B-107357, FEBRUARY 12, 1952, 31 COMP. GEN. 384

B-107357, FEBRUARY 12, 1952, 31 COMP. GEN. 384

CONTRACTS - ENFORCEMENT - EXECUTION OF CONTRACT AFTER ALLEGATION OF ERROR A CONTRACT FOR CONSTRUCTION OF A STORAGE BUILDING, EXECUTED BY A CONTRACTOR AFTER THE ALLEGED ERROR IN A BID NOT OUT OF LINE WITH OTHER BIDS, UNDER WHICH THE CONTRACTOR UNEQUIVOCALLY AGREED TO FURNISH THE MATERIALS AND PERFORM THE WORK FOR THE PRICE QUOTED THEREIN IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES AND THE CONTRACT MAY NOT BE MODIFIED ON THE BASIS OF THE ALLEGED ERROR TO PROVIDE FOR AN INCREASE IN THE CONTRACT PRICE.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE ARMY, FEBRUARY 12, 1952:

REFERENCE IS MADE TO THE 13TH ENDORSEMENT OF DECEMBER 7, 1951, FROM THE CHIEF OF FINANCE, FORWARDING TO THE CLAIMS DIVISION, GENERAL ACCOUNTING OFFICE, FOR SETTLEMENT AS A CLAIM, THE PAPERS RELATIVE TO AN ERROR ALLEGED BY HULING AND SON, BUILDERS, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA-35-047-NG-50, DATED MAY 31, 1951, WAS AWARDED. SINCE IT APPEARS THAT FINAL PAYMENT UNDER THE CONTRACT HAS NOT BEEN MADE, THE MATTER WILL BE DISPOSED OF BY DECISION RATHER THAN BY CLAIM SETTLEMENT.

BY INVITATION NO. DA-35-047-NG-50, DATED APRIL 2, 1951, AS MODIFIED BY ADDENDUM NO. 1, DATED MAY 3, 1951 AND ADDENDUM NO. 2, DATED MAY 8, 1951, THE UNITED STATES PROPERTY AND DISBURSING OFFICER, OREGON NATIONAL GUARD, SALEM, OREGON, REQUESTED BIDS--- TO BE OPENED MAY 28, 1951--- FOR FURNISHING MATERIALS AND PERFORMING THE WORK FOR CONSTRUCTION OF A MOTOR VEHICLE STORAGE BUILDING IN ACCORDANCE WITH SPECIFICATIONS AND DRAWINGS REFERRED TO THEREIN. IN RESPONSE TO THE INVITATION, HULING AND SON, BUILDERS, SUBMITTED A BID OFFERING TO FURNISH THE MATERIALS AND PERFORM THE WORK FOR THE PRICE OF $29,536. THE ABSTRACT OF BIDS SHOWS THAT OTHER BASIC BID PRICES WERE $33,454, $36,947, $37,870, $46,980 AND $49,889.

IN THE 4TH ENDORSEMENT OF AUGUST 29, 1951, THE CONTRACTING OFFICER REPORTED THAT AWARD WAS MADE TO HULING AND SON, BUILDERS, AT 8 A.M. MAY 31, 1951; THAT AT 8:25 A.M. ON THE SAME DATE THE COMPANY WAS ADVISED BY TELEPHONE OF THE AWARD; THAT DURING SUCH TELEPHONE CONVERSATION MR. HULING, SR., ADVISED THAT AN ERROR OF APPROXIMATELY $3,000 HAD BEEN MADE IN THE COMPANY'S BID PRICE AND REQUESTED INFORMATION AS TO STEPS NECESSARY TO EFFECT A CORRECTION OF THE BID PRICE; AND THAT THE BIDDER WAS ADVISED THAT IT COULD PRESENT A CLAIM TO THE GOVERNMENT TO HAVE THE CONTRACT PRICE INCREASED TO COVER THE ERROR. WITH A LETTER DATED MAY 31, 1951, COPIES OF THE CONTRACT DRAWN IN ACCORDANCE WITH THE COMPANY'S BID, TOGETHER WITH PERFORMANCE AND PAYMENT BONDS, WERE FORWARDED TO THE COMPANY FOR EXECUTION. THERE WAS NO STATEMENT IN SAID LETTER WITH RESPECT TO ANY ADJUSTMENT TO BE MADE IN THE CONTRACT PRICE.

