B-104883, NOV 7, 1951

B-104883: Nov 7, 1951

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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 24. BY WHICH THERE WAS FORWARDED WITH A REQUEST FOR A REPORT A LETTER DATED JULY 23. RELATIVE TO AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE ON ITEM NO. 4 OF ITS BID UPON WHICH CONTRACT NO. IS BASED. ARE SUBJECT TO INCREASES THAT MAY BE EFFECTED PRIOR TO DATE OF SHIPMENT.". THE ABOVE-CITED CONTRACT WAS NEGOTIATED WITH THE CORPORATION ON THE BASIS OF ITS MODIFIED BID UNDER SECTION 2(C)(1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947. THE CORPORATION ADVISED THAT THROUGH ERROR ON ITS PART THE PRICE PER FOOT QUOTED ON ITEM NO. 4 WAS TAKEN FROM THE PRICE SHEET APPLICABLE TO TYPE 304 TUBING INSTEAD OF TYPE 347.

B-104883, NOV 7, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 24, 1951, WITH ENCLOSURES, FROM THE OFFICE OF THE DIRECTOR OF FINANCE, REPLYING TO OFFICE LETTER OF AUGUST 7, 1951, BY WHICH THERE WAS FORWARDED WITH A REQUEST FOR A REPORT A LETTER DATED JULY 23, 1951, WITH ENCLOSURES, FROM PERRY KILSBY, INC., LOS ANGELES, CALIFORNIA, RELATIVE TO AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE ON ITEM NO. 4 OF ITS BID UPON WHICH CONTRACT NO. AF 04(171)-921, DATED FEBRUARY 9, 1951, IS BASED.

THE SACRAMENTO AIR MATERIEL AREA, MCCLELLAN AIR FORCE BASE, MCCLELLAN, CALIFORNIA, BY INVITATION DATED JANUARY 13, 1951, REQUESTED BIDS - TO BE OPENED JANUARY 30, 1951 - FOR FURNISHING VARIOUS ITEMS OF SUPPLIES. RESPONSE THERETO, PERRY KILSBY, INC., SUBMITTED A BID, DATED JANUARY 29, 1951, IN WHICH IT OFFERED TO FURNISH, AMONG OTHER ITEMS, 2,000 FEET OF "STEEL CHROME NICKEL CORROSION RESISTING ROUND SEAMLESS ANNEALED TUBING 3- 8" OD X .035" WALL SPEC AN-WW-T-858," ITEM NO. 4 AT $.5408 PER FOOT, A TOTAL BID OF $1,081.60 SUBJECT TO THE FOLLOWING CLAUSE:

"BECAUSE OF PRESENT UNCERTAIN CONDITIONS AFFECTING COSTS OF RAW MATERIALS AND LABOR, PRICES QUOTED OR NAMED IN ORDERS ACCEPTED, ARE SUBJECT TO INCREASES THAT MAY BE EFFECTED PRIOR TO DATE OF SHIPMENT."

UPON BEING REQUESTED TO SUBMIT A FIRM PRICE OR A PRICE PLUS 20 PERCENT MAXIMUM ESCALATION, PERRY KILSBY, INC., ADVISED BY TELEGRAM DATED FEBRUARY 6, 1951, AS FOLLOWS:

"*** QUOTE HEREBY AMENDED PRICES PLUS 20 PERCENT MAXIMUM ESCALATION."

