B-123808, JUN. 22, 1955

B-123808: Jun 22, 1955

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF APRIL 28. WAS AWARDED. THE WORK TO BE PERFORMED IS DIVIDED INTO 85 ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK PERFORMED. THE TOTAL OF WHICH IS $485. THE JOB PRICE QUOTED ON EACH OF ITEMS 22 AND 25 WAS $14. IT IS STATED THAT IMMEDIATELY AFTER THE OPENING OF BIDS. A CONFERENCE WAS HELD IN THE TULSA DISTRICT OFFICE WITH REPRESENTATIVES OF THE LOW BIDDER. THAT IN RESPONSE TO AN INQUIRY AS TO WHETHER THEY WERE SATISFIED WITH THE COMPANY'S BID. A CONTRACT FOR THE CONSTRUCTION OF THE BUILDINGS WAS AWARDED TO THE SHELTON CONSTRUCTION COMPANY. THE SHELTON CONSTRUCTION COMPANY WAS DIRECTED TO PROCEED WITH THE WORK AND ON THE FOLLOWING DAY THE NOTICE TO PROCEED WAS ACCEPTED BY THE COMPANY WITHOUT PROTEST.

B-123808, JUN. 22, 1955

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 28, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING ERRORS THE SHELTON CONSTRUCTION COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-34-066-ENG-4456, DATED DECEMBER 10, 1954, WAS AWARDED.

BY INVITATION NO. ENG 34-066-55-26, THE OFFICE OF THE DISTRICT ENGINEER, TULSA DISTRICT, CORPS OF ENGINEERS, REQUESTED BIDS FOR FURNISHING MATERIALS AND PERFORMING THE WORK FOR CONSTRUCTION OF GROUP 3 BUILDINGS, PLANT NO. 3, LONGHORN ORDNANCE WORKS, MARSHALL, TEXAS, IN ACCORDANCE WITH CERTAIN SPECIFICATIONS AND DRAWINGS. THE WORK TO BE PERFORMED IS DIVIDED INTO 85 ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK PERFORMED.

IN RESPONSE TO THE INVITATION, THE SHELTON CONSTRUCTION COMPANY SUBMITTED A BID DATED DECEMBER 8, 1954, OFFERING TO PERFORM THE WORK FOR THE VARIOUS UNIT AND JOB PRICES SET FORTH OPPOSITE EACH ITEM, THE TOTAL OF WHICH IS $485,833.75. THE JOB PRICE QUOTED ON EACH OF ITEMS 22 AND 25 WAS $14,009. EIGHT OTHER BIDDERS QUOTED AGGREGATE TOTAL PRICES RANGING FROM $538,346 TO $610,037.50 FOR THE WORK.

IN AN UNDATED REPORT FROM THE CONTRACTING OFFICER, IT IS STATED THAT IMMEDIATELY AFTER THE OPENING OF BIDS, A CONFERENCE WAS HELD IN THE TULSA DISTRICT OFFICE WITH REPRESENTATIVES OF THE LOW BIDDER, SHELTON CONSTRUCTION COMPANY, FOR THE PURPOSES OF DISCUSSING THE WORK AND THE COMPANY'S BID; THAT IN RESPONSE TO AN INQUIRY AS TO WHETHER THEY WERE SATISFIED WITH THE COMPANY'S BID, THE REPRESENTATIVES REPLIED IN THE AFFIRMATIVE; THAT ON DECEMBER 10, 1954, A CONTRACT FOR THE CONSTRUCTION OF THE BUILDINGS WAS AWARDED TO THE SHELTON CONSTRUCTION COMPANY; AND THAT ON DECEMBER 13, 1954, THE COMPANY ADVISED BY TELEPHONE THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEMS 22 AND 25. UNDER DATE OF DECEMBER 22, 1954, THE SHELTON CONSTRUCTION COMPANY WAS DIRECTED TO PROCEED WITH THE WORK AND ON THE FOLLOWING DAY THE NOTICE TO PROCEED WAS ACCEPTED BY THE COMPANY WITHOUT PROTEST.

IN A LETTER DATED DECEMBER 15, 1954, THE SHELTON CONSTRUCTION COMPANY CONFIRMED THE VERBAL ALLEGATIONS OF ERROR AND STATED THAT IN COMPUTING ITS BID PRICES FOR ITEMS 22 AND 25, IT FAILED TO INCLUDE THE PROPER COSTS FOR FURNISHING AND INSTALLING SPECIFIED X-RAY PROOF PANELS IN X-RAY BUILDINGS NOS. 1811-2 AND 1811-5. BY LETTER DATED FEBRUARY 28, 1955, THE COMPANY REQUESTED THAT THE CONTRACT PRICE OF EACH OF ITEMS 22 AND 25 BE INCREASED BY $11,916.12, OR A TOTAL OF $23,832.24 FOR BOTH ITEMS. IN SUPPORT OF ITS ALLEGATIONS OF ERROR THE COMPANY SUBMITTED THE ESTIMATE SHEETS USED IN COMPUTING ITS BID PRICES FOR ITEMS 22 AND 25 AND COPIES OF QUOTATIONS ON THE X-RAY PROOF PANELS RECEIVED FROM CERTAIN SUPPLIERS.

IN ITS LETTER OF DECEMBER 15, 1954, THE COMPANY CONTENDS THAT THE ERROR IN ITS BID WAS SO APPARENT THAT THE CONTRACTING OFFICER SHOULD HAVE RECOGNIZED IT BY A COMPARISON WITH THE GOVERNMENT'S ESTIMATES FOR ITEMS 22 AND 25, WHICH ARE IN THE AMOUNTS OF $25,588 AND $25,705, RESPECTIVELY. WHILE THE COMPANY'S JOB PRICE OF $14,009 FOR EACH OF ITEMS 22 AND 25 WAS LOWER THAN THE GOVERNMENT'S ESTIMATE FOR EACH OF THOSE ITEMS, THE ABSTRACT OF BIDS INDICATES THAT ONE OTHER BIDDER QUOTED A JOB PRICE OF $7,931.83 FOR ITEM 22 AND THAT ANOTHER BIDDER QUOTED A JOB PRICE OF $10,000 FOR ITEM 25. ALTHOUGH, AFTER AWARD, THE COMPANY SUBMITTED CERTAIN ESTIMATE SHEETS AND OTHER DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE COMPANY IN COMPUTING ITS BID PRICES ON THE ITEMS IN QUESTION.

THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. IN THESE CIRCUMSTANCES A COMPLETE, VALID AND ENFORCEABLE CONTRACT CAME INTO BEING UPON ACCEPTANCE OF THE BID, WHETHER OR NOT THE FORMAL CONTRACT WAS EVER EXECUTED. GARFIELDS V. UNITED STATES, 93 U.S. 242; ACKERLIND V. UNITED STATES, 240 U.S. 531; UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313; AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75; UNITED STATES V. CONTI, 119 F.2D 652.

IT IS THE ESTABLISHED RULE THAT WHEN A BIDDER HAS MADE A MISTAKE AND HIS BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER HAD OR WAS CHARGEABLE WITH ACTUAL OR CONSTRUCTIVE NOTICE OF IT, SO THAT HIS ACCEPTANCE WAS IN EFFECT FRAUDULENT. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE TO THE MATTER, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFYING THE PRICES SPECIFIED FOR ITEMS 22 AND 25 IN CONTRACT NO. DA 34-066-ENG-4456.

THE CONTRACTING OFFICER'S UNDATED REPORT AND A DUPLICATE SET OF THE PAPERS IN THE CASE ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.