B-125422, FEB. 27, 1956

B-125422: Feb 27, 1956

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 29. IT BEING STATED IN YOUR LETTER THAT YOU MADE A MISTAKE IN THE INTERPRETATION OF THE CONTRACT SPECIFICATIONS AND THAT SUCH FACT WAS MADE KNOWN TO "AN OFFICER OF THE QUARTERMASTER DEPOT" BEFORE THE AWARD. YOU WERE AWARDED CONTRACT NO. THE CONTRACTING OFFICER REPORTS THAT THE AWARD WAS NOT RELEASED FOR MAILING UNTIL THE MORNING OF JUNE 16. PERFORMANCE UNDER THE CONTRACT WAS BEGUN BY YOU AND THAT COMPLETION THEREOF WAS ANTICIPATED BY DECEMBER 15. IN COMPETITIVE BIDDING ON GOVERNMENT CONTRACTS IT IS THE SETTLED RULE OF LAW THAT AFTER BIDS HAVE BEEN OPENED A BIDDER CANNOT WITHDRAW HIS BID UNLESS HE CAN PROVE THAT THE DESIRE TO WITHDRAW IS DUE SOLELY TO AN HONEST MISTAKE.

B-125422, FEB. 27, 1956

TO CELLULOSE AND PAPER CONVERTING COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 29, 1955, WITH ENCLOSURES, WHEREIN YOU PROTESTED THE AWARD TO YOU OF CONTRACT NO. DA 36- 030-QM-5713, DATED JUNE 14, 1955, IT BEING STATED IN YOUR LETTER THAT YOU MADE A MISTAKE IN THE INTERPRETATION OF THE CONTRACT SPECIFICATIONS AND THAT SUCH FACT WAS MADE KNOWN TO "AN OFFICER OF THE QUARTERMASTER DEPOT" BEFORE THE AWARD. YOUR LETTER, IN EFFECT, SUBMITS A CLAIM IN THE AMOUNT OF $1,849.05 BASED UPON THE ALLEGED MISTAKE IN BID.

THE RECORD DISCLOSES THAT IN RESPONSE TO INVITATION FOR BIDS NO. QM 36- 030-55-882, ISSUED ON MAY 27, 1955, BY THE PHILADELPHIA QUARTERMASTER DEPOT, YOUR COMPANY SUBMITTED AN OFFER TO MANUFACTURE AND DELIVER 42,264 ROLLS OF PAPER, TELETYPE, ROLL FORM, SINGLE TYPE, CANARY YELLOW, DIAMETER 4 3/4 INCHES, F.O.B. DESTINATION, AT A UNIT PRICE OF $0.43, OR FOR A TOTAL CONTRACT CONSIDERATION OF$18,173.52. UNDER DATE OF JUNE 14, 1955, YOU WERE AWARDED CONTRACT NO. DA-36-030 QM-5713; HOWEVER, THE CONTRACTING OFFICER REPORTS THAT THE AWARD WAS NOT RELEASED FOR MAILING UNTIL THE MORNING OF JUNE 16, 1955. YOU REPORT THE NOTICE OF AWARD AS HAVING BEEN RECEIVED BY YOU ON JUNE 17, 1955.

IT APPEARS FROM THE REPORT OF THE CONTRACTING OFFICER THAT ON JUNE 16, 1955, YOUR MR. JULES BLOCK ADVISED MR. FRANK HALLOBY BY TELEPHONE THAT ACCORDING TO HIS INTERPRETATION OF THE APPLICABLE SPECIFICATION AS SET OUT IN UU-P-547E, DATED MARCH 13, 1953, PARAGRAPH 7.2, REGULAR SLOTTED CARTONS WOULD COMPLY THEREWITH. MR. HALLOBY, PURCHASING AGENT UNDER THE SUBJECT CONTRACT, ADVISED MR. BLOCK THAT THE REFERENCED APPLICABLE SPECIFICATION REQUIRED FULL TELESCOPE CONTAINERS. MR. BLOCK THEN REPLIED THAT IF THE SPECIFICATION CALLED FOR SUCH TELESCOPE CONTAINERS THEN THE CONTRACTOR HAD MADE A MISTAKE IN THE BID AND DESIRED TO WITHDRAW THE SAME. THE RECORD INDICATES THAT NOTWITHSTANDING YOUR PROTEST, PERFORMANCE UNDER THE CONTRACT WAS BEGUN BY YOU AND THAT COMPLETION THEREOF WAS ANTICIPATED BY DECEMBER 15, 1955.

