B-130144, JAN. 7, 1957

B-130144: Jan 7, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED DECEMBER 19. TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF CONTRACT NO. WERE TO BE SUBMITTED ON AN F.O.B. WERE TO BE SUBMITTED ON AN F.O.B. WAS THE LOWEST RECEIVED ON ITEMS 3A. THE BID AS TO THOSE FOUR ITEMS WAS ACCEPTED ON JUNE 26. THE SPECIFICATIONS REQUIRED DOMESTIC PACKING ONLY AND ITS BID ON ITEM 3A WAS SO BASED. ADVISED THE CORPORATION THAT THE SPECIFICATIONS DID PROVIDE THAT ITEM 3A BE PACKED FOR EXPORT AND THAT HE WAS WITHOUT AUTHORITY TO REFORM OR CHANGE THE TERMS OF THE CONTRACT. THE CONTRACTOR APPEARS TO HAVE ACKNOWLEDGED THAT THE SPECIFICATIONS DID REQUIRE THAT ITEM 3A BE PACKED FOR EXPORT AND THAT IT HAD MISUNDERSTOOD THE PROVISIONS.

B-130144, JAN. 7, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 19, 1956, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN RELATIVE TO AN ERROR ALLEGED BY GENERAL GUMMED PRODUCTS, INC., LINDEN, NEW JERSEY, TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF CONTRACT NO. DA 36-030-QM-8027 (OI 9030-G-56) DATED JUNE 26, 1956.

THE PHILADELPHIA QUARTERMASTER DEPOT, BY INVITATION NO. QM-36-030-56 762, REQUESTED BIDS FOR FURNISHING, AMONG OTHERS, ITEM 3 COVERING 27,560 ROLLS OF TAPE, PAPER, GUMMED (SEALING AND SECURING) MEDIUM WEIGHT, SUBSTANCE 60, 600 FEET PER ROLL, SIZE 2 IN. WIDE. BIDS ON 2,610 ROLLS OF THIS QUANTITY, DESIGNATED AS ITEM 3A, FOR DELIVERY TO THE NAVAL SUPPLY DEPOT, PEARL HARBOR, H., WERE TO BE SUBMITTED ON AN F.O.B. ORIGIN BASIS. BIDS ON THE REMAINING QUANTITIES, DESIGNATED AS ITEM 3B THROUGH 3Q, WITH DELIVERY TO VARIOUS DESTINATIONS IN THE CONTINENTAL UNITED STATES, WERE TO BE SUBMITTED ON AN F.O.B. DESTINATION BASIS. PAGE 15 OF THE INVITATION PROVIDED WITH RESPECT TO PREPARATION FOR DELIVERY OF ITEM 3:

"SHALL BE FOR DOMESTIC AND OVERSEAS SHIPMENT (AS INDICATED HEREIN) IN ACCORDANCE WITH SECTION 7.2 OF FEDERAL SPECIFICATION UU-T-11B DATED 24 APRIL 1951, WITH THE FOLLOWING EXCEPTION:--- DELETE REFERENCE TO 5.1 IN PARAGRAPH 7.2.2.2 (OVERSEAS SHIPMENT) AND SUBSTITUTE 7.2.2.1.'

IN RESPONSE TO THE INVITATION, GENERAL GUMMED PRODUCTS, INC., SUBMITTED A BID DATED JUNE 1, 1956, QUOTING PRICES FOR EACH OF ITEMS 3A THROUGH 3Q. THE BID OF THE CORPORATION, AFTER TAKING INTO CONSIDERATION TRANSPORTATION CHARGES ON ITEMS 3A AND DISCOUNT, WAS THE LOWEST RECEIVED ON ITEMS 3A, 3F, 3G, AND 3H. THE BID AS TO THOSE FOUR ITEMS WAS ACCEPTED ON JUNE 26, 1956.

