B-129957, DEC. 19, 1956

B-129957: Dec 19, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 3. WAS AWARDED. THE GOVERNMENT'S COST ESTIMATE WAS $950 EACH. THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDS ON THE GAGES WERE IN THE AMOUNTS OF $989. THE BID OF THE COMPANY WAS ACCEPTED ON JUNE 12. WE FIGURED OUR TOTAL LABOR BID AT $3520.00 BUT OUTSIDE MATERIALS AND LABOR WERE FIGURED AT $453.00 WHICH FIGURE SHOULD HAVE BEEN MULTIPLIED BY 5 EACH PER THE FOLLOWING BREAK DOWN: TABLE MISC. MULTIPLYING $453.00 TIMES 5 GAGES EACH WE GET $2265.00 PLUS OUR ORIGINAL $3520.00 LABOR ESTIMATE AND WE SHOULD HAVE HAD $5785.00 BID. THE QUESTION FOR CONSIDERATION HERE IS NOT WHETHER THE BRIGHTON TOOL AND DIE COMPANY MADE AN ERROR IN ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ACCEPTANCE OF THE BID.

B-129957, DEC. 19, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 3, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE BRIGHTON TOOL AND DIE COMPANY, BRIGHTON, MICHIGAN, ALLEGES IT MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT (ORDER NO. 84562) DATED JUNE 12, 1956, WAS AWARDED.

THE WATERVLIET ARSENAL, WATERVLIET, NEW YORK, BY INVITATION NO. ORD 30- 144-56-211, REQUESTED BIDS--- TO BE OPENED JUNE 5, 1956--- FOR THE MANUFACTURE AND DELIVERY OF FIVE RECEIVING GAGES IN ACCORDANCE WITH THE GOVERNMENT'S DRAWINGS. IN RESPONSE THE BRIGHTON TOOL AND DIE COMPANY SUBMITTED A BID DATED JUNE 2, 1956, OFFERING TO FURNISH THE GAGES AT A UNIT PRICE OF $785 OR FOR A TOTAL PRICE OF $3,925. THE GOVERNMENT'S COST ESTIMATE WAS $950 EACH, AND A PRIOR PROCUREMENT HAD BEEN MADE AT $850 EACH. THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDS ON THE GAGES WERE IN THE AMOUNTS OF $989, $1,790, $1,815, AND $1,860. THE BID OF THE COMPANY WAS ACCEPTED ON JUNE 12, 1956.

IN A LETTER DATED JULY 6, 1956, THE BRIGHTON TOOL AND DIE COMPANY ADVISED AS FOLLOWS:

"SUBJECT: ORD. NO. 84562

INV. NO. ORD-30-144-56-211

"IN THE PROCESSING OF THE PAPER WORK ON SUBJECT AWARD, WE DISCOVERED A SERIOUS ERROR IN THE ARITHMETIC OF OUR BID. WE FIGURED OUR TOTAL LABOR BID AT $3520.00 BUT OUTSIDE MATERIALS AND LABOR WERE FIGURED AT $453.00 WHICH FIGURE SHOULD HAVE BEEN MULTIPLIED BY 5 EACH PER THE FOLLOWING BREAK DOWN:

TABLE

MISC. OUTSIDE LABOR ------------------ $160.00

INDICATOR ---------------------------- $ 30.00

STEEL AND HEAT TREAT ----------------- $163.00

JIG GRINDING ------------------------- $100.00

$453.00

"INSTEAD WE JUST ADDED ONLY $453.00 TO $3520.00 AND CAME UP WITH $3973.00 AND ROUNDED OFF THE BID AT $3925.00.

MULTIPLYING $453.00 TIMES 5 GAGES EACH WE GET $2265.00 PLUS OUR ORIGINAL $3520.00 LABOR ESTIMATE AND WE SHOULD HAVE HAD $5785.00 BID.

"AS A RESULT, WE REQUEST CONTRACT AMENDMENT TO CORRECT OUR ERROR OR A RELEASE FROM THE AWARD.'

BY LETTERS DATED AUGUST 1 AND 15, 1956, THE COMPANY SUBMITTED PHOTOSTATIC COPIES OF THE WORKSHEETS USED IN COMPUTING ITS BID PRICE ON THE GAGES AND A COST BREAKDOWN OF THE AMOUNT OF $453, WHICH, IT STATED, REPRESENTS THE OUTSIDE LABOR AND MATERIAL COST ON ONE GAGE. THE COMPANY REQUESTED THAT THE UNIT PRICE OF THE GAGES BE INCREASED TO $1,157.

THE QUESTION FOR CONSIDERATION HERE IS NOT WHETHER THE BRIGHTON TOOL AND DIE COMPANY MADE AN ERROR IN ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ACCEPTANCE OF THE BID. THERE WAS NOTHING IN THE BID TO INDICATE AN ERROR THEREIN AND NO ALLEGATION OF ERROR WAS MADE UNTIL AFTER THE AWARD. THE CONTRACTING OFFICER HAS STATED THAT HE DID NOT SUSPECT ERROR IN THE BID WHEN MAKING THE AWARD. THE DIFFERENCE BETWEEN THE PRICE QUOTED BY THE BRIGHTON TOOL AND DIE COMPANY AND THE PRICES QUOTED BY OTHER BIDDERS WAS NOT SO GREAT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, IN VIEW OF THE GOVERNMENT ESTIMATE AND THE PRIOR PROCUREMENT, AND IT DOES NOT APPEAR THAT SUCH DIFFERENCE WAS SO GREAT THAT HE SHOULD HAVE BEEN ON NOTICE OF ERROR.

UNDER THE CIRCUMSTANCES, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE 26 COMP. GEN. 415; 29 ID. 323, AND AUTHORITIES CITED IN THOSE DECISIONS. ACCORDINGLY, THERE IS NOT PERCEIVED ANY LEGAL BASIS FOR PERMITTING ANY INCREASE IN THE BID PRICE AND THEREFORE THE BRIGHTON TOOL AND DIE COMPANY SHOULD BE REQUIRED TO FURNISH THE GAGES AT THE PRICE QUOTED IN ITS ACCEPTED BID.

THE CONTRACTOR'S LETTERS OF JULY 6, AUGUST 1 AND 15, 1956, THE CONTRACTOR'S ESTIMATE SHEETS, THE CONTRACTING OFFICER'S STATEMENT OF AUGUST 21, 1956, AND THE MEMORANDUM FROM THE CHIEF OF ORDNANCE DATED NOVEMBER 7, 1956, ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.