B-128226, JUL. 2, 1956

B-128226: Jul 2, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CLAIR: REFERENCE IS MADE TO YOUR LETTER OF MAY 14. 422.06 FOR AN INCREASED CHARGE FOR MATERIALS AND SERVICES FURNISHED THE UNITED STATES COAST GUARD DUE TO AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID ON WHICH CONTRACT NO. IS BASED. WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT BIDS WERE DESIRED FOR THE INSTALLATION OF CERTAIN PLUMBING AND HEATING FACILITIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THAT INVITATION WAS UPON YOU. - "* * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IT IS CLEAR THAT SUCH ERROR AS WAS MADE IN YOUR BID WAS DUE SOLELY TO YOUR OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT.

B-128226, JUL. 2, 1956

TO MR. RAYMOND ST. CLAIR:

REFERENCE IS MADE TO YOUR LETTER OF MAY 14, 1956, REQUESTING REVIEW OF OUR SETTLEMENT DATED MAY 10, 1956, WHICH DISALLOWED YOUR CLAIM FOR $1,422.06 FOR AN INCREASED CHARGE FOR MATERIALS AND SERVICES FURNISHED THE UNITED STATES COAST GUARD DUE TO AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID ON WHICH CONTRACT NO. TO3CG-2342, DATED MAY 16, 1955, IS BASED.

UNDER DATE OF APRIL 25, 1955, THE UNITED STATES COAST GUARD, TREASURY DEPARTMENT, INVITED BIDS FOR THE INSTALLATION OF PLUMBING AND HEATING FACILITIES IN THE STATION DWELLING AT MONTAUK LIFEBOAT STATION, MONTAUK, LONG ISLAND, NEW YORK, IN STRICT ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS. IN RESPONSE THERETO YOU OFFERED TO FURNISH THE NECESSARY LABOR AND MATERIALS AND TO INSTALL THE PLUMBING AND HEATING FACILITIES FOR THE TOTAL AMOUNT OF $3,495.

IN A LETTER DATED MAY 13, 1955, YOU STATE THAT AFTER RECEIVING TELEPHONE INFORMATION OF THE AWARD TO YOU, YOU CHECKED YOUR PRICE AND MATERIALS AGAINST THE SPECIFICATIONS, IMMEDIATELY CONTACTED THE CONTRACTING OFFICER AND ADVISED HIM OF AN ERROR IN YOUR BID, WHICH RESULTED FROM THE OMISSION OF CERTAIN ITEMS OF LABOR AND MATERIAL. YOU REQUEST THAT FAVORABLE CONSIDERATION BE GIVEN YOUR CLAIM IN THE SUM OF $1,422.06 TO COVER YOUR ERROR.

THE INVITATION ISSUED ON APRIL 25, 1955, BY THE UNITED STATES COAST GUARD, TREASURY DEPARTMENT, WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT BIDS WERE DESIRED FOR THE INSTALLATION OF CERTAIN PLUMBING AND HEATING FACILITIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THAT INVITATION WAS UPON YOU. SEE THE CASE OF FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163, WHEREIN THE COURT SAID---

"* * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IF THEY FAIL TO DO SO, AS PLAINTIFF DID IN THIS CASE, THE GOVERNMENT CANNOT FOR THAT REASON BE HELD FOR THE RESULTING LOSS.' IT IS CLEAR THAT SUCH ERROR AS WAS MADE IN YOUR BID WAS DUE SOLELY TO YOUR OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID---

"MISTAKE, TO BE AVAILABLE IN EQUITY, MUST NOT HAVE ARISEN FROM NEGLIGENCE WHERE THE MEANS OF KNOWLEDGE WERE EASILY ACCESSIBLE. THE PARTY COMPLAINING MUST HAVE EXERCISED AT LEAST THE DEGREE OF DILIGENCE "WHICH MAY BE FAIRLY EXPECTED FROM A REASONABLE PERSON.'"

SUCH ERROR AS WAS MADE IN YOUR BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE YOU TO RELIEF. SEE SALIGMAN, ET AL., V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249.

THE CONTRACTING OFFICER HAS REPORTED THAT AT THE TIME OF THE OPENING OF THE BID IT WAS NOTED THAT THERE WAS A WIDE SPREAD BETWEEN YOUR BID AND THE HIGHER BIDS. HOWEVER, SINCE SUCH A WIDE SPREAD IN BIDS IS NOT AN UNUSUAL OCCURRENCE, THERE WAS NOTHING TO PUT THE CONTRACTING OFFICER ON NOTICE THAT A MISTAKE HAD BEEN MADE BY YOU IN THE AMOUNT OF YOUR BID.

AFTER ALLEGING THAT ERROR, YOU EXECUTED THE CONTRACT, AGREEING TO FURNISH THE LABOR AND MATERIALS AND TO PERFORM THE CONTRACT SUBJECT TO APPEAL TO OUR OFFICE BECAUSE OF THE ERROR. YOU PERFORMED THE CONTRACT AND YOU WERE PAID THE AGREED PRICE.

THE FACTS IN THE INSTANT CASE ARE SIMILAR TO THOSE IN THE CASE OF BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INC., 133 F.2D 399, WHEREIN THE COMPANY ALLEGED ERROR IN ITS BID AND REQUESTED PERMISSION TO WITHDRAW ITS BID AND UPON BEING ADVISED THAT ITS BID BOND WOULD BE FORFEITED IF IT REFUSED TO PERFORM, THE COMPANY EXECUTED A WRITTEN CONTRACT IN ACCORDANCE WITH ITS BID AND NOTIFIED THE GOVERNMENT THAT IT WAS DOING SO UNDER PROTEST, ,RESERVING" ALL RIGHTS ARISING FROM THE ERROR IN ITS BID. SUBSEQUENTLY, THE COMPANY FILED 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 COMPANY DID SO "1NDER NO MISTAKE, FOR IT THEN KNEW ALL THE FACTS INCLUDING ITS FORMER MISTAKE" AND THAT THE COMPANY "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 ACQUIRE SUCH A RIGHT BY PURPORTING TO "RESERVE" IT. THIS IS WHAT IT HAS ATTEMPTED TO DO.' ALSO, SEE THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.CLS. 699, CERTIORARI DENIED MAY 28, 1945; AND 23 COMP. GEN. 596.

THE GOVERNMENT HAS RECEIVED IN THE PRESENT CASE ONLY THAT WHICH THE CONTRACT PROVIDED IT SHOULD RECEIVE AND HAVING PAID THE AGREED PRICE THEREFOR THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF AN AMOUNT IN ADDITION THERETO.