B-112284, FEB 5, 1953

B-112284: Feb 5, 1953

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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED JANUARY 28. WITH WHICH THERE WAS FORWARDED FOR A REPORT A LETTER DATED OCTOBER 1. IS BASED. WHEREIN A UNIT PRICE OF $370 EACH AND A TOTAL BID OF $740 WAS QUOTED FOR TWO PORTABLE ARC WELDERS TO BE FURNISHED IN ACCORDANCE WITH SPECIFICATIONS (ITEM NO. 3). THE CORPORATION ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM NO. 3 IN THAT THE PRICE QUOTED THEREON WAS ERRONEOUSLY BASED ON ITS SUPPLIER'S OBSOLETE PRICE LIST WHICH WAS NO LONGER IN EFFECT AFTER NOVEMBER 30. THAT THE CORRECT BID PRICE FOR THE TWO WELDERS INVOLVED BASED ON ITS SUPPLIER'S CURRENT APPLICABLE PRICES WHICH HAVE BEEN EFFECTIVE SINCE NOVEMBER 30.

B-112284, FEB 5, 1953

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JANUARY 28, 1953, WITH ENCLOSURES, FROM THE DIRECTOR OF FINANCE, REPLYING TO A LETTER OF OCTOBER 27, 1952, WITH WHICH THERE WAS FORWARDED FOR A REPORT A LETTER DATED OCTOBER 1, 1952, WHEREIN HOLLEY-EDWARDS SALES, INC., ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT (PURCHASE ORDER NO. (09-607) 52-3676) DATED JUNE 23, 1952, IS BASED.

THE CONTRACT WHICH CALLED FOR THREE ITEMS OF SUPPLIES AT A TOTAL CONTRACT PRICE OF $896, RESULTED FROM THE ACCEPTANCE OF THE AFORE NAMED CORPORATION'S BID OF JUNE 20, 1952, WHEREIN A UNIT PRICE OF $370 EACH AND A TOTAL BID OF $740 WAS QUOTED FOR TWO PORTABLE ARC WELDERS TO BE FURNISHED IN ACCORDANCE WITH SPECIFICATIONS (ITEM NO. 3).

BY LETTER DATED AUGUST 28, 1952, THE CORPORATION ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM NO. 3 IN THAT THE PRICE QUOTED THEREON WAS ERRONEOUSLY BASED ON ITS SUPPLIER'S OBSOLETE PRICE LIST WHICH WAS NO LONGER IN EFFECT AFTER NOVEMBER 30, 1950, AND THAT THE CORRECT BID PRICE FOR THE TWO WELDERS INVOLVED BASED ON ITS SUPPLIER'S CURRENT APPLICABLE PRICES WHICH HAVE BEEN EFFECTIVE SINCE NOVEMBER 30, 1950, SHOULD BE $440 EACH, A TOTAL PRICE OF $880, FOR THE ITEM, AND, THEREFORE, A CHANGE IN THE CONTRACT PRICE TO PROVIDE ACCORDINGLY WAS REQUESTED.

THE RECORD SHOWS THAT DELIVERY OF THE WELDERS UNDER ITEM NO. 3 WAS COMPLETED ON SEPTEMBER 10, 1952, AND THAT THE CONTRACTING OFFICER, BY LETTER DATED SEPTEMBER 24, 1952, INFORMED THE CORPORATION THAT HE WAS WITHOUT AUTHORITY TO EFFECT THE REQUESTED CHANGE IN THE CONTRACT PRICE. FINAL PAYMENT FOR THE CONTRACT MATERIAL, INCLUDING ITEM NO. 3, AT THE CONTRACT PRICE, WAS MADE ON OCTOBER 3, 1952.

THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CORPORATION MADE AN ERROR IN THE PREPARATION OF ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. NO ERROR IS APPARENT ON THE FACE OF THE BID OF THE CONTRACTOR. THE EVIDENCE FURNISHED OF RECORD IN THIS CASE IS INSUFFICIENT TO WARRANT THE CONCLUSION THAT THE CONTRACTING OFFICER HAD ANY REASON TO SUSPECT ERROR IN THE CORPORATION'S BID ON ITEM NO. 3. ALTHOUGH, THE CONTRACTOR, BY ITS REFERRED-TO LETTER DATED MORE THAN SIXTY DAYS AFTER AWARD ALLEGED THAT IT HAD MADE AN ERROR ON ITEM NO. 3 OF ITS BID AND, SUBSEQUENTLY, BY LETTER OF OCTOBER 31, 1952, FURNISHED CERTAIN DATA INCLUDING SHEET NO. 705.02(1) FROM A LOOSE-LEAF PRINTED WELDER PRICE BOOK OF THE HARNISCHFEGER CORPORATION, MILWAUKEE, WISCONSIN, EFFECTIVE AUGUST 1, 1952, AND REPLACING THE PRICE LIST EFFECTIVE NOVEMBER 30, 1950, IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER WAS AWARE OF THE FACTORS, SUCH AS THE SUPPLIER'S OBSOLETE PRICE LIST, USED BY THE CORPORATION IN COMPUTING ITS BID PRICE. 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, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE RESPONSIBILITY FOR THE PREPARATION AND SUBMISSION OF THE BID WAS UPON THE CORPORATION. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C. CLS. 120, 163. IT APPEARS THERE WAS NO MISUNDERSTANDING OR DOUBT ON THE BIDDER'S PART WITH RESPECT TO THE NEEDS OF THE GOVERNMENT AS CALLED FOR UNDER ITEM NO. 3. CONSEQUENTLY, IF THE CORPORATION MADE AN ERROR IN QUOTING A PRICE ON ITEM NO. 3 BY COMPUTING ITS BID THEREON BASED ON ITS SUPPLIER'S OBSOLETE PRICE LIST, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE, OR OVERSIGHT, AND WAS INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. SUCH ERROR WAS UNILATERAL - NOT MUTUAL - AND THEREFORE DOES NOT ENTITLE THE CORPORATION 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, IN VIEW OF THE FACTS OF RECORD, THERE APPEARS NO LEGAL BASIS FOR AUTHORIZING PAYMENT TO HOLLEY-EDWARDS SALES, INC., FOR THE WELDERS FURNISHED UNDER ITEM NO. 3, OF ANY AMOUNT IN ADDITION TO THE PRICE SPECIFIED THEREFOR IN THE CONTRACT.