B-130069, DEC. 31, 1956

B-130069: Dec 31, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 12. DA-42-015-QM-3311 WAS AWARDED. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT PACKING SHOULD BE FOR OVERSEAS SHIPMENT IN ACCORDANCE WITH PARAGRAPH 7.2.2 OF FEDERAL SPECIFICATION UU-T- 591B. THAT SHIPPING CONTAINERS ARE TO BE LINED WITH A SEALED WATERPROOF BAG. BIDS WERE REQUESTED ON BOTH F.O.B. ORIGIN WAS ACCEPTED ON AUGUST 15. SINCE THE ITEMS WERE FOR OVERSEAS SHIPMENT AND SINCE THE CORPORATION HAD NOT COMMENCED PACKAGING OF THE TOWELS. IT WAS ADVISED THAT NO WAIVER OF THIS REQUIREMENT COULD BE GRANTED. THE CONTRACTING OFFICER STATED THAT NO SUCH WAIVER HAS BEEN GRANTED IN THE PAST AT THE UTAH GENERAL DEPOT AND THAT NONE ARE KNOWN OF AT OTHER DEPOTS.

B-130069, DEC. 31, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 12, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE A.P.W. PRODUCTS COMPANY, INC., NEW YORK, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-42-015-QM-3311 WAS AWARDED.

THE PURCHASING DIVISION, UTAH GENERAL DEPOT, OGDEN, UTAH, BY INVITATION NO. QM-42-015-57-3, REQUESTED BIDS--- TO BE OPENED JULY 17, 1956--- FOR FURNISHING 7,200 CARTONS OF SINGLE FOLD TYPE PAPER TOWELS. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION THAT PACKING SHOULD BE FOR OVERSEAS SHIPMENT IN ACCORDANCE WITH PARAGRAPH 7.2.2 OF FEDERAL SPECIFICATION UU-T- 591B, WHICH PROVIDES, AMONG OTHER THINGS, THAT SHIPPING CONTAINERS ARE TO BE LINED WITH A SEALED WATERPROOF BAG, OR ITS EQUIVALENT, MADE FROM MATERIAL CONFORMING TO THE REQUIREMENTS OF SPECIFICATION JAM-P-125. BIDS WERE REQUESTED ON BOTH F.O.B. ORIGIN AND F.O.B. DESTINATION BASES. RESPONSE THE A.P.W. PRODUCTS COMPANY, INC., SUBMITTED A BID DATED JULY 16, 1956, OFFERING TO FURNISH THE PAPER TOWELS AT PRICES OF $2.97 PER CARTON F.O.B. ORIGIN AND $3.89 PER CARTON F.O.B. DESTINATION. THE ABSTRACT OF BIDS SHOWS THAT ON THE PAPER TOWELS, TWO OTHER BIDDERS QUOTED F.O.B. ORIGIN PRICES OF $3.35 AND $3.50 PER CARTON. THE BID OF THE CORPORATION TO FURNISH THE TOWELS F.O.B. ORIGIN WAS ACCEPTED ON AUGUST 15, 1956.

IN A REPORT DATED NOVEMBER 2, 1956, THE CONTRACTING OFFICER STATED THAT ON SEPTEMBER 11, 1956, THE A.P.W. PRODUCTS COMPANY, INC., REQUESTED PERMISSION, BY TELEPHONE, TO OMIT THE WATERPROOF CASE LINER IN PACKAGING THE TOWELS; THAT THE CORPORATION ALLEGED THAT EVEN THOUGH THE SPECIFICATIONS CALLED FOR THIS CASE LINER, SINCE OTHER QUARTERMASTER INSTALLATIONS HAD WAIVED THE REQUIREMENT, SUBJECT BID HAS BEEN PREPARED ON THE ASSUMPTION THAT NO CASE LINERS WOULD BE REQUIRED. SINCE THE ITEMS WERE FOR OVERSEAS SHIPMENT AND SINCE THE CORPORATION HAD NOT COMMENCED PACKAGING OF THE TOWELS, IT WAS ADVISED THAT NO WAIVER OF THIS REQUIREMENT COULD BE GRANTED. IN REGARD TO THE WAIVER OF THE REQUIREMENT FOR WATERPROOF CASE LINERS, THE CONTRACTING OFFICER STATED THAT NO SUCH WAIVER HAS BEEN GRANTED IN THE PAST AT THE UTAH GENERAL DEPOT AND THAT NONE ARE KNOWN OF AT OTHER DEPOTS.

IN A LETTER DATED SEPTEMBER 12, 1956, THE A.P.W. PRODUCTS COMPANY, INC., STATED:

"THIS WILL CONFIRM TELEPHONE CONVERSATION WITH REGARD TO THE ABOVE CONTRACT WHEREIN WE INFORMED YOU THAT THE INSPECTOR AT OUR ALBANY MILL ADVISED OUR MILL SUPERINTENDENT THAT A CASE LINER WAS ONE OF THE REQUIREMENTS IN THE PACKING OF THIS CONTRACT.

"WE DID NOT FIGURE ON A CASE LINER IN OUR BID QM-42-015-57-3 WHICH RESULTED IN AWARD TO OUR COMPANY OF ORDER O.I.275-57.

