B-124780, AUG. 17, 1955

B-124780: Aug 17, 1955

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INC.: REFERENCE IS MADE TO YOUR LETTERS OF JUNE 7. WERE NOT ONLY CONSIDERABLY LOWER THAN WAS ECONOMICALLY SOUND BUT THAT YOUR ULTIMATE LOSS IN THE PRODUCTION OF THE CONTRACT ITEM APPROXIMATED $600 PER UNIT. IT IS ADMINISTRATIVELY REPORTED THAT YOUR BID WAS ACCEPTED AND THE CONTRACT EXECUTED IN GOOD FAITH WITHOUT NOTICE. THE CLAIM WAS DISALLOWED IN THE SETTLEMENT ON THAT BASIS WITH SUPPORTING COURT CASES CITED THEREIN. YOU INDICATE THAT SUCH A VARIATION IS CLEAR EVIDENCE OF YOUR ERROR IN QUESTION. WHILE IT IS UNFORTUNATE THAT THE ERROR WAS NOT DISCOVERED BY YOUR STAFF PRIOR TO THE SUBMISSION OF YOUR BID. IT MUST BE OBSERVED THAT THE PRIME QUESTION HERE IS NOT WHETHER YOU MADE AN ERROR IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF.

B-124780, AUG. 17, 1955

TO BARTH ENGINEERING AND MANUFACTURING COMPANY, INC.:

REFERENCE IS MADE TO YOUR LETTERS OF JUNE 7, AND JULY 15, 1955, REQUESTING REVIEW OF OUR CLAIMS DIVISION SETTLEMENT OF JUNE 2, 1955, WHICH DISALLOWED YOUR CLAIM FOR $12,600, REPRESENTING YOUR ALLEGED LOSS IN FURNISHING CERTAIN POWER SQUARING SHEARS PURSUANT TO THE TERMS OF CONTRACT NO. AF 09/603/30284, DATED MAY 25, 1953.

IT APPEARS THAT FOLLOWING THE COMPLETION OF THE CONTRACT AND YOUR RECEIPT OF PAYMENTS THEREUNDER, YOU DISCOVERED THAT THE ESTIMATES UPON WHICH YOU RELIED IN SUBMITTING THE UNIT PRICES IN RESPONSE TO THE INVITATION ISSUED BY THE NORTHEASTERN AIR PROCUREMENT DISTRICT, BOSTON, MASSACHUSETTS, WERE NOT ONLY CONSIDERABLY LOWER THAN WAS ECONOMICALLY SOUND BUT THAT YOUR ULTIMATE LOSS IN THE PRODUCTION OF THE CONTRACT ITEM APPROXIMATED $600 PER UNIT. IT IS ADMINISTRATIVELY REPORTED THAT YOUR BID WAS ACCEPTED AND THE CONTRACT EXECUTED IN GOOD FAITH WITHOUT NOTICE, CONSTRUCTIVE OR OTHERWISE, THAT AN ERROR APPEARED THEREIN. THE CLAIM WAS DISALLOWED IN THE SETTLEMENT ON THAT BASIS WITH SUPPORTING COURT CASES CITED THEREIN. YOUR CURRENT CORRESPONDENCE, WHILE AGAIN ADMITTING FULL RESPONSIBILITY IN THE PRICES SUBMITTED IN YOUR BID, YOU STRESS THE FACT THAT ONE OF YOUR COMPETITORS SINCE HAS BEEN AWARDED A CONTRACT FOR A SIMILAR ITEM AT A UNIT PRICE OF $700 IN EXCESS OF YOUR PRICE UNDER THE INSTANT CONTRACT. YOU INDICATE THAT SUCH A VARIATION IS CLEAR EVIDENCE OF YOUR ERROR IN QUESTION.

WHILE IT IS UNFORTUNATE THAT THE ERROR WAS NOT DISCOVERED BY YOUR STAFF PRIOR TO THE SUBMISSION OF YOUR BID, IT MUST BE OBSERVED THAT THE PRIME QUESTION HERE IS NOT WHETHER YOU MADE AN ERROR IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE INVITATION WAS CLEAR AND UNAMBIGUOUS AS TO THE NEEDS OF THE GOVERNMENT. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE THERETO WAS UPON THE BIDDER, WHICH FACT YOU DO NOT DISPUTE. SEE FRAZIER- DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. WHILE YOU APPEAR CONVINCED THAT AN ERROR WAS MADE IN THE BID, IT IS CLEAR THAT SUCH ERROR WAS DUE SOLELY TO YOUR OWN INADVERTENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MADE WAS UNILATERAL--- NOT MUTUAL -- AND, THEREFORE, DOES NOT ENTITLE YOUR FIRM TO RELIEF. THE CONTRACT HERE INVOLVED VESTED IN THE UNITED STATES THE RIGHT TO HAVE IT PERFORMED STRICTLY IN ACCORDANCE WITH ITS TERMS; AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO DIVEST THE GOVERNMENT OF SUCH VESTED RIGHT OR TO ALLOW COMPENSATION FOR PERFORMANCE IN AN AMOUNT GREATER THAN THAT AGREED UPON IN THE CONTRACT. BRAWLEY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372, 379; UNITED STATES V. AMERICAN SALES COMPANY, 27 F.2D 389, AFFIRMED IN 32 F.2D 141, AND CERTIORARI DENIED, 280 U.S. 574. WHILE THE AWARD UNDER THE OTHER CONTRACT REFERRED TO MAY BE AS STATED BY YOU, AND THAT STATEMENT IS NOT DENIED, THE INCREASED PRICE PAID BY THE GOVERNMENT IN THAT TRANSACTION WOULD HAVE NO LEGAL BEARING ON THE CONTRACT PRICE AGREED UPON AND PAID IN THE INSTANT CASE.

ACCORDINGLY, THE ACTION IN THE SETTLEMENT OF JUNE 2, 1955, IS SUSTAINED.