B-128970, SEPTEMBER 4, 1956, 36 COMP. GEN. 191

B-128970: Sep 4, 1956

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BIDS - MISTAKES - BIDDER'S LIABILITY UPON ACCEPTANCE A CONTRACTOR WHO EFFECTED COMPLETE DELIVERY WITHOUT ANY OBJECTION OR CLAIM OF MISTAKE IN THE PRICE STATED IN THE PURCHASE ORDER IS PRECLUDED. 1956: REFERENCE IS MADE TO A LETTER DATED AUGUST 13. DECISION IS REQUESTED AS TO WHETHER THE CONTRACTOR MAY BE GRANTED RELIEF IN THIS CASE. ORAL QUOTATIONS WERE SOLICITED BY THE OAKLAND AND LOS ANGELES QUARTERMASTER MARKET CENTERS. QUOTATIONS RECEIVED WERE RECORDED BY THE PURCHASING AGENT IN THE AMOUNTS OF $1.34. IT IS REPORTED THAT. SINCE IT IS THE PRACTICE OF PROCUREMENT PERSONNEL AT THE OAKLAND QUARTERMASTER MARKET CENTER TO REPEAT TELEPHONE QUOTATIONS. SINCE THE DIFFERENCE IN PRICE BETWEEN THE SUBJECT VENDOR'S QUOTATION AND THE QUOTATIONS OF THE OTHER VENDORS WAS NOT SO SUBSTANTIAL AS TO RAISE A SUSPICION THAT A MISTAKE HAD BEEN MADE.

B-128970, SEPTEMBER 4, 1956, 36 COMP. GEN. 191

BIDS - MISTAKES - BIDDER'S LIABILITY UPON ACCEPTANCE A CONTRACTOR WHO EFFECTED COMPLETE DELIVERY WITHOUT ANY OBJECTION OR CLAIM OF MISTAKE IN THE PRICE STATED IN THE PURCHASE ORDER IS PRECLUDED, UPON A SUBSEQUENT ALLEGATION OF ERROR, FROM RECEIVING ANY AMOUNT IN EXCESS OF THE PRICE STATED IN THE PURCHASE ORDER.

TO THE SECRETARY OF THE ARMY, SEPTEMBER 4, 1956:

REFERENCE IS MADE TO A LETTER DATED AUGUST 13, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), RELATING TO A MISTAKE IN BID ALLEGED BY THE BING CROSBY MINUTE MAID CORPORATION, LOS ANGELES, CALIFORNIA, AFTER THE AWARD OF PURCHASE ORDER NO. OAK 22849-55, DATED JUNE 1, 1955, AND DELIVERY OF THE SUPPLIES CALLED FOR THEREUNDER. DECISION IS REQUESTED AS TO WHETHER THE CONTRACTOR MAY BE GRANTED RELIEF IN THIS CASE.

IT APPEARS FROM THE RECORD THAT UNDER DATE OF MAY 24, 1955, ORAL QUOTATIONS WERE SOLICITED BY THE OAKLAND AND LOS ANGELES QUARTERMASTER MARKET CENTERS, U.S. ARMY, FOR FURNISHING 2,735 DOZEN 6-OUNCE. CANS FROZEN LEMONADE JUICE, EITHER MINUTE MAID, BIRDSEYE, OR SUNKIST BRANDS, DELIVERY TO BE EFFECTED ON JUNE 16, 1955. QUOTATIONS RECEIVED WERE RECORDED BY THE PURCHASING AGENT IN THE AMOUNTS OF $1.34, $1.20, AND $1.123 PER DOZEN CANS, THE LOW BID HAVING BEEN SUBMITTED BY THE BING CROSBY MINUTE MAID CORPORATION, THROUGH ITS SAN FRANCISCO AGENT WITTENBERG ROSS.

IT IS REPORTED THAT, SINCE IT IS THE PRACTICE OF PROCUREMENT PERSONNEL AT THE OAKLAND QUARTERMASTER MARKET CENTER TO REPEAT TELEPHONE QUOTATIONS, AFTER RECORDING THE SAME ON THE SUMMARY OF OFFERINGS, AND SINCE THE DIFFERENCE IN PRICE BETWEEN THE SUBJECT VENDOR'S QUOTATION AND THE QUOTATIONS OF THE OTHER VENDORS WAS NOT SO SUBSTANTIAL AS TO RAISE A SUSPICION THAT A MISTAKE HAD BEEN MADE, THE CONTRACTING OFFICER DID NOT ASK THE SUBJECT VENDOR TO VERIFY ITS QUOTATION. ACCORDINGLY, ON MAY 24, 1955, NOTICE OF AWARD WAS GIVEN TO THE BING CROSBY MINUTE MAID CORPORATION BY TELEPHONE AND PURCHASE ORDER NO. OAK 22849-55 WAS PREPARED FOR 2,735 DOZEN CANS OF LEMONADE JUICE AT $1.123 PER DOZEN CANS, EXTENDED TO $3,071.41, AND THE SAME MAILED TO THE VENDOR ON JUNE 1, 1955. ON JUNE 16, 1955, THE VENDOR COMPLETED SHIPMENT OF 2,736 DOZEN CANS OF MINUTE MAID LEMONADE JUICE TO THE ALAMEDA COLD STORAGE PLANT.

