B-129082, SEP. 28, 1956

B-129082: Sep 28, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED AUGUST 24. WAS AWARDED A CONTRACT TO SUPPLY ITEM 3. WAS ASSIGNED TO THIS PURCHASE AND FORWARDED TO THE CORPORATION FOR SIGNATURE. THE PRESIDENT OF THE CORPORATION INFORMED THE PURCHASING AGENT BY TELEPHONE THAT THE CORPORATION HAD MADE A MISTAKE IN THAT THE PRICE IN ITS QUOTATION ON ITEM 3 WAS BASED ON AN ERRONEOUS COMPUTATION OF FREIGHT COSTS. THE PRESIDENT WAS RELUCTANT TO RETURN THE SIGNED CONTRACT. THE FACTORY WAS FIGURED BY US AT $3.60 PER DOZEN ON THIS ITEM NO. 3. * * * WE FIGURE THE WEIGHT AT 90 LBS. OUR BID SHOULD HAVE BEEN $4.97 PER DOZEN F.O.B. THE ALLEGED ORIGIN PRICE OF $3.60 PER DOZEN IS CONSISTENT WITH THE UNIT BASE PRICE OF $3.58 PER DOZEN FOR A SIMILAR ITEM UNDER A CONTRACT WITH THIS SAME CONTRACTOR DATED MARCH 2.

B-129082, SEP. 28, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED AUGUST 24, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), WHO REQUESTS A DECISION WHETHER RELIEF MAY BE GRANTED TO PENN KRAUT INC., CAMBRIDGE SPRINGS, PENNSYLVANIA, FOR AN ERROR IN BID IT ALLEGED AFTER AWARD OF CONTRACT NO. DA 30-079-QM- 17666, O.I. NY-34855-55.

BY LETTER DATED MAY 13, 1955, PENN KRAUT INC., CAMBRIDGE SPRINGS, PENNSYLVANIA, WAS AWARDED A CONTRACT TO SUPPLY ITEM 3, 3,000 DOZEN NO. 10 CANS OF SAUERKRAUT DELIVERED F.O.B. DESTINATION, FORT WORTH, TEXAS, AT $4.60 PER DOZEN, AND ITEM 4, 1,500 DOZEN NO. 10 CANS OF SAUERKRAUT DELIVERED F.O.B. DESTINATION, RICHMOND, VIRGINIA, AT $4.22 PER DOZEN. CONTRACT DA 30-079-QM-17666, O.I. NY-34855-55, WAS ASSIGNED TO THIS PURCHASE AND FORWARDED TO THE CORPORATION FOR SIGNATURE. ON JUNE 7, 1955, THE PRESIDENT OF THE CORPORATION INFORMED THE PURCHASING AGENT BY TELEPHONE THAT THE CORPORATION HAD MADE A MISTAKE IN THAT THE PRICE IN ITS QUOTATION ON ITEM 3 WAS BASED ON AN ERRONEOUS COMPUTATION OF FREIGHT COSTS. AS A RESULT OF THE ALLEGED ERROR, THE PRESIDENT WAS RELUCTANT TO RETURN THE SIGNED CONTRACT. HOWEVER, HE RETURNED IT AFTER BEING ADVISED THAT THE GOVERNMENT CONSIDERED A BINDING CONTRACT TO EXIST, THAT FAILURE TO RETURN THE EXECUTED CONTRACT WOULD BE REASON TO TERMINATE THE CONTRACT FOR DEFAULT WITH THE ASSESSMENT OF ANY RESULTING EXCESS COSTS, AND THAT THE ALLEGED ERROR WOULD BE CONSIDERED SEPARATELY AS A CLAIM AGAINST THE GOVERNMENT UPON RECEIPT OF A LETTER SETTING FORTH THE CORPORATION'S POSITION.

BY LETTER DATED JUNE 22, 1955, THE CORPORATION REQUESTED AN ADJUSTMENT IN PRICE AND STATED:

"OUR BASE PRICE F.O.B. THE FACTORY WAS FIGURED BY US AT $3.60 PER DOZEN ON THIS ITEM NO. 3. * * * WE FIGURE THE WEIGHT AT 90 LBS. PER DOZEN OR $1.37 PER DOZEN; PLUS $3.60 BASE PRICE. OUR BID SHOULD HAVE BEEN $4.97 PER DOZEN F.O.B. FT. WORTH, TEXAS.'

THE ALLEGED ORIGIN PRICE OF $3.60 PER DOZEN IS CONSISTENT WITH THE UNIT BASE PRICE OF $3.58 PER DOZEN FOR A SIMILAR ITEM UNDER A CONTRACT WITH THIS SAME CONTRACTOR DATED MARCH 2, 1955, AND THE ALLEGED FREIGHT RATE IS CONSISTENT WITH THE APPLICABLE TARIFF RATE OF $1.35 PER CWT. WHILE THE ERROR THUS MAY HAVE BEEN BONA FIDE, IT WAS NOT SO OBVIOUS THAT THE CONTRACTING OFFICER SHOULD HAVE DISCOVERED IT PRIOR TO AWARD, SINCE THE BIDDER'S QUOTATION WAS NOT OUT OF LINE WITH THE OTHER BIDS RECORDED ON THE NATIONAL SUMMARY PREPARED BY THE CHICAGO MARKET CENTER AND, MOREOVER, THERE WAS NO DUTY ON THE PART OF THE CONTRACTING OFFICER TO CHECK THE FREIGHT RATES TO THE VARIOUS DESTINATIONS WHEN THE BID WAS REQUIRED TO BE SUBMITTED ON AN F.O.B. DESTINATION BASIS.

THE RESPONSIBILITY FOR PREPARATION OF A BID IS UPON THE BIDDER, 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 BIDDER'S CARELESSNESS, NEGLIGENCE 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 ACCEPTANCE 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 BIDDER 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 THE MATTER.

THE ENCLOSURES RECEIVED WITH THE LETTER OF AUGUST 24, ARE RETURNED HEREWITH.