B-130203, JANUARY 22, 1957, 36 COMP. GEN. 523

B-130203, JANUARY 22, 1957, 36 COMP. GEN. 523

CONTRACTS - OFFER AND ACCEPTANCE - UNSIGNED BIDS - OFFER TO PERFORM AFTER TERMINATION FOR DEFAULT THE ACCEPTANCE OF A LOW BID, WHICH BORE ONLY THE BIDDER'S TYPEWRITTEN SIGNATURE BUT WHICH WAS ACCOMPANIED BY A PROPERLY EXECUTED BID BOND FULLY IDENTIFYING THE BID, VESTED IN THE GOVERNMENT THE RIGHT TO RECEIVE PERFORMANCE IN ACCORDANCE WITH THE TERMS OF THE BID. A CONTRACTOR WHO WAS AFFORDED EVERY OPPORTUNITY TO PERFORM, BUT WHO DID NOT OFFER TO PERFORM UNTIL AFTER THE CONTRACT WAS TERMINATED AND THE REPLACEMENT CONTRACT EXECUTED, IS NOT ENTITLED TO HAVE THE OFFER CONSIDERED, AND, UNDER THE TERMINATION FOR DEFAULT CLAUSE OF THE CONTRACT, THE CONTRACTOR IS INDEBTED TO THE GOVERNMENT FOR THE DIFFERENCE IN PRICE BETWEEN THE DEFAULTED CONTRACT AND THE REPLACEMENT CONTRACT.

TO SALMONS DREDGING COMPANY, JANUARY 22, 1957:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 3, 1956, RELATIVE TO YOUR INDEBTEDNESS IN THE AMOUNT OF $3,100, REPRESENTING THE EXCESS COST INCURRED BY THE UNITED STATES IN HAVING THE WORK COVERED BY ITS CONTRACT WITH YOU--- NO. NOY79176--- PERFORMED AND COMPLETED BY A SECOND CONTRACTOR TO WHOM THE UNITED STATES RELET THE WORK FOLLOWING YOUR DEFAULT.

IN RESPONSE TO AN ADVERTISED REQUEST FOR PRICES TO REPAIR THE UNDERWATER CROSSING OF THE KEY WEST AQUEDUCT, MARATHON, FLORIDA, YOUR FIRM SUBMITTED A BID IN THE AMOUNT OF $19,400. IN THE SPACE ON THE BID DESIGNATED FOR THE SIGNATURE, THERE APPEARED THE TYPEWRITTEN NAME " SALMONS DREDGING COMPANY," BY THE TYPEWRITTEN NAME,"H. V. SALMONS.' A STANDARD GOVERNMENT BID BOND APPEARING TO BE INDIVIDUALLY EXECUTED BY "H. V. SALMONS" AND " ROSAMOND W. SALMONS," AND DULY WITNESSED WAS SUBMITTED WITH THE BID. OCTOBER 22, 1953, IMMEDIATELY AFTER THE BID OPENING, AND AGAIN ON NOVEMBER 3, 1953, YOU WERE ADVISED BY TELEPHONE OF YOUR FAILURE TO SIGN THE BID AND ON BOTH OCCASIONS YOU INDICATED THAT YOU WOULD SIGN. BY LETTER DATED NOVEMBER 6, 1953, THE PROPOSAL OF YOUR FIRM WAS ACCEPTED AND YOU WERE REQUESTED TO ACKNOWLEDGE RECEIPT OF THE NOTICE OF AWARD AND DIRECT TO PROCEED WITH THE JOB. IN LETTER DATED NOVEMBER 25, 1953, THE FIRM WAS REQUESTED TO SIGN AND RETURN THE CONTRACT DOCUMENTS AND BONDS. IN LETTER DATED DECEMBER 3, 1953, YOU ALLEGED THAT THE BID WAS SUBMITTED IN ERROR INASMUCH AS IT WAS MISSED ON OCTOBER 23, 1953, THE DAY AFTER THE BID OPENING, AND THAT THE INFORMATION WAS THEN COMMUNICATED TO MR. HUND WHO ALLEGEDLY ADVISED YOU THAT THE BID COULD NOT CONSTITUTE A PROPOSAL UNLESS THE FORMS WERE PROPERLY SIGNED. ALSO, FOLLOWING YOUR TALK WITH MR. HUND, YOU ALLEGED THAT YOU DECIDED TO INVESTIGATE THE PROJECT AND FOUND THAT YOU WERE NOT EQUIPPED TO DO THE WORK. YOU ALLEGED FURTHER THAT YOUR BID DID NOT CONSTITUTE A PROPOSAL AND THAT YOU DID NOT WANT THE CONTRACT. LETTER TO YOUR FIRM DATED DECEMBER 9, 1953, THE STATEMENT ATTRIBUTED TO MR. HUND WAS CONTROVERTED, SINCE HE IS REPORTED TO HAVE TOLD YOU THAT THE ABSENCE OF YOUR SIGNATURE HAD BEEN WAIVED AS AN INFORMALITY. YOUR FIRM WAS ADVISED THAT IT WOULD BE NECESSARY TO FORFEIT ITS BID BOND UNLESS IT PROCEEDED WITH THE WORK OR SHOWED AN INTENTION TO PROCEED BY DECEMBER 14, 1953. NOTHING WAS DONE TO MANIFEST AN INTENTION TO PROCEED WITH THE CONTRACT; THEREFORE ON DECEMBER 18, 1953, CAPTAIN F. A. MASON INFORMED THE FIRM BY REGISTERED MAIL THAT THE CONTRACT WAS TERMINATED IN WHOLE FOR DEFAULT. ON DECEMBER 22, 1953, THE CONTRACT WAS RELET TO THE SECOND LOWEST BIDDER, LOGAN DIVING COMPANY, INC., IN THE AMOUNT OF $22,500. LETTER DATED DECEMBER 27, 1953, YOUR FIRM INDICATED FOR THE FIRST TIME THAT IT WAS MAKING ARRANGEMENTS TO PERFORM THE CONTRACT. ON JANUARY 30, 1954, THE LOGAN DIVING COMPANY, INC., COMPLETED THE WORK AT THE CONTRACTED COST OF $22,500, WHICH RESULTED IN A DEFICIT TO THE GOVERNMENT OF $3,100 FOR THE ADDITIONAL COSTS INCURRED IN COMPLETION OF THE PROJECT WHICH YOUR FIRM HAD BEEN AWARDED TO PERFORM FOR $19,400. BY LETTER DATED NOVEMBER 11, 1956, OUR CLAIMS DIVISION ADVISED YOU THAT YOUR DEBT IN THE AMOUNT OF $3,100 WAS REPORTED TO THIS OFFICE FOR COLLECTION. IN YOUR LETTER OF DECEMBER 3, 1956, YOU ALLEGE THAT YOUR FIRM DID NOT MAKE ANY BID AND THAT YOU ADVISED CAPTAIN F. A. MASON THAT YOU WOULD ACCEPT THE CONTRACT.

THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS ADVISE PROSPECTIVE BIDDERS THAT THE UNITED STATES RESERVES THE RIGHT, AS THE INTERESTS OF THE GOVERNMENT MIGHT REQUIRE, TO WAIVE ANY INFORMALITY IN THE BIDS RECEIVED.

CONTRACT ARTICLE 25," TERMINATION FOR DEFAULT," INCORPORATED BY REFERENCE IN THE INVITATION TO BID, PROVIDED:

(A) THE PERFORMANCE OF WORK UNDER THIS CONTRACT MAY * * * BE TERMINATED BY THE GOVERNMENT * * * WHENEVER THE CONTRACTOR SHALL DEFAULT IN PERFORMANCE * * *. TERMINATION OF WORK HEREUNDER SHALL BE EFFECTED BY DELIVERY TO THE CONTRACTOR OF A DEFAULT NOTICE OF TERMINATION * * *.

(C) * * * IF THE COST * * * (OF COMPLETION BY THE REPLACEMENT CONTRACTOR) EXCEED THE CONTRACT PRICE, THE EXCESS COST SHALL BE CHARGED TO THE CONTRACTOR AND THE CONTRACTOR OR HIS SURETY, IF ANY, SHALL PAY SUCH AMOUNT TO THE GOVERNMENT UPON DEMAND.

THE STANDARD GOVERNMENT BID BOND, EXECUTED ON OCTOBER 22, 1953, AND SUBMITTED WITH THE BID, STATED THAT THE PRINCIPAL HAS SUBMITTED THE "ACCOMPANYING BID * * * FOR REPAIRS TO UNDERWATER CROSSING, KEY WEST, FLORIDA, IN STRICT ACCORDANCE WITH PLANS AND SPECIFICATIONS, SPECIFICATION NO. 39450, CONTRACT N.O.Y. 79176.' THE BID BOND FURTHER PROVIDED THAT THE PRESCRIBED FORMS AND CONTRACTUAL DOCUMENTS SHALL BE EXECUTED WITHIN 10 DAYS AFTER PRESENTATION FOR SIGNATURE AND THAT IN THE EVENT OF A FAILURE TO ENTER INTO THE CONTRACT WITHIN THE SPECIFIED TIME, THE PRINCIPAL SHALL PAY THE GOVERNMENT THE DIFFERENCE BETWEEN THE AMOUNT SPECIFIED IN THE BID AND THE AMOUNT FOR WHICH THE GOVERNMENT MAY PROCURE THE REQUIRED WORK.

