B-129441, OCT. 29, 1956

B-129441: Oct 29, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED OCTOBER 3. DA-35-026-ENG-27758 WHICH WAS AWARDED TO THE COMPANY ON THE BASIS OF THE UNCORRECTED BID PRICE. THE FILE SUBMITTED WITH THE ASSISTANT SECRETARY'S LETTER INDICATES THAT BIDS FOR VARIOUS TYPES AND QUANTITIES OF LUMBER WERE SOLICITED ON MAY 1. THE LOW BID IN THE AMOUNT OF $58.00 PER MFBM WAS SUBMITTED BY B. TWELVE OTHER BIDS RANGING IN AMOUNTS FROM $68.00 TO $86.00 WERE ALSO RECEIVED ON SCHEDULE T. INFORMED HIM AT THE SAME TIME THAT SUCH PRICE WAS CONSIDERED LOW. SCHRADER THEN STATED THAT HE REALIZED HIS PRICE WAS LOW. UNDER CONTRACT DA-35- 026-ENG-27758 WAS MADE LATER ON THE SAME DAY. THE CONTRACTOR ADVISED BY TELEPHONE THAT HE BELIEVED A TYPOGRAPHICAL ERROR HAD BEEN MADE IN HIS BID AND HE WOULD LIKE TO HAVE THE AWARD CANCELLED.

B-129441, OCT. 29, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 3, 1956, FROM THE ASSISTANT SECRETARY (LOGISTICS), FORWARDING AN ALLEGATION OF ERROR IN THE BID SUBMITTED BY B. L. SCHRADER, INC., UNDER IFB NO. ENG-35-026-56 203, AND REQUESTING OUR DECISION AS TO WHETHER AN ADJUSTMENT MAY BE MADE IN THE PRICE OF CONTRACT NO. DA-35-026-ENG-27758 WHICH WAS AWARDED TO THE COMPANY ON THE BASIS OF THE UNCORRECTED BID PRICE.

THE FILE SUBMITTED WITH THE ASSISTANT SECRETARY'S LETTER INDICATES THAT BIDS FOR VARIOUS TYPES AND QUANTITIES OF LUMBER WERE SOLICITED ON MAY 1, 1956, AND OPENED ON MAY 29, 1956. SCHEDULE T, WHICH ACCOMPANIED THE IFB, REQUESTED BIDS UNDER ITEM 1 ON 55,000 FBM, SIZE 2 BY 10, SIX FEET AND UP, AVERAGING TWELVE FEET, WITH NOT TO EXCEED 5 PERCENT OF THE SIX FOOT LENGTH. THE LOW BID IN THE AMOUNT OF $58.00 PER MFBM WAS SUBMITTED BY B. L. SCHRADER, INC. TWELVE OTHER BIDS RANGING IN AMOUNTS FROM $68.00 TO $86.00 WERE ALSO RECEIVED ON SCHEDULE T.

IN VIEW OF THE PRICE QUOTED BY THE LOW BID, THE SUPERVISOR, AWARD UNIT, PURCHASE SECTION, LUMBER BRANCH, CONTACTED MR. B. L. SCHRADER BY TELEPHONE ON JUNE 4, 1956, AND REQUESTED THAT HE OBTAIN HIS COPY OF IFB 57-203, SCHEDULE T. THE SUPERVISOR THEN READ THE DESCRIPTION OF THE LUMBER COVERED BY ITEM 1 TO MR. SCHRADER, CALLED HIS ATTENTION TO THE PRICE HE HAD QUOTED, INFORMED HIM AT THE SAME TIME THAT SUCH PRICE WAS CONSIDERED LOW, AND ASKED HIM TO VERIFY THE BID PRICE HE HAD QUOTED. MR. SCHRADER THEN STATED THAT HE REALIZED HIS PRICE WAS LOW, HOWEVER HE WISHED TO LET HIS BID STAND AT $58.00. AWARD TO B. L. SCHRADER, INC., UNDER CONTRACT DA-35- 026-ENG-27758 WAS MADE LATER ON THE SAME DAY. ON JUNE 7, 1956, THE CONTRACTOR ADVISED BY TELEPHONE THAT HE BELIEVED A TYPOGRAPHICAL ERROR HAD BEEN MADE IN HIS BID AND HE WOULD LIKE TO HAVE THE AWARD CANCELLED, WHICH ADVICE WAS CONFIRMED BY A TELEGRAM RECEIVED ON JUNE 7, 1956, STATING THAT THE BID PRICE SHOULD BE $88.00 AND REQUESTING THAT THE BID QUOTATION OF $58.00 BE DISREGARDED.

