B-125530, NOV. 10, 1955

B-125530: Nov 10, 1955

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INC.: REFERENCE IS MADE TO LETTER OF SEPTEMBER 2. THE PROPOSAL WAS THE LOWEST BID RECEIVED. WAS ACCEPTED ON NOVEMBER 20. YOUR UNDATED STATEMENT OF CLAIM FILED IN THE MATTER SETS FORTH THE FACTS INVOLVED AND THEREFORE THEY WILL NOT BE REPEATED HERE. THE CLAIM WHICH WAS RECEIVED MAY 11. THE APPLICATION FOR RELIEF WAS CONSIDERED BY THE OFFICE OF THE QUARTERMASTER GENERAL OF THE DEPARTMENT OF THE ARMY AND ON JUNE 7. WAS DENIED FOR THE REASONS STATED IN LETTER OF JUNE 10. THE SUBJECT CLAIM IS PREDICATED UPON AN ERROR IN BID ALLEGED AFTER AWARD. 22 DAYS AFTER THE AWARD WAS MADE. YOU CONTEND THAT ALTHOUGH AN INNOCENT MISTAKE WAS MADE IN BASING THE BID UPON THE WRONG SPECIFICATION. THE PRICES OFFERED WERE SO OBVIOUSLY IN ERROR THAT THE QUARTERMASTER DEPOT UNQUESTIONABLY KNEW THAT THE BID WAS ONLY ONE-HALF THE AMOUNT IT SHOULD HAVE BEEN.

B-125530, NOV. 10, 1955

TO MILLER AND HART, INC.:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 2, 1955, WRITTEN IN YOUR BEHALF BY ATTORNEYS STANFORD CLINTON AND ROBERT A. SPRECHER, REQUESTING RECONSIDERATION OF OFFICE SETTLEMENT DATED AUGUST 17, 1955, WHICH DISALLOWED YOUR CLAIM IN THE AMOUNT OF $198,153.60, REPRESENTING ADDITIONAL COMPENSATION ALLEGED TO BE DUE ON ACCOUNT OF AN ERROR IN BID ON A QUANTITY OF CANNED PORK AND GRAVY YOU FURNISHED THE DEPARTMENT OF THE ARMY PURSUANT TO CONTRACT NO. DA 11-009 QM-21829, DATED NOVEMBER 20, 1952.

THE RECORD SHOWS THAT IN RESPONSE TO REQUEST FOR PROPOSAL NO. QM 11 009- 53-NEG-51 DATED NOVEMBER 3, 1952, ISSUED BY THE CHICAGO QUARTERMASTER DEPOT, YOU OFFERED TO FURNISH 50,488 DOZEN CANS OF PORK AND GRAVY, 30 OUNCE NET WEIGHT CAN, IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-P- 1044B, DATED JUNE 23, 1952, MADE A PART OF THE CONTRACT. THE PROPOSAL WAS THE LOWEST BID RECEIVED, AND WAS ACCEPTED ON NOVEMBER 20, 1952.

YOUR UNDATED STATEMENT OF CLAIM FILED IN THE MATTER SETS FORTH THE FACTS INVOLVED AND THEREFORE THEY WILL NOT BE REPEATED HERE. THE CLAIM WHICH WAS RECEIVED MAY 11, 1954, BY THE SUCCESSOR CONTRACTING OFFICER BY IMPLICATION REQUESTED RELIEF UNDER TITLE II, FIRST WAR POWERS ACT, 1941, AS AMENDED, AND EXECUTIVE ORDER NO. 10210. THE APPLICATION FOR RELIEF WAS CONSIDERED BY THE OFFICE OF THE QUARTERMASTER GENERAL OF THE DEPARTMENT OF THE ARMY AND ON JUNE 7, 1955, WAS DENIED FOR THE REASONS STATED IN LETTER OF JUNE 10, 1955, TO YOUR ATTORNEYS. THEREAFTER YOU REQUESTED THAT THE CLAIM BE FORWARDED TO THE GENERAL ACCOUNTING OFFICE FOR CONSIDERATION.

THE SUBJECT CLAIM IS PREDICATED UPON AN ERROR IN BID ALLEGED AFTER AWARD, HAVING BEEN BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER ON OR ABOUT DECEMBER 12, 1952, 22 DAYS AFTER THE AWARD WAS MADE. YOU CONTEND THAT ALTHOUGH AN INNOCENT MISTAKE WAS MADE IN BASING THE BID UPON THE WRONG SPECIFICATION, THE PRICES OFFERED WERE SO OBVIOUSLY IN ERROR THAT THE QUARTERMASTER DEPOT UNQUESTIONABLY KNEW THAT THE BID WAS ONLY ONE-HALF THE AMOUNT IT SHOULD HAVE BEEN. ALSO, IT IS CONTENDED THAT SINCE THE REVISED SPECIFICATION HAD NEVER BEEN USED BEFORE IT WAS IMPOSSIBLE TO PREDICT ITS EFFECT UPON THE PRODUCTION OF THE END ITEM, AND THAT IT IS NOT JUST OR EQUITABLE FOR THE ARMY TO EXPERIMENT WITH A SINGLE PRODUCER AND CAUSE THAT PRODUCER A HUGE LOSS.