IT IS ESTABLISHED THAT AN UNSIGNED BID MAY BE CONSIDERED FOR AWARD IF ACCOMPANIED BY A LETTER, BOND OR OTHER DOCUMENT SIGNED BY THE BIDDER CLEARLY EVINCING HIS INTENT TO SUBMIT THE BID. 17 COMP. GEN. 497. SIGNATURE MAY BE MADE BY A MARK, OR BY A STAMP, OR TYPEWRITTEN OR PRINTED MECHANICALLY, PROVIDED IT IS INTENDED OR ADOPTED AS AN AUTHENTICATION OF THE DOCUMENT SIGNED. 39 AM. JUR. 680; NOTE 37 LRA (1NS) 352. ACCORDINGLY, YOUR CONTENTION THAT YOU MADE NO BID IS WITHOUT MERIT.

UPON ACCEPTANCE OF THE BID ON NOVEMBER 6, 1953, YOUR FIRM BECAME OBLIGATED TO DO THE WORK. THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH- - NO ERROR HAVING BEEN ALLEGED UNTIL ONE MONTH AFTER AWARD. IT IS SETTLED THAT IN CONTRACTING WITH THE GOVERNMENT A VALID AND ENFORCEABLE CONTRACT IS FORMED UPON THE ACCEPTANCE BY AN AUTHORIZED AGENT OF THE GOVERNMENT OF A BIDDER'S PROPOSAL, EVEN THOUGH THE PARTIES CONTEMPLATE, OR THE STATUTES REQUIRE, THAT A FORMAL WRITTEN CONTRACT BE THEREAFTER EXECUTED BY THE PARTIES, AND IRRESPECTIVE OF WHETHER SUCH FORMAL CONTRACT IS THEREAFTER EXECUTED. SEE GARFIELDE V. UNITED STATES, 93 U.S. 242; UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75; UNITED STATES V. CONTI, 119 F.2D 652.

UPON ACCEPTANCE OF THE BID, THE GOVERNMENT BECAME VESTED WITH THE RIGHT TO RECEIVE PERFORMANCE STRICTLY IN ACCORDANCE WITH THE TERMS OF THE BID, OR TO ENFORCE THE PROVISIONS THEREOF UPON DEFAULT.

AS TO YOUR CONTENTION THAT YOUR FIRM INDICATED TO CAPTAIN F.A. MASON THAT IT WOULD ACCEPT THE CONTRACT, THE RECORD IS CLEAR THAT YOUR FIRM WAS AFFORDED EVERY REASONABLE OPPORTUNITY TO PERFORM OR TO MANIFEST AN INTENTION TO PERFORM, BUT ONLY AFTER THE GOVERNMENT EXERCISED ITS OPTION UNDER ARTICLE 25 TO TERMINATE YOUR RIGHT TO PROCEED AND RELET THE CONTRACT WAS PERFORMANCE TENDERED AT ALL. ACCORDINGLY, YOUR OFFER TO PERFORM THE CONTRACT CAME TOO LATE, SINCE A REPLACEMENT CONTRACT HAD ALREADY BEEN EXECUTED.

IN THE CIRCUMSTANCES, THE GOVERNMENT WAS ENTITLED TO RELET THE WORK AND CHARGE THE FIRM WITH THE DEFICIENCY. UNDER THE TERMS OF THE BID BOND AND UNDER ARTICLE 25, QUOTED ABOVE, THE MEASURE OF DAMAGES FOR FAILURE TO PERFORM THE CONTRACT IS THE DIFFERENCE BETWEEN YOUR FIRM'S BID, $19,400, AND THE PRICE THE GOVERNMENT PAID LOGAN DIVING COMPANY, INC., $22,500, OR $3,100. ACCORDINGLY, UNLESS SATISFACTORY ARRANGEMENTS FOR SETTLEMENT ARE MADE PROMPTLY, YOUR INDEBTEDNESS WILL BE COLLECTED FROM ANY AMOUNTS OTHERWISE DUE YOU BY THE GOVERNMENT OR REPORTED FOR LEGAL ACTION TO THE DEPARTMENT OF JUSTICE.