B-113990, JUN 24, 1953

B-113990: Jun 24, 1953

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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER OF JUNE 12. WITH WHICH WAS FORWARDED FOR REPORT A LETTER OF FEBRUARY 21. MISCELLANEOUS ITEMS 'WHERE IS'". THE COMPANY'S BID WAS ACCEPTED AS TO ITEM 48. THE COMPANY WAS NOTIFIED OF THE AWARD BY LETTER OF FEBRUARY 13. HUDSON TIRE COMPANY INSPECTED THE SALVAGE MATERIAL COVERED BY ITEM 48 AND ON THE SAME DATE ALLEGED THAT THE PRICE QUOTED ON ITEM 48 WAS INTENDED AS THE BID PRICE ON ITEM 49. THAT NO BID WAS INTENDED TO BE MADE ON ITEM 48. ASSERTING THAT THE SALVAGE MATERIAL COVERED BY ITEM 48 IS NOT WORTH THE EXPENSE OF REMOVAL FROM THE BASE. ALTHOUGH THE COMPANY'S BID IS HIGHER THAN THE OTHER BID OF $27.75 FOR ITEM 48.

B-113990, JUN 24, 1953

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER OF JUNE 12, 1953, WITH ENCLOSURES, FROM THE DEPUTY DIRECTOR OF FINANCE, DEPARTMENT OF THE AIR FORCE, IN REPLY TO LETTER OF MARCH 6, 1953, WITH WHICH WAS FORWARDED FOR REPORT A LETTER OF FEBRUARY 21, 1953, FROM C.A. HUDSON TIRE COMPANY REQUESTING THAT THIS OFFICE AUTHORIZE A REFUND OF $75.75 REPRESENTING A PART OF THE AMOUNT PAID UNDER SALE CONTRACT NO. (02-604S-53-26 DATED FEBRUARY 9, 1953.

BY INVITATION NO. 02-604-S-53-2, DATED JANUARY 12, 1953, LUKE AIR FORCE BASE, GLENDALE, ARIZONA, REQUESTED BIDS - TO BE OPENED FEBRUARY 2, 1953 - FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS SALVAGE MATERIALS AS DESCRIBED UNDER ITEMS 1 TO 52, AND 54. IN RESPONSE TO THE INVITATION, C.A. HUDSON TIRE COMPANY SUBMITTED A BID IN WHICH IT QUOTED A PRICE OF $75.75 FOR ITEM 48, DESCRIBED AS 10,000 POUNDS OF "RUBBER SCRAP, MISCELLANEOUS ITEMS 'WHERE IS'". THE COMPANY'S BID WAS ACCEPTED AS TO ITEM 48, AND OTHER ITEMS, AS THE HIGHEST BID THEREON, AND THE COMPANY WAS NOTIFIED OF THE AWARD BY LETTER OF FEBRUARY 13, 1953, AND TELEPHONE CONVERSATION OF THE SAME DATE.

IT APPEARS THAT ON FEBRUARY 13, 1953, AFTER RECEIPT OF NOTICE OF THE AWARD, MR. C.A. HUDSON OF C.A. HUDSON TIRE COMPANY INSPECTED THE SALVAGE MATERIAL COVERED BY ITEM 48 AND ON THE SAME DATE ALLEGED THAT THE PRICE QUOTED ON ITEM 48 WAS INTENDED AS THE BID PRICE ON ITEM 49, AND THAT NO BID WAS INTENDED TO BE MADE ON ITEM 48. BY THE REFERRED-TO LETTER OF FEBRUARY 21, 1953, THE COMPANY FORWARDED ITS RETAINED COPY OF THE BID IN SUPPORT OF ITS ALLEGATION, AND, ASSERTING THAT THE SALVAGE MATERIAL COVERED BY ITEM 48 IS NOT WORTH THE EXPENSE OF REMOVAL FROM THE BASE, THE COMPANY REQUESTED THAT THE CONTRACT PRICE FOR SAID ITEM, WHICH THE RECORD SHOWS HAS BEEN PAID, BE REFUNDED.

THE CONTRACTING OFFICER HAS REPORTED THAT HE HAD NO REASON TO SUSPECT ERROR IN THE COMPANY'S BID PRIOR TO THE AWARD. ALTHOUGH THE COMPANY'S BID IS HIGHER THAN THE OTHER BID OF $27.75 FOR ITEM 48, SUCH VARIATION WOULD NOT NECESSARILY INDICATE ERROR SINCE A WIDE RANGE IN PRICES QUOTED ON SALVAGE MATERIALS IS NOT UNUSUAL. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976 AND 28 ID. 550. ALTHOUGH, AFTER AWARD, THE COMPANY FURNISHED THE RETAINED COPY OF ITS BID SHOWING THE PRICE OF $75.75 OPPOSITE ITEM 49 AND NO AMOUNT OPPOSITE ITEM 48, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER WAS AWARE OF THAT CIRCUMSTANCE. THUS, THE RECORD IS NOT SUCH AS TO REQUIRE THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE ALLEGED ERROR IN THE BID OF C.A. HUDSON TIRE COMPANY. UNDER SUCH CIRCUMSTANCES, THE ACCEPTANCE OF THE BID ON ITEM 48 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. THE LAW IS WELL SETTLED THAT ONCE A CONTRACTUAL RIGHT TO DEMAND AND RECEIVE A SPECIFIED AMOUNT IN PAYMENT FOR MATERIALS SOLD UNDER A VALID CONTRACT HAS VESTED IN THE UNITED STATES, THERE EXISTS NO AUTHORITY IN ANY OF ITS OFFICERS OR EMPLOYEES GRATUITOUSLY TO WAIVE OR SURRENDER SUCH RIGHT. SEE PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C. CLS. 327, 335; BAUSCH & LOMB OPTICAL COMPANY V. UNITED STATES, 78 C. CLS. 584, 608, CERTIORARI DENIED 292 U.S. 645; AND UNITED STATES V. AMERICAN SALES CORPORATION, 27 F. 2D 389, AFFIRMED 32 F. 2D 141, CERTIORARI DENIED 280 U.S. 574.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C. CLS. 120, 163. IF C.A. HUDSON TIRE COMPANY INTENDED THE BID OF $75.75 AS ITS PRICE FOR ITEM 49 AND NOT ITEM 48, THE ERROR WAS DUE SOLELY TO NEGLIGENCE OR OVERSIGHT ON THE COMPANY'S PART AND WAS NOT INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS WAS MADE WAS UNILATERAL - NOT MUTUAL - AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN & DOUGHERTY V. UNITED STATES, 102 C. CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505, 507.

ACCORDINGLY, I FIND NO LEGAL BASIS FOR RELEASING C.A. HUDSON TIRE COMPANY FROM THE TERMS OF CONTRACT NO. (02-604S-53-26, AS TO ITEM 48.