THE ABOVE-CITED CONTRACT WAS NEGOTIATED WITH THE CORPORATION ON THE BASIS OF ITS MODIFIED BID UNDER SECTION 2(C)(1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947, 62 STAT. 21. IN A LETTER DATED JULY 23, 1951, ADDRESSED TO THE COMPTROLLER GENERAL, THE CORPORATION ADVISED THAT THROUGH ERROR ON ITS PART THE PRICE PER FOOT QUOTED ON ITEM NO. 4 WAS TAKEN FROM THE PRICE SHEET APPLICABLE TO TYPE 304 TUBING INSTEAD OF TYPE 347. THE CORPORATION STATED THEREIN THAT ITS BID PRICE ON TYPE 347 TUBING SHOULD BE $0.6627 PER FOOT AND, IN SUBSTANTIATION THEREOF, FORWARDED TWO PRICE LISTS DATED DECEMBER 15, 1950. SAID PRICE LISTS SHOW A PRICE OF $0.5408 PER FOOT FOR TYPE 304, INDICATED TO COMPLY WITH SPECIFICATION AN-WW-T-855, AND A PRICE OF $0.6627 PER FOOT FOR TYPES 321 OR 347, INDICATED TO COMPLY WITH SPECIFICATION AN-WW-T-858.

THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CONTRACTOR MADE AN ERROR IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. IN FIRST INDORSEMENT DATED AUGUST 29, 1951, THE CONTRACTING OFFICER STATES, IN PERTINENT PART, AS FOLLOWS:

"3. THERE IS NO RECORD IN THIS OFFICE OF CORRESPONDENCE RECEIVED OR WRITTEN REGARDING THE DISCREPANCY IN THE PRICE, HOWEVER, THE DISCREPANCY WAS DISCUSSED BY TELEPHONE AND THE CONTRACTOR WAS ADVISED OF HIS RIGHT TO FILE CLAIM FOR RELIEF.

"4. THE CONTRACTING OFFICER DID NOT HAVE REASON TO SUSPECT AN ERROR IN THE BID PRIOR TO AWARD."

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS RECEIVED IN THE ITEM HERE INVOLVED WERE $0.6627 AND $0.7221 PER FOOT. THE DIFFERENCE BETWEEN THE CORPORATION'S BID OF $0.5408 PER FOOT AND THE TWO OTHER BIDS IS NOT SO GREAT AS TO WARRANT THE CONCLUSION - CONTRARY TO THE ABOVE - QUOTED STATEMENT - THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF AN ERROR IN THE BID. ALSO, THERE WAS NOTHING IN THE FACE OF THE CORPORATION'S BID TO INDICATE THAT IT WAS NOT AS INTENDED. ALTHOUGH, AFTER AWARD, THE CORPORATION FURNISHED ITS PRICE LISTS IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER WAS AWARE OF THE FACTORS USED BY THE CORPORATION IN COMPUTING ITS BID PRICE ON THE ARTICLE INVOLVED. THUS, SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE CONTRACTOR'S BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID OF JANUARY 29, 1951, AS MODIFIED BY THE CORPORATION'S MESSAGE OF FEBRUARY 6, 1951, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION AND SUBMISSION OF A BID IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C. CLS. 120, 163. IF, AS ALLEGED IN ITS LETTER OF JULY 23, 1951, THE CONTRACTOR INADVERTENTLY QUOTED A PRICE APPLICABLE TO A TYPE OF TUBING OTHER THAN THE TUBING SPECIFIED IN THE INVITATION, SUCH ERROR WAS DUE SOLELY TO THE LACK OF PROPER CARE ON THE PART OF THE BIDDER AND NOT TO ANY FAILURE OF THE GOVERNMENT TO FURNISH SUFFICIENT INFORMATION AS TO THE TYPE OF TUBING REQUIRED. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. SUCH ERROR AS WAS MADE IN THE BID WAS UNILATERAL - NOT MUTUAL - AND, THEREFORE, DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505, 507; AND OGDEN & DOUGHERTY V. UNITED STATES, 102 C. CLS. 249, 259.

ACCORDINGLY, ON THE FACTS OF RECORD, THERE APPEARS NO LEGAL BASIS FOR AUTHORIZING PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN EXCESS OF THE PRICE SPECIFIED IN ITS BID, AS AMENDED, WHICH WAS ACCEPTED, FOR THE TUBING FURNISHED UNDER ITEM NO. 4 OF THE CONTRACT.