THE FACTORS WHICH HAVE CAUSED THE REPORTED FINANCIAL LOSS APPEAR TO HAVE BEEN THE RESULT OF PRODUCTION DIFFICULTIES ENCOUNTERED IN COMPLYING WITH THE REVISED SPECIFICATION MIL-P-1044B, IN THAT YOU WERE UNABLE TO OBTAIN A YIELD FROM RAW PRODUCTS COMPARABLE TO THE YIELD OBTAINED UNDER PRIOR MILITARY SPECIFICATION MIL-P-1044A. IN THE REPORT DATED JULY 8, 1955, OF THE SUCCESSOR CONTRACTING OFFICER REGARDING THOSE CONTENTIONS IT IS STATED THAT THE CONTRACTING OFFICER AND THE PURCHASING AGENT HAVE REAFFIRMED THAT AT THE TIME THE AWARD WAS BEING CONSIDERED, NEITHER HAD ANY KNOWLEDGE OF THE CLAIMANT'S FORMULA FOR COMPUTING ITS BID AND NEITHER HAD ANY KNOWLEDGE OR INFORMATION WHICH WOULD LEAD THEM TO BELIEVE THAT THE CHANGE OF SPECIFICATIONS WOULD AFFECT THE YIELD OF ACCEPTABLE PORK TO SUCH A DEGREE AS ALLEGED BY THE CLAIMANT, OR TO SUCH A DEGREE WHICH WOULD INDICATE FROM EXAMINATION OF THE PROPOSALS RECEIVED, THAT THE CLAIMANT HAD OBVIOUSLY MADE AN ERROR IN ITS PROPOSAL.

HE STATED FURTHER THAT PRIOR TO REVISION OF SPECIFICATION MIL-P 1044A THE QUARTERMASTER FOOD AND CONTAINER INSTITUTE COORDINATED THE PROPOSED REVISION WITH A REPRESENTATIVE PORTION OF THE CANNED MEAT INDUSTRY, INCLUDING THE CLAIMANT, WHO IN REPLY TO A QUESTIONNAIRE TO THE SAID INSTITUTE RECEIVED DECEMBER 26, 1951, INDICATED THAT THE PROPOSED SPECIFICATION WAS SATISFACTORY AS DRAFTED, CONFORMED TO GOOD TRADE PRACTICE, WAS PRACTICAL FOR REGULAR COMMERCIAL PRODUCTION AND COULD BE PRODUCED BY IT ON A LARGE SCALE DURING WARTIME.

THE COURTS HAVE HELD REPEATEDLY THAT WHEN A BIDDER HAS MADE A MISTAKE IN THE PREPARATION OF AN ACCEPTED BID, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. THE CONTRACTING OFFICER AND THE PURCHASING AGENT EACH HAVE STATED THAT NEITHER HAD ANY KNOWLEDGE OF THE CLAIMANT'S FORMULA FOR COMPUTING ITS BID, AND THAT A COMPARISON BETWEEN THE CONTRACTOR'S BID AND THE PROPOSALS RECEIVED FROM OTHER BIDDERS, FAILED TO INDICATE THAT CLAIMANT HAD MADE AN ERROR IN ITS PROPOSAL. SINCE THE DIFFERENCE WAS NOT SO DISPROPORTIONATE AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE MISTAKE, THERE IS NO LEGAL BASIS FOR CHARGING THAT OFFICER WITH CONSTRUCTIVE KNOWLEDGE OF THE ERROR.

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON YOU. FRAZIER- DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. SUCH ERROR AS WAS MADE IN THE BID WAS DUE SOLELY TO YOUR NEGLIGENCE OR INEXACTNESS AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND, CONSEQUENTLY THERE EXISTS NO LEGAL BASIS UPON WHICH THERE MAY BE ALLOWED ANY PART OF THE AMOUNT CLAIMED. ACCORDINGLY, THE SETTLEMENT OF AUGUST 17, 1955, MUST BE SUSTAINED. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505.

WITH REGARD TO YOUR REQUEST FOR AN OPPORTUNITY TO DISCUSS THE CLAIM PERSONALLY WITH A REPRESENTATIVE OF THIS OFFICE, YOU ARE ADVISED THAT WHILE ALL CLAIMS PROPERLY FOR SETTLEMENT HERE MAY BE CONSIDERED ONLY ON THE BASIS OF THE WRITTEN RECORD, AN INTERVIEW WILL BE ACCORDED YOU OR YOUR ATTORNEY AT ANY TIME DURING WORKING HOURS, 8:15 A.M. TO 4:45 P.M., MONDAY THROUGH FRIDAY. IT IS REQUESTED THAT YOU ADVISE US, IF POSSIBLE, A FEW DAYS IN ADVANCE OF YOUR INTENDED VISIT.