BY LETTER DATED JUNE 28, 1956, THE CONTRACTOR ACKNOWLEDGED RECEIPT OF THE AWARD OF THE CONTRACT AND ADVISED THAT WHILE THE AWARD CALLED FOR EXPORT PACKING FOR ITEM 3A, THE SPECIFICATIONS REQUIRED DOMESTIC PACKING ONLY AND ITS BID ON ITEM 3A WAS SO BASED. THE COMPANY REQUESTED THAT THE AWARD BE CORRECTED OR THAT THEY BE AUTHORIZED TO CHARGE FOR THE EXTRA EXPENSE OF EXPORT PACKING. THE CONTRACTING OFFICER BY LETTER DATED JULY 12, 1956, ADVISED THE CORPORATION THAT THE SPECIFICATIONS DID PROVIDE THAT ITEM 3A BE PACKED FOR EXPORT AND THAT HE WAS WITHOUT AUTHORITY TO REFORM OR CHANGE THE TERMS OF THE CONTRACT. BY LETTER DATED JULY 25, 1956, THE CONTRACTOR APPEARS TO HAVE ACKNOWLEDGED THAT THE SPECIFICATIONS DID REQUIRE THAT ITEM 3A BE PACKED FOR EXPORT AND THAT IT HAD MISUNDERSTOOD THE PROVISIONS. THE CORPORATION STATED THAT THE COST OF EXPORT PACKING INCREASES THE COST OF ITS MATERIALS BY APPROXIMATELY 40 PERCENT AND REFERRED TO ITS QUOTATION FOR DOMESTIC PACK TO BAYONNE, NEW JERSEY (ITEM 3G), WHICH WAS HIGHER THAN THAT QUOTED FOR OVERSEAS PACK (ITEM 3A). THE CONTRACTOR REQUESTED PAYMENT OF AN ADDITIONAL $323.30 FOR THE EXPORT PACKING.

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 INVITATION PROVIDED THAT ITEM 3A WAS TO BE SHIPPED TO PEARL HARBOR, T.H., AND PAGE 15 PROVIDED THAT THE TAPE COVERED BY ITEM 3 WAS TO BE PREPARED FOR DOMESTIC AND OVERSEAS SHIPMENT AS INDICATED THEREIN. THE PARAGRAPH WITH REFERENCE TO PACKING FOR OVERSEAS SHIPMENT (7.2.2.2) WAS NOT DELETED, MERELY THE REFERENCE IN THAT PARAGRAPH TO PARAGRAPH 5.1 WHICH PROVIDES THAT COMMERCIAL PACKAGING COULD BE USED UNLESS OTHERWISE PROVIDED. THE EFFECT OF THE DELETION WAS TO ELIMINATE THE PROVISION THAT COMMERCIAL PACKAGING WAS ACCEPTABLE, AND IN LIEU OF COMMERCIAL PACKAGING, THE PACKAGING SPECIFIED FOR DOMESTIC SHIPMENT IN 7.2.2.1 WAS TO BE USED, WITH THE ADDITIONAL REQUIREMENTS OF 7.2.2.2 FOR OVERSEAS PACKING REMAINING UNCHANGED. THE CONTRACTOR'S INTERPRETATION THAT ALL OF PARAGRAPH 7.2.2.2 WAS TO BE DELETED DOES NOT APPEAR TO BE WARRANTED BY THE LANGUAGE INVOLVED. THUS, IT MUST BE HELD THAT THE SPECIFICATION DID PROVIDE THAT ITEM 3A BE PACKED FOR EXPORT.

IT IS REPORTED THAT THE CONTRACTING OFFICER WAS NOT ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID AT THE TIME OF THE ACCEPTANCE THEREOF. ALTHOUGH THE BID FOR DOMESTIC SHIPMENT WAS HIGHER THAN THE BID FOR OVERSEAS SHIPMENT THIS, OF ITSELF, DOES NOT APPEAR SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF A MISTAKE SINCE THE DOMESTIC SHIPMENTS ALSO INCLUDED FREIGHT COSTS TO DESTINATION. FURTHERMORE, THE CONTRACTOR'S ORIGIN BID PRICE FOR THE OVERSEAS SHIPMENT WAS HIGHER THAN THAT OF ANOTHER BIDDER, ALTHOUGH THE INCLUSION OF FREIGHT COSTS TO BE PAID BY THE GOVERNMENT RESULTED IN AN AWARD TO THE CONTRACTOR AS REPRESENTING A LOWER OVERALL COST TO THE GOVERNMENT. THUS, THERE APPEARS TO HAVE BEEN NOTHING ON THE FACE OF THE BID, OR IN THE ATTENDANT CIRCUMSTANCES, TO INDICATE TO THE CONTRACTING OFFICER THE PROBABILITY OF ERROR. THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

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. WHILE IT MAY BE THAT GENERAL GUMMED PRODUCTS, INC., MADE AN ERROR ON ITEM 3A AS ALLEGED, IT APPEARS SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS NOT INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, AFFORDS NO BASIS FOR GRANTING RELIEF TO THE CONTRACTOR. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN, ET AL., V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR THE PAYMENT OF ANY AMOUNT TO GENERAL GUMMED PRODUCTS, INC., IN EXCESS OF THE AMOUNT SPECIFIED IN CONTRACT NO. DA 36-030-QM-8027.