IN COMPETITIVE BIDDING ON GOVERNMENT CONTRACTS IT IS THE SETTLED RULE OF LAW THAT AFTER BIDS HAVE BEEN OPENED A BIDDER CANNOT WITHDRAW HIS BID UNLESS HE CAN PROVE THAT THE DESIRE TO WITHDRAW IS DUE SOLELY TO AN HONEST MISTAKE. REFINING ASSOCIATES V. UNITED STATES, 124 C.CLS. 115, 109 F.SUPP. 259. ACCEPTANCE OF A BID CONSUMMATES A VALID AND BINDING CONTRACT UNLESS THE OFFICER ACCEPTING IT WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

ACTUALLY, THIS OFFICE IS UNABLE TO DETERMINE FROM YOUR WORKSHEET WHETHER YOU WERE BIDDING ON THE BASIS OF FURNISHING A "SLOTTED CARTON," OR THE FURNISHING OF A "TELESCOPE CARTON," AS REQUIRED BY THE SPECIFICATIONS. THE CASE OF HEARNE V. MARINE INSURANCE COMPANY, 20 WALL. 488, 490, THE COURT SAID:

"THE PARTY ALLEGING THE MISTAKE MUST SHOW EXACTLY IN WHAT IT CONSISTS, AND THE CORRECTION THAT SHOULD BE MADE. THE EVIDENCE MUST BE SUCH AS TO LEAVE NO REASONABLE DOUBT UPON THE MIND OF THE COURT AS TO EITHER OF THESE POINTS. THE MISTAKE MUST BE MUTUAL AND COMMON TO BOTH PARTIES TO THE INSTRUMENT. IT MUST APPEAR THAT BOTH HAVE DONE WHAT NEITHER INTENDED.

THE CONTRACTING OFFICER REPORTS THAT APPROXIMATELY ONE YEAR PREVIOUS, JUNE 7, 1954, YOU WERE AWARDED CONTRACT NO. QM-312 CALLING FOR THE IDENTICAL ITEM IN ACCORDANCE WITH THE SAME PACKAGING SPECIFICATION. THAT TIME YOUR CONCERN RAISED THE QUESTION WHETHER A SLOTTED CARTON OR A TELESCOPE CARTON WAS REQUIRED. YOU WERE ADVISED THROUGH YOUR MR. JULES BLOCK, THE SAME MR. BLOCK INVOLVED IN THE INSTANT CASE, THAT THE SPECIFICATION REQUIRED A FULL TELESCOPE CARTON. THEREAFTER, YOU PERFORMED THE CONTRACT, UTILIZING A FULL TELESCOPE CARTON, WITHOUT ANY ALLEGATION OF MISTAKE. IN THESE CIRCUMSTANCES, WE DO NOT FEEL THAT YOUR CLAIM OF MISINTERPRETATION OF THE SPECIFICATIONS IN THE PRESENT INSTANCE CAN BE ALLOWED.

THERE IS ALSO FOR CONSIDERATION THE FACT THAT, NOTWITHSTANDING YOUR ALLEGATION OF MISTAKE, YOU PROCEEDED TO PERFORM UNDER THE CONTRACT AND PRESUMABLY HAVE COMPLETED THE SAME AND RECEIVED FULL PAYMENT IN ACCORDANCE WITH ITS TERMS. IN THE CASE OF BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INC., 133 F.2D 399, THE APPELLEE ALLEGED ERROR IN ITS BID AND REQUESTED PERMISSION TO WITHDRAW THE SAME. UPON BEING ADVISED THAT ITS BID BOND WOULD BE FORFEITED IF IT REFUSED TO PERFORM, THE APPELLEE EXECUTED A WRITTEN CONTRACT IN ACCORDANCE WITH ITS BID AND NOTIFIED APPELLANT THAT IT WAS DOING SO UNDER PROTEST,"RESERVING" ALL RIGHTS ARISING FROM THE ERROR IN BID. SUBSEQUENTLY, THE COMPANY INSTITUTED A SUIT FOR AN AMOUNT IN ADDITION TO THE CONTRACT PRICE WHICH HAD BEEN PAID. IN DENYING RECOVERY FOR THE ADDITIONAL AMOUNT, THE COURT, UPON APPEAL, SAID THAT IN ENTERING INTO THE CONTRACT THE APPELLEE DID SO "UNDER NO MISTAKE, FOR IT THEN KNEW ALL THE FACTS INCLUDING ITS FORMER MISTAKE" AND THAT THE APPELLEE "COULD NOT ON ANY THEORY CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE. IT COULD NOT ACQUIRE SUCH A RIGHT BY PURPORTING TO "RESERVE" IT. THIS IS WHAT IT HAS ATTEMPTED TO DO.'

ACCORDINGLY, THERE APPEARS TO BE NO BASIS FOR THE ALLOWANCE OF ANY ADDITIONAL AMOUNT OVER THE CONTRACT PRICE, AND YOUR CLAIM IS HEREBY DENIED.