A-92354, FEBRUARY 16, 1938, 17 COMP. GEN. 659

A-92354: Feb 16, 1938

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WAS THE LOWEST RESPONSIBLE BIDDER ON CIRCULAR ADVERTISEMENT OF DECEMBER 28. THE TERMS OF THE INVITATION ON WHICH THE BID WAS SUBMITTED REQUIRED WITH EACH BID A GUARANTEE DEPOSIT OF 20 PERCENTUM OF THE AMOUNT BID. THE RIGHT WAS RESERVED IN THE INVITATION . THE NEXT LOWEST BID WAS $7. WHILE THE SUPERINTENDENT OF THE NATIONAL TRAINING SCHOOL IS SAID TO HAVE CALLED UPON THE LOWEST BIDDER PROMPTLY TO VERIFY ITS BID. IT IS NOT APPARENT THAT HE WAS ON NOTICE OR UNDER ANY DUTY TO DO SO BY REASON OF ANY PATENT OR INORDINATE DISCREPANCY IN THE BIDS. THE POINT IS NOT MATERIAL. IT IS OUR DESIRE TO PRESENT TO YOU A CLEAR UNDERSTANDING OF OUR ERROR IN THE HOPE THAT WE MAY BE PERMITTED TO WITHDRAW OUR BID.

A-92354, FEBRUARY 16, 1938, 17 COMP. GEN. 659

CONTRACTS - MISTAKES - BIDS - NEGLIGENCE - FORFEITURE OF BID DEPOSIT UPON REFUSAL TO PERFORM A BIDDER MAY NOT BE RELIEVED OF A MISTAKE IN BID PRICE WHERE CAUSED BY HIS OWN CARELESSNESS OR INATTENTION TO DETAILS, AND WHERE AWARD HAS NOT BEEN MADE, AND THE BIDDER, AFTER THE OPENING OF BIDS, ALLEGES MISTAKE IN THAT HE FAILED TO INCLUDE AN ESTIMATE TEMPORARILY LAID ASIDE DURING THE COMPUTATION ON OTHER ITEMS, INSISTS UPON WITHDRAWAL OF HIS BID, HE MAY NOT BE PERMITTED TO DO SO WITHOUT FORFEITURE OF THE BID DEPOSIT.

ACTING COMPTROLLER GENERAL ELLIOTT TO MARK L. BRISTOL, ACTING PRESIDENT, BOARD OF TRUSTEES AND CONTRACTING OFFICER, THE NATIONAL TRAINING SCHOOL FOR BOYS, FEBRUARY 16, 1938:

YOUR LETTER OF FEBRUARY 1, 1938, REQUESTS DECISION OF WHETHER O. D. WILSON CO., INC., MAY BE ALLOWED TO WITHDRAW ITS BID OPENED JANUARY 11, 1938, OR WHETHER PAYMENT AT A HIGHER FIGURE WOULD BE AUTHORIZED IF THE SAID BIDDER PROCEEDS WITH THE CONTRACT WORK.

YOU REPORT THAT THE O. D. WILSON CO., INC., WAS THE LOWEST RESPONSIBLE BIDDER ON CIRCULAR ADVERTISEMENT OF DECEMBER 28, 1937, FOR WORK INCIDENT TO ALTERATIONS IN THE GYMNASIUM BUILDING, COTTAGES NOS. 2 AND 3, AND THE ADMINISTRATION BUILDING OF THE NATIONAL TRAINING SCHOOL FOR BOYS.

THE TERMS OF THE INVITATION ON WHICH THE BID WAS SUBMITTED REQUIRED WITH EACH BID A GUARANTEE DEPOSIT OF 20 PERCENTUM OF THE AMOUNT BID, REFERRING IN THAT CONNECTION TO PARAGRAPH 8 OF INSTRUCTIONS TO BIDDERS, AND THE BIDDER OFFERED TO ENTER INTO FORMAL CONTRACT, EXECUTE THE REQUIRED PERFORMANCE BOND, ETC., IF ITS BID SHOULD BE ACCEPTED WITHIN 60 DAYS AFTER THE OPENING OF JANUARY 11, 1938. THE RIGHT WAS RESERVED IN THE INVITATION --- AS THE INTEREST OF THE GOVERNMENT MIGHT REQUIRE--- TO REJECT ANY OR ALL BIDS OR TO ACCEPT OR REJECT ANY ITEMS OF ANY BID, ETC.