THE CONTROVERSY IN THIS CASE GROWS OUT OF THE CONTRACTOR'S CONTENTION THAT ITS BID PRICE WAS $1.23 PER DOZEN CANS INSTEAD OF THE PRICE OF 1.123 PER DOZEN CANS SET FORTH IN THE PURCHASE ORDER. IN LETTER OF JULY 14, 1955, THE CONTRACTOR ALLEGED THAT ITS TELEPHONICALLY QUOTED PRICE HAD BEEN $1.23 PER DOZEN CANS; THAT MR. J. B. BRUZZONE, PURCHASING AGENT AT THE OAKLAND QUARTERMASTER CENTER, HAD READ BACK A PRICE OF $1.123 PER DOZEN CANS; THAT THE ERROR WAS CALLED TO MR. BRUZZONE'S ATTENTION AND THAT HE HAD PROMISED TO CORRECT THE MISTAKE. THERE WAS TRANSMITTED HERE AN AFFIDAVIT EXECUTED BY MR. BRUZZONE STATED THAT A MR. ROSS--- REPRESENTATIVE OF THE CONTRACTOR--- QUOTED A PRICE OF $1.123 PER DOZEN CANS AND THAT THIS PRICE, IN ACCORDANCE WITH THE USUAL PRACTICE, WAS READ BACK TO MR. ROSS, BOTH AT THE TIME OF THE RECEIPT OF THE QUOTATION AND AT THE TIME OF THE TELEPHONIC NOTICE OF AWARD OF MAY 24, 1955, AND THAT MR. ROSS DID NOT AT EITHER TIME QUESTION THE PRICE OF $1.123 PER DOZEN CANS.

IN COMMENTING UPON THE FOREGOING ALLEGATIONS, MR. HORATIO R. ROGERS, OFFICE OF THE QUARTERMASTER GENERAL, STATED IN SECOND ENDORSEMENT DATED JULY 16, 1956, AMONG OTHER THINGS, THAT---

EVEN IF THE CONVERSATION WAS AS ALLEGED BY THE CONTRACTOR AND, THROUGH A MISUNDERSTANDING BY THE PURCHASING AGENT, THE PURCHASE ORDER DID NOT CONFORM TO THE CONTRACTOR'S QUOTE, THE CONTRACTOR BY DELIVERING THE ITEMS MUST BE DEEMED TO HAVE ACCEPTED THE PURCHASE ORDER.

THE PURCHASE ORDER ISSUED IN THIS CASE CLEARLY SPECIFIED A UNIT PRICE OF $1.123 PER DOZEN CANS AND A TOTAL CONTRACT PRICE OF $3,071.41. IN VIEW OF THE CONTRACTOR'S STATEMENT THAT AT THE TIME OF THE TELEPHONIC QUOTATION THE DIFFERENCE IN PRICES WAS DISCUSSED, IT IS FAIR TO ASSUME THAT A REASONABLE MAN WOULD HAVE TAKEN STEPS TO ASCERTAIN WHETHER THE PRICE SET FORTH IN THE PURCHASE ORDER WAS THAT INTENDED. IT HAS BEEN HELD THAT A CONTRACTING PARTY MUST OBSERVE WHAT HE HAS REASONABLE OPPORTUNITY FOR KNOWING AND THAT A PERSON IS PRESUMED TO KNOW THESE THINGS WHICH REASONABLE DILIGENCE ON HIS PART WOULD BRING TO HIS ATTENTION. VARGAS V. UNITED STATES, 166 F.2D 651. WHETHER WE ACCEPT MR. BRUZZONE'S OR THE CONTRACTOR'S VERSION OF THE DETAILS OF THEIR CONVERSATION IN CONNECTION WITH THE ORIGINAL QUOTATION, THE UNDISPUTED FACT IS THAT THE PURCHASE ORDER WAS RECEIVED BY THE CONTRACTOR AND COMPLETE DELIVERY EFFECTED BY IT WITHOUT ANY WORD OF OBJECTION OR CLAIM OF MISTAKE IN THE PRICE STATED IN THE ORDER. THE GENERAL RULE IS TO THE EFFECT THAT AN ORDER FOR GOODS IS ACCEPTED BY THE SHIPMENT, WITHIN A REASONABLE TIME, OF THE GOODS CONSIGNED TO THE BUYER IN ACCORDANCE WITH THE TERMS OF THE ORDER, SUCH AN ACT BEING REGARDED AS A SIGNIFICATION OF THE SELLER'S ACCEPTANCE AND APPROVAL OF THE CONTRACT, SUFFICIENT, WITHOUT MORE, TO RENDER IT COMPLETE AND ENFORCEABLE, 19 A.L.R. 476. SEE EMERSON-1BRANTINGHAM IMPLEMENT COMPANY V. LAWSON, 237 FED. 877, AND LANG AND GROS MANUFACTURING COMPANY V. FT. WAYNE CORRUGATED PAPER COMPANY, 278 FED. 483. THAT THE DELIVERY WAS IN FACT MADE ON THE BASIS OF THE ORDER IN QUESTION IS ESTABLISHED BY THE FACT THAT THE CONTRACTOR'S INVOICE CITED THE ORDER NUMBER.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE APPEARS TO BE NO BASIS FOR ALLOWING THE ADDITIONAL COMPENSATION CLAIMED IN THIS CASE OR ANY AMOUNT IN EXCESS OF THE PRICE STATED IN THE PURCHASE ORDER.

THE PAPERS TRANSMITTED WITH THE LETTER OF AUGUST 13, 1956, ARE RETURNED HEREWITH.