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B-128659, AUG. 2, 1956

B-128659 Aug 02, 1956
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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED JULY 17. ALLEGES IT MADE IN ITS QUOTATION ON WHICH PURCHASE ORDER RM6-401-3868 IS BASED. AWARD WAS MADE TO INSTRUMENT SERVICE COMPANY BY PURCHASE ORDER RM6-401- 3868. IT WAS ADVISED CONCERNING THE PROCEDURE TO BE FOLLOWED IN ASSERTING ITS CLAIM. CONFIRMS THE PRIOR ORAL QUOTATION ON WHICH THE PRICE OFFERED THE GOVERNMENT WAS BASED. THE CORRECT PRICE FOR THE GAUGE WITH STAINLESS STEEL TUBING IS STATED AS $200.50 PER UNIT. THE VENDOR ALLEGES THAT ITS ATTEMPT TO RECTIFY THIS SITUATION WITH ITS SUPPLIER WAS UNSUCCESSFUL. IT WAS PERPETUATED BY THE VENDOR. A REASONABLE AND PRUDENT EXAMINATION PROMPTLY MADE BY THE VENDOR WOULD HAVE REVEALED TO IT THE OBVIOUS ERROR ON THE FACE OF THE SUPPLIER'S CONFORMATION ON MARCH 12.

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B-128659, AUG. 2, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JULY 17, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), WHO REQUESTS A DECISION REGARDING AN ERROR INSTRUMENT SERVICE COMPANY, DENVER, COLORADO, ALLEGES IT MADE IN ITS QUOTATION ON WHICH PURCHASE ORDER RM6-401-3868 IS BASED.

BY REQUEST FOR QUOTATION 05-021-56-100-2, DATED MARCH 2, 1956, THE CHEMICAL CORPS, ROCKY MOUNTAIN ARSENAL, ASKED TO BE RETURNED TO IT, ON OR BEFORE MARCH 12, 1956, A PRICE QUOTATION ON FOUR HELICOID GAUGES COMPLETE WITH STAINLESS STEEL CAPILLARY TUBING. ON MARCH 9, 1956, INSTRUMENT SERVICE COMPANY QUOTED $162 PER UNIT. EDWIN P. COOK, THE ONLY OTHER DEALER SUBMITTING A PRICE, QUOTED $237.13 PER UNIT. ON MARCH 20, 1956, AWARD WAS MADE TO INSTRUMENT SERVICE COMPANY BY PURCHASE ORDER RM6-401- 3868.

ON APRIL 20, 1956, WHEN THE VENDOR TELEPHONED THE CONTRACTING OFFICER AND ALLEGED AN ERROR IN BID, IT WAS ADVISED CONCERNING THE PROCEDURE TO BE FOLLOWED IN ASSERTING ITS CLAIM. BY LETTER DATED APRIL 25, 1956, THE VENDOR CLAIMED AN ADDITIONAL $38.50 PER UNIT ON THE BASIS THAT IT HAD UNDERESTIMATED ITS QUOTATION TO THE GOVERNMENT BECAUSE OF AN ERRONEOUS TELEPHONIC QUOTATION RECEIVED FROM ITS SUPPLIER, HELICOID GAGE DIVISION, AMERICAN CHAIN AND CABLE COMPANY.

IN SUPPORT OF ITS ALLEGATIONS, THE VENDOR HAS SUBMITTED LETTERS TO IT FROM THE HELICOID GAGE DIVISION. THE LETTER DATED MARCH 12, 1956, CONFIRMS THE PRIOR ORAL QUOTATION ON WHICH THE PRICE OFFERED THE GOVERNMENT WAS BASED, AND QUOTES $160.25 PER UNIT (LESS JOBBER'S DISCOUNT) FOR THE GAUGE WITH BRONZE TUBING. HOWEVER, THE LETTER DATED APRIL 18, 1956, ADMITS A MISUNDERSTANDING AND INCORRECT MATERIAL QUOTATION IN THE PRICE PREVIOUSLY FURNISHED. THE CORRECT PRICE FOR THE GAUGE WITH STAINLESS STEEL TUBING IS STATED AS $200.50 PER UNIT. THE VENDOR ALLEGES THAT ITS ATTEMPT TO RECTIFY THIS SITUATION WITH ITS SUPPLIER WAS UNSUCCESSFUL.

BY FIRST INDORSEMENT DATED JUNE 12, 1956, IT APPEARS THAT THE ROCKY MOUNTAIN ARSENAL HAS NEVER PROCURED THIS GAUGE BEFORE, AND THAT THE ITEM HAS NO COMMERCIAL CATALOG LISTING.

THE ERROR AROSE FROM A MISUNDERSTANDING BETWEEN THE VENDOR AND ITS SUPPLIER. IT APPEARS THAT THE ERROR ORIGINATED WITH THE SUPPLIER; HOWEVER, IT WAS PERPETUATED BY THE VENDOR. A REASONABLE AND PRUDENT EXAMINATION PROMPTLY MADE BY THE VENDOR WOULD HAVE REVEALED TO IT THE OBVIOUS ERROR ON THE FACE OF THE SUPPLIER'S CONFORMATION ON MARCH 12, 1956, SINCE THE TYPE OF TUBING MATERIAL ON WHICH THE CONFORMATION IS BASED IS BRONZE RATHER THAN STAINLESS STEEL AS CLEARLY STATED IN THE GOVERNMENT SPECIFICATIONS. HOWEVER, THE VENDOR ALLOWED THIS OBVIOUS ERROR TO EXIST UNCHECKED FOR OVER A MONTH AFTER AWARD. THE GOVERNMENT WAS IN NO WAY A PARTY OR CONTRIBUTOR TO THE MISUNDERSTANDING, SINCE ITS REQUIREMENTS WERE CLEAR AND UMAMBIGUOUS AND THE TRANSACTIONS BETWEEN THE VENDOR AND SUPPLIER OCCURRED WITHOUT THE KNOWLEDGE OF THE CONTRACTING OFFICER.

IN RESPONSE TO A REQUEST FOR QUOTATION, IT IS THE RESPONSIBILITY OF THE VENDOR TO ASCERTAIN AND QUOTE A PRICE THAT WILL ALLOW IT A REASONABLE PROFIT, SINCE THE GOVERNMENT IS NOT LIABLE FOR ANY LOSS WHICH RESULTS FROM AN IMPROVIDENT QUOTATION. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. THE MISTAKE WAS DUE TO THE VENDOR'S NEGLIGENCE, CARELESSNESS OR OVERSIGHT; IT WAS NOT INDUCED BY THE GOVERNMENT; AND THERE WAS NOTHING TO MAKE THE CONTRACTING OFFICER SUSPECT THAT THE QUOTATION WAS NOT MADE AS INTENDED. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61; AND 3 WILLISTON ON SALES 654. THEREFORE, THE GOOD FAITH ISSUANCE OF THE PURCHASE ORDER 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 VENDOR IS NOT ENTITLED TO ANY REDRESS FOR THE CONSEQUENCES OF ITS UNILATERAL MISTAKE. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND 3 WILLISTON ON SALES 656.

ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE IS NO LEGAL BASIS TO GRANT ANY RELIEF IN THIS MATTER.

ONE COPY OF THE SUBMISSION AND ENCLOSURES WILL BE RETAINED IN OUR FILES; THE OTHER IS RETURNED HEREWITH.

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