THE LUMP SUMS BID BY 10 BIDDERS RANGE FROM A LOW OF $5,190 BY THE O. D. WILSON CO., INC., TO A HIGH OF $9,669. THE NEXT LOWEST BID WAS $7,200 AND THE NEXT HIGHEST $8,554, WITH A GRADUATED SPREAD IN BETWEEN. WHILE THE SUPERINTENDENT OF THE NATIONAL TRAINING SCHOOL IS SAID TO HAVE CALLED UPON THE LOWEST BIDDER PROMPTLY TO VERIFY ITS BID, IT IS NOT APPARENT THAT HE WAS ON NOTICE OR UNDER ANY DUTY TO DO SO BY REASON OF ANY PATENT OR INORDINATE DISCREPANCY IN THE BIDS. THE POINT IS NOT MATERIAL, HOWEVER, FOR THE DECISION MUST TURN ON OTHER GROUNDS.

ON JANUARY 12, 1938, FOLLOWING THE OPENING OF THE PREVIOUS DAY, THE O. D. WILSON CO., INC., ADDRESSED YOU IN PERTINENT PART AS FOLLOWS:

* * * IN THE PREPARATION OF OUR BID WE MADE AN INADVERTENT ERROR. IT IS OUR DESIRE TO PRESENT TO YOU A CLEAR UNDERSTANDING OF OUR ERROR IN THE HOPE THAT WE MAY BE PERMITTED TO WITHDRAW OUR BID.

IN THE COMPUTATION OF OUR BID WE NEGLECTED TO INCLUDE THE COST OF INSTALLATION AND FURNISHING OF THE GYMNASIUM FLOOR. THIS IS AN ITEM OF $1,600 IN OUR ESTIMATE. OUR MISTAKE IN NOT INCLUDING THIS ITEM IN THE BID SUBMITTED WAS DUE TO THE FACT THAT THIS FIGURE WAS THE ONLY ONE WHICH DID NOT HAVE TO BE BROKEN DOWN TO ARRIVE AT THE ALTERNATE BIDS WHICH WERE REQUESTED. IN COMPILING OUR BID THIS SUB-BID HAVING BEEN LAID ASIDE FROM THE OTHERS WITH WHICH WE HAD TO WORK WAS UNFORTUNATELY OVERLOOKED.

THE AWARD HAS NOT BEEN MADE AND IF THE BIDDER INSISTS UPON WITHDRAWAL, AND REFUSES TO PERFORM IN ACCORDANCE WITH ITS BID IT APPARENTLY MAY DO SO, SUBJECT TO FORFEITURE OF ITS BID GUARANTEE. A BIDDER MAY NOT BE RELIEVED BECAUSE OF A MISTAKE IN THE AMOUNT OF HIS BID WHERE SUCH MISTAKE WAS CAUSED BY HIS OWN CARELESSNESS OR INATTENTION TO DETAILS. LEONARD V. HOWARD, 67 OR. 203, 135 PAC. 549.

IN CRILLY V. BOARD OF EDUCATION, 54 ILL.APP. 371, WHERE ONE WHO HAD SUBMITTED A PROPOSAL FOR THE ERECTION OF A BUILDING SOUGHT IN EQUITY TO CORRECT HIS BID AND SECURE THE RETURN OF A DEPOSIT ACCOMPANYING THE SAME, ON THE GROUND THAT, BY A CLERICAL MISTAKE, HIS BID WAS $3,000 LESS THAN HE INTENDED IT TO BE, IT WAS HELD THAT THE RELIEF WOULD NOT BE GRANTED, AS THE COMPLAINANT, IF A MISTAKE HAD BEEN MADE, MIGHT EASILY HAVE AVOIDED THE ERROR BY THE EXERCISE OF ORDINARY CARE AND DILIGENCE, AND THEREFORE THE MISTAKE WAS NOT SUCH AS WOULD ENTITLE HIM TO RELIEF IN EQUITY.