"WHILE YOUR BID READS PACKING IN ACCORDANCE WITH PARAGRAPH 7.2.2 OF FEDERAL SPECIFICATION UU-T-591B, ALL PREVIOUS BIDS FROM THE VARIOUS QUARTERMASTER DEPOTS REFER TO THIS PARAGRAPH IN THE SPECIFICATION FOR THE V3 CARTON. IF A CASE LINER IS DESIRED IT IS CLEARLY MENTIONED SEPARATELY IN THE PACKING REQUIREMENTS. SINCE YOUR BID DID NOT SHOW SAME IN A SIMILAR MANNER, IT WAS TAKEN FOR GRANTED THAT REFERENCE TO PARAGRAPH 7.2.2 APPLIED TO CARTONS ONLY.

"THE LINERS FOR THIS CONTRACT HAVE BEEN ORDERED AND SUPPLIER ADVISED DELIVERY WILL TAKE APPROXIMATELY THREE WEEKS. IT WOULD BE APPRECIATED IF YOU WOULD EXTEND THE DELIVERY PERIOD FROM 14 OCTOBER TO 5 NOVEMBER, 1956 WHICH WOULD GIVE US THE THREE WEEKS THIS DELAY WILL CAUSE US.

"WE EXPECT TO FULFILL OUR CONTRACT IN EVERY WAY, HOWEVER, WE KNOW THE GOVERNMENT DOES NOT WISH TO IMPOSE A HARDSHIP ON A CONTRACTOR WHERE A LEGITIMATE ERROR WAS MADE. WE THEREFORE WISH TO MAKE A CLAIM FOR THE COST OF THE LINERS. WOULD YOU PLEASE ADVISE TO WHOM THIS CLAIM SHOULD BE ADDRESSED.

"THANK YOU FOR GIVING THIS YOUR ATTENTION.'

BY LETTER DATED OCTOBER 15, 1956, THE CORPORATION ADVISED THAT IT HAD COMPLETED DELIVERY OF THE PAPER TOWELS AND SUBMITTED THE AFFIDAVIT OF ITS VICE-PRESIDENT, IN WHICH HE REPEATED THE ALLEGATIONS MADE BY THE CORPORATION IN ITS LETTER OF SEPTEMBER 12, 1956, AND REQUESTED PAYMENT OF THE ADDITIONAL SUM OF $2,519.28 TO COVER THE ALLEGED COST OF THE WATERPROOF CASE LINERS. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED A PHOTOSTATIC COPY OF ITS ORIGINAL WORKSHEET AND AN OFFICE MEMORANDUM AND AN INVOICE RECEIVED FROM ITS SUPPLIER, WHICH PURPORTS TO SHOW THAT THE COST OF THE CASE LINERS TO THE CORPORATION WAS $2,519.28.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE CONTRACTING OFFICER REPORTS THAT HE WAS NOT AWARE OF THE POSSIBILITY OF ERROR PRIOR TO AWARD, AND IN VIEW OF THE COMPARATIVELY SMALL DIFFERENCE BETWEEN THE BIDS, WE FIND NO LEGAL BASIS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF ERROR. ALTHOUGH, AFTER AWARD, THE CORPORATION FURNISHED A COPY OF ITS ORIGINAL WORKSHEET AND CERTAIN PRICE DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE CORPORATION IN COMPUTING ITS BID PRICE ON THE ITEM IN QUESTION. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE CORPORATION UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, IN THE CIRCUMSTANCES INVOLVED, 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; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE INVITATION TO BID WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT THE TOWELS WERE TO BE PACKAGED FOR OVERSEAS SHIPMENT IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 7.2.2 OF FEDERAL SPECIFICATION UU-T-591B, WHICH PROVIDED THAT THE SHIPPING CONTAINERS WERE TO BE LINED WITH A SEALED WATERPROOF BAG. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SUCH RESPONSIBILITY INCLUDED ASCERTAINING, PRIOR TO BIDDING, THE CONTINGENCIES INVOLVED IN FURNISHING THE REQUIRED SUPPLIES. IN THIS CONNECTION SEE THE CASE OF FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120, 163, WHEREIN THE COURT SAID:

" * * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IF THEY FAIL TO DO SO, AS PLAINTIFF DID IN THIS CASE, THE GOVERNMENT CANNOT FOR THAT REASON BE HELD FOR THE RESULTING LOSS.'

IF, AS ALLEGED, THE CORPORATION ERRONEOUSLY ASSUMED THAT THE REQUIREMENT FOR A CASE LINER WOULD BE WAIVED BY THE GOVERNMENT, IT IS CLEAR THAT SUCH ERROR WAS DUE SOLELY TO ITS NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. SUCH ERROR AS MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, AFFORDS NO BASIS FOR GRANTING RELIEF TO THE CORPORATION. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507, AND OGDEN AND DOUGHERTY V. UNITED STATES ,102 C.CLS. 249, 259.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR INCREASING THE CONSIDERATION SPECIFIED IN CONTRACT NO. DA- 42-015-QM-3311.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF NOVEMBER 2, 1956, ARE RETURNED.