B-127000, FEB. 27, 1956

B-127000: Feb 27, 1956

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TO THE HONORABLE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF FEBRUARY 14. WAS BASED. BY INVITATION NO. 15-056-56-11 BIDS WERE REQUESTED FOR REPAIRING AND REFINISHING TO THEIR ORIGINAL NEW CONDITION A QUANTITY OF BAND INSTRUMENTS AS LISTED UNDER ITEMS NOS. 1 THROUGH 8. 7 AND 8 COVERING A TOTAL OF 20 INSTRUMENTS WERE AWARDED ON AUGUST 23. WHEN THE INSTRUMENTS WERE INSPECTED BY THE SUBCONTRACTOR AND ITS ESTIMATE OF THE REPAIR COSTS WAS SUBMITTED TO THE CONTRACTOR. REQUESTED THE CONTRACTING OFFICE TO CANCEL THE CONTRACT BECAUSE ITS BID BASED ON AN OBSOLETE PRICE LIST ISSUED BY THE SUBCONTRACTOR AND IT WAS DISCOVERED SINCE THE AWARD THAT FACTORY PRICES FOR REPAIRS HAD INCREASED MATERIALLY SINCE THE REFERRED-TO PRICE LIST WAS ISSUED.

B-127000, FEB. 27, 1956

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF FEBRUARY 14, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) REQUESTING A DECISION AS TO WHETHER THE RELIEF REQUESTED BY THE JACK HAMILTON ELECTRIC AND MUSIC STORE MAY BE GRANTED IN VIEW OF AN ALLEGED ERROR IN ITS BID ON WHICH UNNUMBERED CONTRACT (PURCHASE ORDER NO. O.I. 56-23-QM) DATED AUGUST 23, 1955, WAS BASED.

BY INVITATION NO. 15-056-56-11 BIDS WERE REQUESTED FOR REPAIRING AND REFINISHING TO THEIR ORIGINAL NEW CONDITION A QUANTITY OF BAND INSTRUMENTS AS LISTED UNDER ITEMS NOS. 1 THROUGH 8. ITEMS NOS. 2, 5, 6, 7 AND 8 COVERING A TOTAL OF 20 INSTRUMENTS WERE AWARDED ON AUGUST 23, 1955, TO THE JACK HAMILTON ELECTRIC AND MUSIC STORE ON ITS AGGREGATE BID OF $1,031 THEREFOR SIGNED BY JACK HAMILTON, OWNER. APPARENTLY THE CONTRACTOR PROCEEDED WITH THE WORK BY PROMPTLY SENDING A NUMBER OF THE INSTRUMENTS TO ITS SUBCONTRACTOR, THE BUESCHER BAND INSTRUMENT COMPANY, WITH WHOM APPARENTLY NO PRIOR COMMITMENT AS TO CHARGES FOR THE REPAIRS HAD BEEN EFFECTED. WHEN THE INSTRUMENTS WERE INSPECTED BY THE SUBCONTRACTOR AND ITS ESTIMATE OF THE REPAIR COSTS WAS SUBMITTED TO THE CONTRACTOR, THE LATTER, BY LETTER DATED SEPTEMBER 13, 1955, REQUESTED THE CONTRACTING OFFICE TO CANCEL THE CONTRACT BECAUSE ITS BID BASED ON AN OBSOLETE PRICE LIST ISSUED BY THE SUBCONTRACTOR AND IT WAS DISCOVERED SINCE THE AWARD THAT FACTORY PRICES FOR REPAIRS HAD INCREASED MATERIALLY SINCE THE REFERRED-TO PRICE LIST WAS ISSUED. IT CONTENDED THAT UNLESS THE CONTRACT WERE CANCELED OR THE CONTRACT PRICE INCREASED, A SUBSTANTIAL LOSS WOULD BE INCURRED. THE CONTRACTOR WAS ADVISED BY LETTER OF OCTOBER 6, 1955, TO PROCEED WITH THE CONTRACT SINCE THE REPAIRS WERE URGENTLY NEEDED AND THAT ITS CLAIM FOR RELIEF WOULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR A DECISION. SUBSEQUENTLY BY LETTER OF DECEMBER 16, 1955, TO THE CONTRACTING OFFICER, THE CONTRACTOR REQUESTED THAT IT BE GRANTED AN INCREASE OF $582.21 IN THE CONTRACT PRICE WHICH IS ESTIMATED WOULD BE ITS LOSS UNLESS THE REQUESTED RELIEF IS AUTHORIZED.

NOTHING APPEARS ON THE FACE OF THE BID TO INDICATE THAT IT WAS NOT AS INTENDED, AND THE FACTS OF RECORD INDICATE THAT AT THE TIME OF AWARD AND FOR APPROXIMATELY TWO WEEKS THEREAFTER THE BID WAS INTENDED PRECISELY AS SUBMITTED. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS RECEIVED ON ITEMS NOS. 2, 5, 6, 7 AND 8 WERE IN AGGREGATE AMOUNTS OF $1,364.24 AND $1,841. APPARENTLY THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID OF $1,031 AND THE OTHER BIDS DID NOT PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ANY ERROR IN THE BID, AND THE DIFFERENCE $333.24 BETWEEN THE CONTRACTOR'S BID AND THE NEXT LOWEST BID IS NOT GREAT ENOUGH TO WARRANT THE CONCLUSION THAT HE SHOULD HAVE SUSPECTED THAT THE LOW BID WAS ERRONEOUS AND REQUESTED A VERIFICATION THEREOF PRIOR TO AWARD. SO FAR AS THE PRESENT RECORD SHOWS THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. 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 INVITATION WAS CLEAR AND UNAMBIGUOUS AND LEFT NO DOUBT AS TO THE REQUIREMENTS OF THE GOVERNMENT. THE RESPONSIBILITY FOR PREPARING AND SUBMITTING A BID IN RESPONSE THERETO WAS UPON THE BIDDER. IF IT CHOSE TO RELY ON ANTIQUATED PRICE LIST WITHOUT A LATER QUOTATION OR DEFINITE COMMITMENT FROM ITS SUPPLIER, THAT WAS ITS OWN CONCERN AND IF THE CONTRACTOR MADE A MISTAKE IN SUBMITTING A BID TOO LOW BY REASON THEREOF, THE MISTAKE WAS DUE SOLELY TO ITS OWN LACK OF DUE CARE. IT WAS NOT INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. CONSEQUENTLY, ANY ERROR THAT WAS MADE IN BIDDING WAS UNILATERAL, NOT MUTUAL, AND THEREFOR DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, WE FIND NO BASIS ON THE PRESENT RECORD FOR RELEASING THE CONTRACTOR FROM ITS OBLIGATION TO FURNISH THE INSTRUMENT REPAIRS AT THE PRICE FIXED THEREFOR IN THE CONTRACT. HOWEVER, SINCE IT APPEARS THAT THE CONTRACTING OFFICER FIRST DIRECTED THE CONTRACTOR TO RETURN THE INSTRUMENTS WHICH HAD ALREADY BEEN SHIPPED TO THE SUBCONTRACTOR, AND THEN REQUIRED THEM TO BE SHIPPED BACK, THE COST OF THE ADDITIONAL TRANSPORTATION SO INCURRED MAY BE PAID.