A-93943, APRIL 12, 1938, 17 COMP. GEN. 834

A-93943: Apr 12, 1938

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

THE ELECTION WAIVED ANY RIGHT IT MAY HAVE HAD TO WITHDRAW THE BID OR TO REFUSE TO PERFORM AT THE BID PRICE. THE FORMS WERE FURNISHED UNDER AN UNNUMBERED CONTRACT DATED NOVEMBER 9. IT APPEARS THAT BIDS WERE OPENED ON OCTOBER 26. WAS THE LOWEST RECEIVED. YOU WERE INFORMED BY THE SOCIAL SECURITY BOARD THAT IF YOU REFUSED TO ACCEPT AND PERFORM THE CONTRACT IN ACCORDANCE WITH YOUR BID YOU WOULD BE CHARGED WITH ANY EXCESS COSTS INCURRED BY THE GOVERNMENT AS A RESULT OF YOUR DEFAULT. RATHER THAN HAVE THIS WORK DONE BY OTHERS. IF YOU WILL SEND US THE NECESSARY ORDER TO PROCEED WITH THIS WORK WE SHALL BE HAPPY TO PRODUCE IT FOR YOU AND WILL GUARANTEE THAT IT WILL BE A VERY GOOD JOB IN EVERY RESPECT AS WE ARE AN OLD ESTABLISHED FIRM HAVING BEEN IN BUSINESS FOR 50 YEARS.

A-93943, APRIL 12, 1938, 17 COMP. GEN. 834

CONTRACTS - MISTAKES - BIDS - WAIVER BY ELECTION TO PERFORM WHERE A BIDDER ALLEGED ERROR IN ITS BID, AFTER THE OPENING OF BIDS BUT PRIOR TO AWARD, BUT ELECTED TO ABIDE BY ITS TERMS AFTER NOTIFICATION BY THE ADMINISTRATIVE OFFICE INVOLVED THAT IN THE EVENT OF REFUSAL TO ACCEPT AND PERFORM THE CONTRACT, IT WOULD BE CHARGED WITH ANY EXCESS COSTS INCURRED BY THE GOVERNMENT AS A RESULT OF THE DEFAULT, THE ELECTION WAIVED ANY RIGHT IT MAY HAVE HAD TO WITHDRAW THE BID OR TO REFUSE TO PERFORM AT THE BID PRICE, AND THE CONTRACT HAVING BEEN PERFORMED AND PAYMENT MADE AT THE ACCEPTED BID PRICE, NO FURTHER PAYMENT MAY BE MADE.

ACTING COMPTROLLER GENERAL ELLIOTT TO PHILIP HANO CO., INC., APRIL 12, 1938:

YOUR LETTER OF MARCH 11, 1938, REQUESTS REVIEW OF SETTLEMENT NO. 0485670, DATED FEBRUARY 11, 1938, WHICH DISALLOWED THE SUM OF $60.75 CLAIMED TO BE DUE BECAUSE OF AN ALLEGED ERROR IN BID FOR FURNISHING TELEGRAM FORMS TO THE SOCIAL SECURITY BOARD. THE FORMS WERE FURNISHED UNDER AN UNNUMBERED CONTRACT DATED NOVEMBER 9, 1937.

IT APPEARS THAT BIDS WERE OPENED ON OCTOBER 26, 1937, FOR FURNISHING 5,000 SETS OF TELEGRAM FORM G-504 TO THE SOCIAL SECURITY BOARD AND THAT YOUR BID OF $105 FOR DELIVERY F.O.B. HOLYOKE, MASS., WAS THE LOWEST RECEIVED. IN LETTER OF NOVEMBER 2, 1937, YOU NOTIFIED THE SOCIAL SECURITY BOARD THAT YOU HAD MADE AN ERROR IN THE PREPARATION OF YOUR BID IN THAT YOU FAILED TO INCLUDE THE COST OF THE CARBON PAPER INVOLVED, AND YOU REQUESTED THAT YOU BE PERMITTED TO WITHDRAW YOUR BID. IN LETTER OF NOVEMBER 4, 1937, YOU WERE INFORMED BY THE SOCIAL SECURITY BOARD THAT IF YOU REFUSED TO ACCEPT AND PERFORM THE CONTRACT IN ACCORDANCE WITH YOUR BID YOU WOULD BE CHARGED WITH ANY EXCESS COSTS INCURRED BY THE GOVERNMENT AS A RESULT OF YOUR DEFAULT, BUT THAT IN THE EVENT YOU ACCEPTED THE CONTRACT YOU COULD SUBSEQUENTLY FILE CLAIM FOR ADDITIONAL COMPENSATION. BY LETTER OF NOVEMBER 6, 1937, YOU REPLIED, IN PART, AS FOLLOWS:

