B-129331, OCT. 10, 1956

B-129331: Oct 10, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 24. DA-/S/-04-197-AVI-172 WAS AWARDED. WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $2. WAS ACCEPTED AS TO ITEMS 3 AND 5 ON JUNE 28. AN ERROR WAS MADE BY OUR ACCOUNTANT. LETTER IS ATTACHED. THE FOLLOWING PRICES WERE ROUGHED IN ON PAGE NO. 5. THE ORIGINAL OF WHICH IS ATTACHED. ALL PRICES WERE INCREASED AS FOLLOWS. ITEMS NO. 3 AND NO. 5 WERE POINTED OFF INCORRECTLY. IT WAS COMPUTED AT $5.50 PER HUNDRED. "THE TWO ITEMS THAT WE WERE AWARDED ARE THE MOST INVALUABLE ITEMS OF THE 5 ITEMS. BIDS THAT WERE FILED IN THE PAST. YOU WILL SEE THAT THIS PRICE IS BY FAR IN ERROR. "DUE TO THIS ERROR WE WILL SUFFER A SUBSTANTIAL LOSS AND WE THEREFORE ASK THAT WE HAVE AN OPPORTUNITY TO CORRECT THIS ERROR.

B-129331, OCT. 10, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 24, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING ERRORS THE PROGRESS TALLOW COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-/S/-04-197-AVI-172 WAS AWARDED.

THE PROPERTY DISPOSAL BRANCH, AUXILIARY SERVICES DIVISION, OAKLAND ARMY TERMINAL, OAKLAND, CALIFORNIA, BY INVITATION NO. AVI-04-197-S-56 50REQUESTED BIDS--- TO BE OPENED JUNE 5, 1956--- FOR THE PURCHASE AND REMOVAL FROM CERTAIN ARMY POSTS OF ESTIMATED QUANTITIES OF FIVE ITEMS OF WASTE GREASE AND BONES DURING THE PERIOD JULY 1, 1956, THROUGH JUNE 30, 1957. IN RESPONSE THE PROGRESS TALLOW COMPANY SUBMITTED A BID DATED JUNE 5, 1956, OFFERING TO PURCHASE ITEM 1 AT A PRICE OF $0.026 PER POUND; ITEM 2 AT A PRICE OF $0.0401 PER POUND; ITEM 3 AT A PRICE OF $0.055 PER POUND; ITEM 4 AT A PRICE OF $0.0139 PER POUND; AND ITEM 5 AT A PRICE OF $0.055 PER POUND. THE BID OF THE COMPANY, WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $2,351.48, WAS ACCEPTED AS TO ITEMS 3 AND 5 ON JUNE 28, 1956.

BY LETTER DATED AUGUST 1, 1956, THE COMPANY ADVISED AS FOLLOWS:

"IN COMPUTING THE ABOVE BID, AN ERROR WAS MADE BY OUR ACCOUNTANT. LETTER IS ATTACHED, SIGNED BY OUR ACCOUNTANT, CARLO J. MAGOKIA, VERIFYING SUCH AN ERROR.

"WHEN WE FIRST RECEIVED YOUR INVITATION NO. AVI-04-197-S-56-50, THE FOLLOWING PRICES WERE ROUGHED IN ON PAGE NO. 5. THE ORIGINAL OF WHICH IS ATTACHED.

TABLE

ITEM NO. 1 COOKED GREASE 2 1/2 CENTS PER POUND

NO. 2 FATS 4 DO. DO. DO.

NO. 3 COOKED BONES 1/2 DO. DO. DO.

NO. 4 UNCOOKED BONES 1 1/4 DO. DO. DO.

NO. 5 TRAP GREASE 1/2 DO. DO. DO.

"AFTER REVIEWING THE BID BEFORE MAILING IT IN, ALL PRICES WERE INCREASED AS FOLLOWS;

TABLE

ITEM NO. 1 COOKED GREASE 2.6 CENTS PER POUND

NO. 2 FATS 4.01 DO. DO. DO.

NO. 3 COOKED BONES 55 CENTS PER HUNDRED

NO. 4 UNCOOKED BONES 1.39 CENTS PER POUND

NO. 5 TRAP GREASE 55 CENTS PER HUNDRED

"IN WRITING UP THE BID, ITEMS NO. 3 AND NO. 5 WERE POINTED OFF INCORRECTLY. INSTEAD OF RAISING IT FROM 50 CENTS A HUNDRED TO 55 CENTS A HUNDRED, IT WAS COMPUTED AT $5.50 PER HUNDRED.

"THE TWO ITEMS THAT WE WERE AWARDED ARE THE MOST INVALUABLE ITEMS OF THE 5 ITEMS, AND THROUGH AN ERROR IN COMPUTING IT HAS BECOME THE HIGHEST IN PRICE. WE BELIEVE THAT IF YOU CHECK THE OTHER BIDS, AND BIDS THAT WERE FILED IN THE PAST, YOU WILL SEE THAT THIS PRICE IS BY FAR IN ERROR.