IN BROWN V. LEVY, 29 TEX.CIV.APP. 389, 69 S.W. 255, THE COURT DENIED THE RIGHT OF A BIDDER TO RECOVER THE DEPOSIT WHICH ACCOMPANIED THE BID WHERE THE GROUND ASSIGNED BY THE BIDDER FOR RECOVERY WAS THAT IN OFFERING TO BUILD A HOUSE FOR A SPECIFIED SUM THE BIDDER HAD MADE AN ERROR OF $10,000 THROUGH MISCALCULATION IN FORMING THE PRELIMINARY ESTIMATES.

IN BALTIMORE V. J. L. ROBINSON CONSTRUCTION CO., 123 MD. 660, 91 ATL. 682, L.R.A. 1915 A 255, INVOLVING THE CONSTRUCTION OF A SCHOOLHOUSE, THE COMPLAINANT BIDDER ASCERTAINED THE BIDS OF HIS COMPETITORS JUST BEFORE THE OPENING AND THEN FOUND THAT IN MAKING UP THE GENERAL TABULATIONS OF THE COSTS OF THE VARIOUS ITEMS, INCLUDING THE BIDS OF SUBCONTRACTORS, THE AMOUNT FOR HEATING AND VENTILATING HAD BEEN PUT DOWN IN HIS BID AT $952.13, WHILE IT SHOULD HAVE BEEN $11,952.13, THE AMOUNT OF THE SUBCONTRACTOR'S BID, THUS MAKING THE TOTAL OF THE BID $11,000 LESS THAN HAD BEEN INTENDED. THE BID OF THE COMPLAINANT, WITH THIS ERROR, WAS $14,000 LOWER THAN THE BID OF ANY OTHER BIDDER AND THE BOARD OF MUNICIPAL OFFICERS HAVING REFUSED TO PERMIT THE BID TO BE WITHDRAWN AND AWARDED THE CONTRACT TO IT, THE COMPLAINANT REFUSED TO EXECUTE THE CONTRACT AND BROUGHT AN ACTION AT LAW FOR RECOVERY OF THE DEPOSIT WHICH ACCOMPANIED THE BID. THE COURT GAVE JUDGMENT AGAINST THE COMPLAINANT, HOLDING IT WAS NOT ENTITLED TO A RETURN OF THE DEPOSIT, AND CITED IN SUPPORT OF ITS JUDGMENT ROBINSON V. BOARD OF EDUCATION, 98 ILL.APP. 100; MORGAN PARK V. CAHAN, 136 ILL. 523, 26 N.E. 1085; TURNER V. FREMONT, 95 C.C.A. 455, 170 FED. 259; DAVIS V. SYRACUSE, 69 MISC. 285, 126 N.Y.SUPP. 1002; WHEATON BLDG. AND LUMBER CO. V. BOSTON, 204 MASS. 218, 90 N.E. 598; 26 CYC. 661; AND MCQUILLIN ON MUNICIPAL CORPORATIONS, SECS. 1221, 1222, VOL. 3. EXPLAINING ITS JUDGMENT THE MARYLAND COURT SAID:

WHILE IT MAY APPEAR A HARDSHIP UPON THE BIDDER, THE PRACTICAL SIDE, AS ILLUSTRATED BY THIS RECORD OF AWARDING CONTRACTS BY CLOSED BIDDING, SHOWS IT TO BE A WISE PROVISION * * *. AFTER THE BIDS WERE ALL IN, AND BEFORE THE BIDS WERE OPENED, THIS APPELLEE EASILY ASCERTAINED FROM HIS COMPETITORS THE AMOUNTS OF THEIR BIDS. WHAT WOULD THERE BE TO PREVENT A DISHONEST BIDDER, UPON FINDING THAT HIS BID WAS EXTREMELY LOW, FROM DECLARING THAT HE HAD MADE A MISTAKE, AND THUS PUT THE CITY TO THE COSTS OF DELAY AND READVERTISING.