UNDER DATE OF JUNE 15, 1956, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR TO SUBMIT A WRITTEN STATEMENT OF THE FACTS TOGETHER WITH SUPPORTING EVIDENCE. ON AUGUST 17, 1956, THE CONTRACTOR SUBMITTED A PHOTOSTATIC COPY OF SCHEDULE T, AN EXPLANATION THAT THE TYPIST HAS MISREAD THE HANDWRITTEN BID PRICE THEREON IN TYPING THE BID SUBMITTED TO THE CONTRACTING OFFICER, AND A REQUEST THAT THE CONTRACT PRICE BE INCREASED $30.00 PER THOUSAND BOARD FEET ON THE QUANTITIES TO BE SHIPPED. IT SHOULD BE NOTED THAT THE HANDWRITTEN BID PRICE, AS SHOWN ON THE PHOTOSTATIC COPY OF SCHEDULE T FORWARDED BY THE CONTRACTOR IS NOT, IN OUR OPINION, SUFFICIENTLY LEGIBLE TO DEFINITELY STATE THAT THE FIRST FIGURE WAS INTENDED TO BE "5" OR "8.'

ASSUMING, HOWEVER, THAT THE FIGURES INSERTED IN HANDWRITING BY THE CONTRACTOR IN THE WORKSHEET COPY OF SCHEDULE T WAS INTENDED TO BE "88" AS ALLEGED AND THAT THE $58.00 FIGURE IN THE BID AS SUBMITTED WAS THE RESULT OF A TYPOGRAPHICAL ERROR, THE BASIC QUESTION INVOLVED IS NOT WHETHER THE BIDDER MADE AN ERROR IN ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE COMPANY'S BID. WHILE IT IS TRUE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE BY REASON OF COMPARATIVE PRICES THAT AN ERROR MAY HAVE BEEN MADE IN THE LOW BID, THE RECORD DOES NOT INDICATE THAT THE PRICE DIFFERENCES WERE SO GREAT THAT THE LOW BID PRICE NECESSARILY MUST HAVE BEEN ERRONEOUS. UNDER THE CIRCUMSTANCES, THE ONLY DUTY IMPOSED ON THE CONTRACTING OFFICER PRIOR TO AWARD WAS TO VERIFY THAT THE BIDDER INTENDED TO SUBMIT A BID OF $58.00 AND INTENDED TO BE BOUND BY THE CONTRACTING OFFICER'S ACCEPTANCE THEREOF. SUCH DUTY WAS COMPLETELY DISCHARGED WHEN, UPON BEING ORALLY ADVISED BY THE SUPERVISOR OF THE AWARDS UNIT TO REEXAMINE HIS RETAINED COPY OF THE BID AND CONFIRM THE BID PRICE BECAUSE IT WAS CONSIDERED TO BE LOW, THE PRESIDENT OF B. L. SCHRADER, INC., VERIFIED THE $58.00 BID PRICE AS CORRECT AND INDICATED HE WANTED TO LET IT STAND. THE RULE IS WELL SETTLED THAT WHERE A BIDDER IS AFFORDED A PROPER OPPORTUNITY TO VERIFY HIS BID PRICE PRIOR TO AWARD, THE CONTRACTING OFFICER IS UNDER NO OBLIGATION TO MAKE FURTHER INQUIRY AS TO THE CORRECTNESS OF THE BID. SEE CARNEGIE STEEL COMPANY V. CONNELLY, 97 A. 774; SHRIMPTON MFG. COMPANY V. BRIN, 125 S.W. 942.

ON THE BASIS OF THE PRESENT RECORD IT MUST THEREFORE BE CONCLUDED THAT ANY ERROR WHICH WAS DISCOVERED IN THE BID PRICE AFTER VERIFICATION WAS UNILATERAL--- NOT MUTUAL--- SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND THAT ACCEPTANCE OF THE VERIFIED BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

UNDER THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS ON WHICH PAYMENTS IN EXCESS OF THE CONTRACT PRICE MAY BE MADE TO THE CONTRACTOR.