"DUE TO THIS ERROR WE WILL SUFFER A SUBSTANTIAL LOSS AND WE THEREFORE ASK THAT WE HAVE AN OPPORTUNITY TO CORRECT THIS ERROR, OR THAT OUR BID BE VOIDED.

"ANY CONSIDERATION THAT YOU CAN GIVE US TO ADJUST THIS ERROR WILL BE GREATLY APPRECIATED.'

THE COMPANY ALLEGES THAT IN COMPUTING THE UNIT PRICE FOR THE TRAP GREASE COVERED BY ITEM 5, IT MISPLACED A DECIMAL POINT IN THAT PRICE. THE ABSTRACT OF BIDS SHOWS THAT THREE OF THE FOUR OTHER BIDDERS ON ITEM 5 QUOTED PRICES OF $0.04, $0.0075 AND $0.0061 PER POUND AND THAT THE FOURTH BIDDER DID NOT OFFER ANY COMPENSATION FOR THE TRAP GREASE COVERED BY ITEM 5, BUT THAT IT DID OFFER TO HAUL THE GREASE AWAY. THE DIFFERENCE BETWEEN THE BID OF THE PROGRESS TALLOW COMPANY OF $0.055 PER POUND ON ITEM 5 AND THE NEXT HIGHEST BID RECEIVED ON THAT ITEM IS NOT SO GREAT AS TO JUSTIFY A CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID OF THE COMPANY. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN INDICATED BY THE BID AND NONE HAVING BEEN ALLEGED UNTIL AFTER AWARD. ALTHOUGH, AFTER AWARD, THE COMPANY FURNISHED THE WRITTEN COPY OF ITS BID IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD ANY KNOWLEDGE OF THE INFORMATION CONTAINED ON SAID WRITTEN COPY OF THE BID. CONSEQUENTLY, THERE WOULD APPEAR TO BE NO BASIS ON WHICH IT COULD BE HELD THAT THE ACCEPTANCE OF THE BID DID NOT CONSUMMATE A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF, AS STATED IN ITS LETTER OF AUGUST 1, 1956, THE COMPANY MADE AN ERROR INVOLVING THE MISPLACEMENT OF A DECIMAL POINT IN THE UNIT PRICE FOR ITEM 5, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL- -- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, ON THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFYING THE PRICE SPECIFIED IN CONTRACT NO. DA-/S/-04-197 AVI-172 FOR THE TRAP GREASE COVERED BY ITEM 5, AS REQUESTED BY THE PROGRESS TALLOW COMPANY.

THE COMPANY ALLEGES FURTHER THAT IN COMPUTING ITS UNIT BID PRICE FOR THE COOKED BONES COVERED BY ITEM 3, THE SAME TYPE OF ERROR WAS MADE AS IN THE CASE OF ITEM 5. THE ABSTRACT OF BIDS SHOWS THAT FOR THE COOKED BONES COVERED BY ITEM 3, THREE OF THE FOUR OTHER BIDDERS QUOTED PRICES OF $0.01, $0.0075 AND $0.0061 PER POUND AND THAT THE FOURTH BIDDER DID NOT OFFER ANY COMPENSATION FOR THE COOKED BONES, BUT THAT IT DID OFFER TO HAUL THE BONES AWAY. IN VIEW OF THE DIFFERENCE BETWEEN THE BID OF THE PROGRESS TALLOW COMPANY OF $0.055 PER POUND FOR ITEM 3 AND THE OTHER BIDS THEREON, AND IN VIEW OF THE LIMITED USES TO WHICH THE WASTE MATERIAL INVOLVED COULD BE PUT, THE POSSIBILITY OF ERROR WAS APPARENT AND, UNDER THE CIRCUMSTANCES, THE BID AS TO ITEM 3 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

ON THE RECORD, THERE IS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID AS TO ITEM 3, AS ALLEGED, AND THAT THE PROBABILITY OF ERROR WAS SO OBVIOUS THAT ITS ACCEPTANCE, WITHOUT VERIFICATION, SHOULD NOT BE CONSIDERED AS CREATING A BINDING CONTRACT. ACCORDINGLY, ITEM 3 OF CONTRACT NO. DA-/S/-04-197-AVI-172 SHOULD BE CANCELLED, AND THE PRICE FOR ANY COOKED BONES PICKED UP AND PAID FOR BY THE COMPANY MAY BE ADJUSTED TO THE AMOUNT OF THE NEXT HIGHEST BID RECEIVED ON THAT ITEM AND APPROPRIATE REFUND MADE TO THE COMPANY.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE REFUND.

THE PAPERS, WITH THE EXCEPTION OF THE ABSTRACT OF BIDS AND THE CONTRACTING OFFICER'S STATEMENT DATED JULY 14, 1956, ARE RETURNED.