS TO THE TYPE OR QUALITY OF MATERIAL AND THAT THE BID PRICE WAS LOWER THAN THE COST TO IT OF THE MATERIAL ACTUALLY REQUIRED. THE GENERAL RULE IS THAT WHEN THERE HAS BEEN A MISTAKE IN A BID ON WHICH A GOVERNMENT CONTRACT IS BASED. IT MUST APPEAR THAT THE MISTAKE WAS MUTUAL OR THAT THE ERROR WAS SO APPARENT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AT THE TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF.

A-91161, JANUARY 10, 1938, 17 COMP. GEN. 560

CONTRACTS - MISTAKES - BIDS - ACCEPTANCE IN GOOD FAITH, NEGLIGENCE OF BIDDER, AND GENERAL RULE AS TO RELIEF WHERE SOLE BID WAS ACCEPTED IN GOOD FAITH AND PURCHASE ORDER ISSUED BEFORE BIDDER ALLEGED ERROR IN THE BID, THERE IS NO LEGAL BASIS FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE ACCEPTED BID PRICE BECAUSE OF BIDDER'S CLAIM IT HAD OVERLOOKED THE SPECIFICATION REQUIREMENTS AS TO THE TYPE OR QUALITY OF MATERIAL AND THAT THE BID PRICE WAS LOWER THAN THE COST TO IT OF THE MATERIAL ACTUALLY REQUIRED, THERE HAVING BEEN NO ERROR APPARENT ON THE FACE OF THE BID AND NOTHING OF RECORD TO INDICATE THE CONTRACTING OFFICER REALIZED, BEFORE ACCEPTANCE OF THE BID, THAT A MISTAKE HAD BEEN MADE; THE SPECIFICATIONS HAVING BEEN CLEAR AND UNAMBIGUOUS AND ANY MISTAKE HAVING RESULTED SOLELY FROM THE BIDDER'S NEGLIGENCE. THE GENERAL RULE IS THAT WHEN THERE HAS BEEN A MISTAKE IN A BID ON WHICH A GOVERNMENT CONTRACT IS BASED, THE CONTRACTOR MUST BEAR THE CONSEQUENCES THEREOF, AND IN ORDER TO AUTHORIZE RELIEF ON ACCOUNT OF MISTAKE IN AN ACCEPTED BID, IT MUST APPEAR THAT THE MISTAKE WAS MUTUAL OR THAT THE ERROR WAS SO APPARENT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AT THE TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE MIDWEST LUMBER CO., JANUARY 10, 1938:

YOUR LETTER OF NOVEMBER 8, 1937, REQUESTS REVIEW OF SETTLEMENT DATED NOVEMBER 4, 1937, WHICH DISALLOWED YOUR CLAIM FOR $101.87, ALLEGED TO BE DUE YOU BY REASON OF ERROR IN BID ON WHITE PORTLAND CEMENT FURNISHED THE WORKS PROGRESS ADMINISTRATION AT VAN HOOK, N.DAK., UNDER YOUR PROPOSAL DATED SEPTEMBER 9, 1936, ACCEPTED SEPTEMBER 12, 1936.

IT APPEARS THAT UNDER DATE OF SEPTEMBER 5, 1936, THE NORTH DAKOTA STATE PROCUREMENT DIVISION OF THE TREASURY DEPARTMENT ADVERTISED FOR BIDS TO BE OPENED SEPTEMBER 11, 1936, FOR DELIVERY F.O.B. FIRE HALL, VAN HOOK, N.DAK., OF APPROXIMATELY 65 BAGS OF CEMENT, WHITE, WATERPROOF, PORTLAND, IN PAPER BAGS, 1 CUBIC FOOT CAPACITY, FEDERAL SPECIFICATIONS NO. 55-C-191, AND FOR DELIVERY F.O.B., VENDOR'S YARD OR CAR, VAN HOOK, N.DAK., APPROXIMATELY 7 BAGS OF HYDRATED LIME, TYPE M, FEDERAL SPECIFICATIONS NO. 55-L-351, OCTOBER 14, 1930. YOUR PROPOSAL TO DELIVER SAID CEMENT FOR $1 A BAG AND THE LIME FOR $0.80 A BAG, F.O.B. CAR, VAN HOOK, N.DAK., WAS THE ONLY ONE RECEIVED AND WAS ACCEPTED ON SEPTEMBER 12, 1936. IT FURTHER APPEARS THAT UPON RECEIPT OF THE PURCHASE ORDER FOR THE MATERIAL YOU ADVISED THE PROCUREMENT OFFICER BY LETTER DATED SEPTEMBER 17, 1936, THAT AN ERROR IN BID ON THE CEMENT HAD BEEN MADE, IT BEING ALLEGED THAT YOU OVERLOOKED THE FACT THAT WHITE CEMENT WAS SPECIFIED AND THAT YOU BID ON THE BASIS OF FURNISHING ORDINARY PORTLAND CEMENT. ON SEPTEMBER 18, 1936, YOU DELIVERED 65 BAGS OF WHITE PORTLAND CEMENT AND 7 BAGS OF HYDRATED LIME AND PAYMENT WAS MADE THEREFOR AT THE CONTRACT PRICE. THEREAFTER, YOU SUBMITTED A CLAIM FOR $101.87 AS THE BALANCE ALLEGED TO BE DUE YOU FOR THE CEMENT, BASED ON THE ACTUAL COST TO YOU PLUS 15 PERCENT PROFIT, AND YOUR CLAIM WAS DISALLOWED IN THE AFORESAID SETTLEMENT.

