B-128601, JUL. 31, 1956

B-128601: Jul 31, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JULY 11. IT IS STATED IN THE LETTER THAT THERE APPEARS TO BE NO BASIS FOR YOUR DEPARTMENT TO GRANT ADMINISTRATIVELY THE RELIEF REQUESTED BY THE CONTRACTOR. A DECISION IS REQUESTED WITH RESPECT TO THE CONTRACTOR'S APPLICATION FOR RELIEF. AWARD OF THE CONTRACT WAS MADE TO THE OGDEN DOOR COMPANY ON MARCH 22. THE CONTRACTOR VERBALLY NOTIFIED HIM OF AN ALLEGED MISTAKE IN BID RESULTING FROM A MISUNDERSTANDING WITH ITS SUPPLIER AS TO THE GRADE OF LUMBER ON WHICH THE QUOTATION WAS BASED. PARAGRAPH 5 OF THE CONTRACTING OFFICER'S FINDINGS AND RECOMMENDATIONS IS. AS FOLLOWS: "* * * THE ITEM OF 1 INCH BY 4 INCHES IN NO. 3 COMMON OR OTHER COMMON GRADES IS AN ITEM WHICH ACCUMULATES FROM THE PRODUCTION OF WIDER SIZES RATHER THAN BEING AN ITEM WHICH A PRODUCER SPECIFICALLY TRIES TO PRODUCE.

B-128601, JUL. 31, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JULY 11, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), RELATING TO A MISTAKE IN BID ALLEGED BY THE OGDEN DOOR COMPANY, OGDEN, UTAH, AFTER THE AWARD OF CONTRACT NO. DA-35-026-ENG-27206, DATED MARCH 22, 1956. IT IS STATED IN THE LETTER THAT THERE APPEARS TO BE NO BASIS FOR YOUR DEPARTMENT TO GRANT ADMINISTRATIVELY THE RELIEF REQUESTED BY THE CONTRACTOR, UNDER THE PROCEDURE SET FORTH IN OUR LETTERS OF JULY 28, 1955, AND JANUARY 6, 1956, B-123539, AND, ACCORDINGLY, A DECISION IS REQUESTED WITH RESPECT TO THE CONTRACTOR'S APPLICATION FOR RELIEF.

THE RECORD SHOWS THAT BY INVITATION NO. ENG-35-026-56-147, DATED MARCH 8, 1956, THE DISTRICT ENGINEER, CORPS OF ENGINEERS, PORTLAND, OREGON, REQUESTED BIDS--- TO BE OPENED ON MARCH 20, 1956--- FOR FURNISHING, AMONG OTHER ITEMS, 38,000 FEET, BOARD MEASURE, OF 1 BY 4 LUMBER, OF ANY OF SEVERAL GRADES AND SPECIES, INCLUDING NO. 3 COM. WPA, D. FIR ON LARCH, COVERED BY ITEM 1 OF THE INVITATION. IN RESPONSE THERETO, THE OGDEN DOOR COMPANY SUBMITTED A BID DATED MARCH 14, 1956, OFFERING TO FURNISH THE DESIRED QUANTITY OF NO. 3 COMMON DOUGLAS FIR OR LARCH AT THE PRICE OF $48.80 PER THOUSAND FEET. AWARD OF THE CONTRACT WAS MADE TO THE OGDEN DOOR COMPANY ON MARCH 22, 1956.

THE CONTRACTING OFFICER REPORTS THAT AFTER THE RECEIPT OF THE CONTRACT, THE CONTRACTOR VERBALLY NOTIFIED HIM OF AN ALLEGED MISTAKE IN BID RESULTING FROM A MISUNDERSTANDING WITH ITS SUPPLIER AS TO THE GRADE OF LUMBER ON WHICH THE QUOTATION WAS BASED, THE SUPPLIER INSISTING THAT ITS QUOTATION, BY TELEPHONE, OF THE $48.80 FIGURE HAD BEEN ON NO. 4 GRADE. SUBSEQUENTLY THE CONTRACTOR CONFIRMED VERBAL NOTIFICATION OF THE ALLEGED MISTAKE AND FURNISHED CERTAIN INFORMATION IN SUPPORT THEREOF, INCLUDING A STATEMENT FROM THE SUPPLIER. PARAGRAPH 5 OF THE CONTRACTING OFFICER'S FINDINGS AND RECOMMENDATIONS IS, IN PART, AS FOLLOWS:

"* * * THE ITEM OF 1 INCH BY 4 INCHES IN NO. 3 COMMON OR OTHER COMMON GRADES IS AN ITEM WHICH ACCUMULATES FROM THE PRODUCTION OF WIDER SIZES RATHER THAN BEING AN ITEM WHICH A PRODUCER SPECIFICALLY TRIES TO PRODUCE. BECAUSE OF THIS, IT IS AN ACCEPTED FACT THAT SUPPLIERS HAVING AN OVERSTOCK OF 1 INCH BY 4 INCHES NO. 3 COMMON AND OTHER COMMON GRADES IN THIS SIZE WILL OCCASIONALLY QUOTE VERY LOW PRICES WHICH ARE NOT IN LINE WITH THE TREND OF BIDS RECEIVED IN ORDER TO DISPOSE OF SUCH EXCESS STOCK. THEREFORE, IT IS NOT CONSIDERED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT A MISTAKE WAS OBVIOUS.'

THIS STATEMENT IS CORROBORATED BY THE CONTRACTOR'S OWN LETTER OF APRIL 26, 1956, IN WHICH IT IS STATED: "I REALIZE THAT THE FIGURE OF $49.00 WAS LOW, AS MR. GRANT POINTED OUT THAT I SHOULD HAVE. HOWEVER, IT IS NOT TOO UNUSUAL THAT 1 BY 4 IS A SURPLUS ITEM AND IS SOMETIMES THAT LOW WHEN A MILL GETS OVER STOCKED WITH IT.'

UNDER THE FACTS REPORTED, IT DOES NOT APPEAR THAT THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID PRICE ON ITEM 1 OF $48.80 AND THE OTHER BIDS, WHICH RANGED FROM $58 TO $84.15, WAS SO GREAT AS TO JUSTIFY THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABILITY OF ERROR. IT FOLLOWS THAT THE ACCEPTANCE OF THE BID OF THE OGDEN DOOR COMPANY WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY IT UNTIL AFTER THE AWARD OF THE CONTRACT--- AND THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS 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 RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION TO BID IS UPON THE BIDDER. SEE FRAZIER DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF AN ERROR WAS MADE IN THE PREPARATION OF THE BID, AS ALLEGED, IT PROPERLY MAY BE ATTRIBUTED SOLELY TO THE CONTRACTOR'S NEGLIGENCE AND SINCE THE ERROR UPON WHICH THE REQUEST FOR RELIEF IS BASED WAS UNILATERAL, NOT MUTUAL, THE CONTRACTOR IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATIONS UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE PAPERS TRANSMITTED WITH THE LETTER OF JULY 11, 1956, WITH THE EXCEPTION OF THE CONTRACTING OFFICERS' FINDINGS AND RECOMMENDATIONS, AND FIRST ENDORSEMENT DATED JUNE 5, 1956, BY THE OFFICE OF THE DIVISION ENGINEER, ARE RETURNED HEREWITH.