THE FORMAL CONTRACT PROVIDING FOR PAYMENT FOR THE WORK AT THE PRICE BID, WAS EXECUTED BY THE COMPANY AND RETURNED WITH A LETTER OF JUNE 2, 1951, IN WHICH THE COMPANY STATED THAT AN ERROR HAD BEEN MADE IN ITS BID DUE TO ITS FAILURE TO INCLUDE THEREIN THE PRICE FOR THE CONCRETE FLOOR, EXPANSION STRIPS AND WATERPROOF PAPER STATED TO AMOUNT TO $2,980. THE COMPANY STATED THEREIN THAT IT EXPECTED TO PERFORM THE WORK BUT THAT AN ADJUSTMENT IN THE CONTRACT PRICE WAS DESIRED. BY LETTER OF JULY 2, 1951, THE COMPANY SUBMITTED, IN SUPPORT OF ITS ALLEGATION OF ERROR, PHOTOSTATIC COPIES OF THE WORK SHEETS STATED TO HAVE BEEN USED IN COMPUTING ITS BID PRICE.

THE RECORD INDICATES THAT NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THAT SUCH ALLEGATION WAS MADE VERBALLY AND WAS NOT SUPPORTED BY EVIDENCE. HOWEVER, IN ANY EVENT, AFTER ALLEGING ERROR IN ITS BID, HULING AND SON, BUILDERS, EXECUTED CONTRACT NO. DA-35-047-NG-50 UNDER WHICH IT UNEQUIVOCALLY AGREED TO FURNISH THE MATERIALS AND PERFORM THE WORK SPECIFIED THEREIN FOR THE CONSIDERATION QUOTED IN ITS BID. SUCH CONTRACT IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168, 173, AND SIMPSON V. UNITED STATES, 172 U.S. 372.

IN THE CASE OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C. CLS. 699, CERTIORARI DENIED 325 U.S. 866, THE PLAINTIFF SOUGHT TO RECOVER $88,000 ALLEGING THAT IT OMITTED AN ITEM OF THAT AMOUNT IN PREPARING ITS BID. THE COURT, IN DENYING RECOVERY OF THE AMOUNT OF THE ALLEGED MISTAKE, STATED (PAGE 717/---

AT THE TIME THE CONTRACT WAS AWARDED TO THE PLAINTIFF, PURSUANT TO ITS BID, AND AT THE TIME IT SIGNED THE CONTRACT, THE PLAINTIFF WAS NOT MISTAKEN. IT HAD BECOME AWARE OF THE MISTAKE IN ITS BID, AND FACED THE PROBLEM OF WHETHER IT WAS WILLING TO SIGN A CONTRACT FOR THE FIGURE WHICH IT HAD, BY MISTAKE SINCE DISCOVERED, BID. THE GOVERNMENT WAS ALSO AWARE OF THE PLAINTIFF'S CLAIM THAT IT HAD MADE A MISTAKE IN THE BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED EITHER OF THEM TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THAT BEING SO, IF WE SHOULD REFORM THE CONTRACT AS THE PLAINTIFF REQUESTS, WE WOULD BE MAKING FOR THE PARTIES THE VERY CONTRACT WHICH ONE OF THEM, THE GOVERNMENT, EXPRESSLY REFUSED TO MAKE AT THAT TIME, THOUGH REQUESTED TO DO SO BY THE PLAINTIFF. ALSO, SEE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INC., 133 F.2D 399; 20 COMP. GEN. 652; 23 ID. 596; 25 ID. 536; AND 26 ID. 426. THE ENFORCEMENT OF THE CONTRACT AT THE PRICE SPECIFIED THEREIN--- WHICH PRICE IS NOT OUT OF LINE WITH THE OTHER BID--- DOES NOT APPEAR TO BE UNCONSCIONABLE.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON THE COMPANY. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.1CLS. 120, 163. SUCH ERROR AS WAS MADE IN THE BID WAS DUE SOLELY TO THE NEGLIGENCE OF THE COMPANY AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.1CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.1SUPP. 505, 507.

ACCORDINGLY, I FIND NO LEGAL BASIS FOR MODIFYING CONTRACT NO. DA-35 047- NG-50 TO PROVIDE FOR AN INCREASE OF $2,980 IN THE CONSIDERATION, AS REQUESTED BY THE CONTRACTOR.