IN YOUR LETTER OF NOVEMBER 8, 1937, REQUESTING REVIEW, YOU REFER TO THE FACT THAT YOU ACTUALLY PAID $1.96 1/4 A BAG FOR THE CEMENT, AND THAT WHEN YOU QUOTED THE PRICE OF $1 A BAG, THE ERROR MUST HAVE BEEN APPARENT TO THE PROCUREMENT OFFICER BUT THAT HE EVIDENTLY TOOK ADVANTAGE OF THIS LOW BID.

THE STANDARD INSTRUCTIONS TO BIDDERS TO WHICH YOUR ATTENTION WAS INVITED BY THE INVITATION FOR BIDS PROVIDED IN PARAGRAPHS 14 AND 19, AS FOLLOWS:

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 IT 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 CANNOT SECURE RELIEF ON THE PLEA OF ERROR IN THE BID. IN CASE OF ERROR IN THE EXTENSION OF PRICES THE UNIT PRICE WILL GOVERN.

THERE WAS NO ERROR APPARENT ON THE FACE OF YOUR BID, EITHER IN UNIT PRICE OR EXTENDED TOTAL FOR THE ITEM OF CEMENT. THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER, BEFORE ACCEPTANCE OF YOUR BID, REALIZED THAT A MISTAKE HAD BEEN MADE BY YOU IN YOUR BID. THE SPECIFICATIONS WERE CLEAR AND UNAMBIGUOUS. IF YOU MADE A MISTAKE IN SUBMITTING YOUR BID, SUCH A MISTAKE WAS DUE SOLELY TO YOUR OWN NEGLIGENCE, THE MISTAKE NOT BEING INDUCED BY, OR IN ANYWAY CONTRIBUTED TO, BY THE GOVERNMENT. ON THE CONTRARY, YOU WERE CAUTIONED IN THE INSTRUCTIONS TO BIDDERS, SUPRA, THAT YOU COULD NOT SECURE RELIEF ON ACCOUNT OF YOUR FAILURE TO EXAMINE THE SPECIFICATIONS. THERE EXISTS 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, IF ANY, OF THE CONTRACTING OFFICER IN THIS INSTANCE TO NOTICE PROBABILITY OF ERROR AND TO ASK FOR VERIFICATION BEFORE MAKING AN AWARD, IMPOSES NO OBLIGATION ON THE UNITED STATES AFTER THE ACCEPTANCE OF YOUR BID AND PERFORMANCE ON YOUR PART, TO PAY ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE.

THE ACCEPTANCE OF YOUR 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 CANNOT BE SUBSEQUENTLY 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 THE RECORD SHOWS THAT UPON YOUR ALLEGATION OF ERROR IN BID THE CONTRACTING OFFICER REQUESTED YOU TO MAKE DELIVERY OF THE MATERIAL IN QUESTION AND TO SUBMIT A CLAIM FOR THE BALANCE ALLEGED TO BE DUE YOU, SUCH FACTS DO NOT AFFECT THE LEGAL RIGHTS OR OBLIGATIONS UNDER THE CONTRACT. IN MAKING DELIVERY, YOU DID NO MORE THAN YOU WERE OBLIGATED TO DO UNDER YOUR ACCEPTED BID AND SINCE YOU HAVE BEEN PAID IN FULL AT THE CONTRACT PRICE, NOTHING FURTHER IS DUE YOU. WILLARD, SUTHERLAND AND COMPANY V. UNITED STATES, 262 U.S. 489.

THE GENERAL RULE IS THAT WHEN THERE HAS BEEN A MISTAKE IN BID ON WHICH A CONTRACT IS BASED, THE CONTRACTOR MUST BEAR THE CONSEQUENCES THEREOF. 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 CONTRACTING 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.

SINCE THE MISTAKE WAS NOT MUTUAL AND WAS NOT ALLEGED UNTIL AFTER THE BID HAD BEEN ACCEPTED IN GOOD FAITH, AND YOU HAVE BEEN PAID THE BID PRICE FOR THE MATERIAL DELIVERED, THERE IS NO LEGAL BASIS FOR THE PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE. SEE ELLICOTT MACHINE CO. V. UNITED STATES, 44 CT.CLS. 127, AND AMERICAN WATER SOFTENER COMPANY V. UNITED STATES, 50 CT.CLS. 209. SEE ALSO, 20 COMP. DEC. 304; 22 ID. 529; 25 ID. 37; 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.