WITH REFERENCE TO YOUR LETTER OF NOVEMBER 4TH, AND OUR LETTER OF NOVEMBER 2ND ASKING FOR PERMISSION TO WITHDRAW OUR BID, WE HEREBY AGREE TO GO AHEAD WITH THE ORDER IF RECEIVED AS ORIGINALLY BID, INASMUCH AS IT SEEMS TO CAUSE INCONVENIENCE ON YOUR PART TO RELEASE US.

WHILE WE ACKNOWLEDGE AN ERROR IN SUBMITTING THE BID, RATHER THAN HAVE THIS WORK DONE BY OTHERS, WE WOULD PREFER TO GO AHEAD AND DO IT OURSELVES AND ABSORB OUR OWN LOSS.

IF YOU WILL SEND US THE NECESSARY ORDER TO PROCEED WITH THIS WORK WE SHALL BE HAPPY TO PRODUCE IT FOR YOU AND WILL GUARANTEE THAT IT WILL BE A VERY GOOD JOB IN EVERY RESPECT AS WE ARE AN OLD ESTABLISHED FIRM HAVING BEEN IN BUSINESS FOR 50 YEARS, AND WHILE WE ALL MAKE MISTAKES WE ARE PERFECTLY WILLING TO SUFFER THE LOSS WITH THE HOPE THAT IN THE FUTURE WE CAN SERVE YOU ON YOUR VARIOUS NEEDS.

YOUR BID WAS ACCORDINGLY ACCEPTED ON NOVEMBER 9, 1937, THE CONTRACT HAS BEEN PERFORMED AND YOU HAVE BEEN PAID THE CONTRACT PRICE FOR THE FORMS FURNISHED.

THE ELECTION ON YOUR PART--- LETTER OF NOVEMBER 6, 1937, SUPRA--- TO ABIDE BY THE TERMS OF THE BID WAIVED ANY RIGHT YOU MAY HAVE HAD TO WITHDRAW THE BID OR TO REFUSE TO PERFORM AT THE BID PRICE. THE CONTRACT WAS FREELY EXECUTED AND WAS ENTERED INTO AND ACCEPTED BY YOU WITH FULL KNOWLEDGE OF ALL THE FACTS. HAVING AGREED TO ACCEPT AND PERFORM THE CONTRACT IN ACCORDANCE WITH YOUR BID YOU ARE NOT ENTITLED TO COMPENSATION ADDITIONAL TO THAT SPECIFIED IN THE CONTRACT. SEE IN THIS CONNECTION AMERICAN WATER SOFTENER COMPANY V. UNITED STATES, 50 CT.CLS. 209; PERRYMAN-BURNS COAL CO. V. UNITED STATES, 84 CT.CLS. 567.

THE SITUATION HERE IS UNLIKE THAT CONSIDERED IN MY LETTER OF NOVEMBER 26, 1937, A-90154, TO THE SECRETARY OF THE TREASURY. IN THAT CASE YOU REFUSED TO ACCEPT AND PERFORM THE CONTRACT BASED ON YOUR ERRONEOUS BID, AND THIS OFFICE PROPERLY CONCLUDED THAT YOU WERE NOT CHARGEABLE WITH EXCESS COSTS INCURRED BY THE GOVERNMENT AS A RESULT OF YOUR ACTION. IN THIS CONNECTION SEE 17 COMP. GEN. 452, 454.