IN SCOTT V. UNITED STATES, 44 CT.CLS. 525, THE PLAINTIFF BIDDER ON THE NEXT DAY AFTER THE OPENING OF BIDS HAD SOUGHT TO WITHDRAW ITS HIGH BID FOR LEASING GOVERNMENT LAND AND TO HAVE THE RETURN OF ITS BID DEPOSIT STATING THAT A MISTAKE HAD BEEN MADE IN THAT IT HAD INTENDED TO BID 3 1/4 CENTS PER ACRE INSTEAD OF 5 1/4 CENTS PER ACRE MENTIONED IN ITS BID. IT REFUSED TO PERFORM IN ACCORDANCE WITH ITS BID AND BROUGHT A SUIT FOR RECOVERY OF ITS BID DEPOSIT. THE COURT OF CLAIMS DISMISSED THE SUIT SAYING THAT IT WOULD BE AN EASY MATTER FOR A BIDDER TO SHUN RESPONSIBILITY, IF HE HAS UNDERESTIMATED OR OVERESTIMATED IN HIS PROPOSAL, PROVIDED HE IS ALLOWED TO WITHDRAW HIS BID AND WITH IT RECOVER THE AMOUNT OF HIS DEPOSIT. THE COURT SAID ALSO THAT OFFICERS OF THE GOVERNMENT HAVE NO DISCRETION, THAT IN MAKING PURCHASES AND SALES THEY MUST ACCEPT THE HIGHEST OR THE LOWEST RESPONSIBLE BID OR REJECT ALL AND READVERTISE AND THAT THEY ARE ENTITLED TO A REASONABLE TIME AFTER THE OPENING OF BIDS BEFORE THE BIDS ARE ALLOWED TO BE WITHDRAWN, CITING IN THAT CONNECTION HALDANE V. UNITED STATES, 69 FED. 819, AND OTHER RESPECTABLE PRECEDENTS. SEE ALSO 17 OP.ATTY.GEN. 70.

IN 15 COMP. GEN. 1049, THE FORMER COMPTROLLER GENERAL PASSED UPON AN APPLICATION WHERE THE BID DEPOSIT WAS $27,000 AND THE BIDDER SOUGHT WITHDRAWAL OR REFORMATION ON THE GROUND OF AN ALLEGED MISTAKE IN ITS PRELIMINARY ESTIMATES AMOUNTING TO $140,000. HAD THIS SUM BEEN INCLUDED THE SAID BIDDER NEVERTHELESS WOULD HAVE BEEN ENTITLED TO AWARD AS THE LOWEST RESPONSIBLE BIDDER. THE DECISION WAS THAT THERE WAS NO AUTHORITY FOR PAYMENT OF MORE THAN THE BID PRICE AND THAT THE BIDDER WAS OBLIGATED TO PERFORM ON THE BASIS OF AN AWARD MADE AFTER THE BIDDER HAD CLAIMED THE MISTAKE. THE BIDDER IN THAT CASE APPARENTLY ELECTED TO PERFORM RATHER THAN FORFEIT THE $27,000 BID DEPOSIT, IT NOT APPEARING IT WOULD SUFFER ANY NET LOSS IN PERFORMING THE CONTRACT.

THE DECISION IN THE PRESENT CASE MUST BE THAT NO PAYMENT TO THE O. D. WILSON CO., INC., IS AUTHORIZED IN EXCESS OF ITS BID PRICE AND IF IT REFUSES TO PERFORM IN ACCORDANCE WITH ITS BID THE BID GUARANTEE IS FORFEITED, AND THE MATTER THEN APPARENTLY WILL BE FOR READVERTISING OR AWARDING TO THE NEXT LOWEST RESPONSIBLE BIDDER AS THE PUBLIC INTERESTS MAY REQUIRE.