B-131729, MAY 15, 1957

B-131729: May 15, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER OF MAY 2. DA-11-027-QM 69475 IS BASED. WAS MAILED TO THE CONTRACTOR COVERING ITEMS 1. THE FORMAL CONTRACT BEARING THE SAME DATE WAS MAILED OCTOBER 9. THE CONTRACTOR ADVISED THE PURCHASING AGENCY THAT THE CONTRACT PRICE SHOULD HAVE BEEN $41. IT WAS STATED THAT SINCE THE PARTICULAR CANS COVERED BY ITEMS 2 AND 3 HAD NOT BEEN MANUFACTURED FOR SEVERAL YEARS. THERE WERE INVOLVED TOOLING COSTS OF $17. THE WORKSHEET FURNISHED BY THE CONTRACTOR WAS CONSISTENT WITH THE EXPLANATION GIVEN. THE CONTRACTOR TOOK THE POSITION THAT THE TENDER OF THE CONTRACT FOR SIGNATURE CONSTITUTED A COUNTEROFFER IN THAT THE DELIVERY TERMS DIFFERED FROM THOSE CONTAINED IN ITS ORIGINAL BID ON THE ITEMS INVOLVED BUT STATED THAT IT WAS ACCEPTING THE CONTRACT ON THE ASSUMPTION THAT PROMPT RECOGNITION WOULD BE GIVEN TO ITS CLAIM.

B-131729, MAY 15, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER OF MAY 2, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR CONTINENTAL CAN COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-11-027-QM 69475 IS BASED.

NOTICE OF INTENT TO PURCHASE, DATED JUNE 28, 1956, SOLICITED QUOTATIONS FOR THE FURNISHING OF CERTAIN SIZE CANS AND LIDS FOR USE IN RATION ASSEMBLIES FOR DELIVERY F.O.B. DESTINATION DURING THE PERIOD OCTOBER 1-15, 1956. IN RESPONSE TO THE NOTICE, THE CONTINENTAL CAN COMPANY SUBMITTED THE ONLY BID. AFTER CONSIDERABLE CORRESPONDENCE AND NEGOTIATION, NOT HERE PERTINENT, NOTICE OF AWARD, DATED SEPTEMBER 28, 1956, WAS MAILED TO THE CONTRACTOR COVERING ITEMS 1, 2, AND 3 OF THE INVITATION FOR A TOTAL CONTRACT PRICE OF $25,366.84. THE FORMAL CONTRACT BEARING THE SAME DATE WAS MAILED OCTOBER 9, 1956. ON OCTOBER 11, 1956, THE CONTRACTOR ADVISED THE PURCHASING AGENCY THAT THE CONTRACT PRICE SHOULD HAVE BEEN $41,160.46 RATHER THAN $25,366.84, DUE TO AN ERROR. FURTHER, IT WAS STATED THAT SINCE THE PARTICULAR CANS COVERED BY ITEMS 2 AND 3 HAD NOT BEEN MANUFACTURED FOR SEVERAL YEARS, THERE WERE INVOLVED TOOLING COSTS OF $17,800 AND THAT IN AN EFFORT TO ESTABLISH AN AMORTIZED RATE, THE CONTRACTOR HAD COMPUTED THE RATE PER THOUSAND AS $23.74 INSTEAD OF $273.33. THE WORKSHEET FURNISHED BY THE CONTRACTOR WAS CONSISTENT WITH THE EXPLANATION GIVEN. THE CONTRACTOR EXECUTED THE FORMAL CONTRACT AND PROCEEDED TO PERFORM IN ACCORDANCE WITH ITS TERMS. HOWEVER, ON NOVEMBER 14, 1956, IT FILED A CLAIM IN THE AMOUNT OF $15,793.62, REPRESENTING THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE ALLEGED CORRECT PRICE. THIS CLAIM, THE CONTRACTOR TOOK THE POSITION THAT THE TENDER OF THE CONTRACT FOR SIGNATURE CONSTITUTED A COUNTEROFFER IN THAT THE DELIVERY TERMS DIFFERED FROM THOSE CONTAINED IN ITS ORIGINAL BID ON THE ITEMS INVOLVED BUT STATED THAT IT WAS ACCEPTING THE CONTRACT ON THE ASSUMPTION THAT PROMPT RECOGNITION WOULD BE GIVEN TO ITS CLAIM.

IT APPEARS THAT THE MAILING OF THE NOTICE OF AWARD WAS AN ACCEPTANCE OF CONTINENTAL CAN COMPANY'S OFFER AS CONTAINED IN ITS LETTERS OF JULY 19 AND SEPTEMBER 5 AND 26, 1956, AND ITS TELEGRAMS OF SEPTEMBER 19 AND 27, 1956, AND RESULTED IN A VALID AND BINDING CONTRACT. IT IS REPORTED THAT THERE IS NOTHING IN THE NOTICE OF AWARD OR IN THE WRITTEN CONTRACT ITSELF WHICH WAS NOT CONTAINED IN THE NEGOTIATIONS BETWEEN THE PARTIES. THE DELIVERY PERIOD GIVEN IN THE CONTRACTOR'S LETTER OF SEPTEMBER 5 WAS MODIFIED BY ITS TELEGRAM OF SEPTEMBER 19, 1956, AND THE DELIVERY SCHEDULES CONTAINED IN THE NOTICE OF AWARD AND IN THE WRITTEN CONTRACT ARE IN ACCORDANCE WITH THE MODIFIED OFFER OF SEPTEMBER 19.

THE RESPONSIBILITY FOR PREPARING 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. THE CONTRACTING OFFICER REPORTS THAT HE WAS NOT AWARE OF THE POSSIBILITY OF ERROR PRIOR TO AWARD, AND SINCE PREVIOUS PROCUREMENTS OF THIS SIZE CAN WERE AT A LOWER FIGURE THAN THE BID SUBMITTED BY THE CONTRACTOR AND THERE WERE NO OTHER BIDDERS WITH WHICH THE BID PRICE COULD BE COMPARED, WE FIND NO BASIS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF ERROR. IF AN ERROR WAS MADE IN THE BID, IT IS CLEAR THAT SUCH ERROR WAS DUE SOLELY TO THE BIDDER'S OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MAY HAVE BEEN MADE WAS UNILATERAL--- NOT MUTUAL --- AND THEREFORE AFFORDS NO BASIS FOR GRANTING RELIEF TO THE COMPANY. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

ACCORDINGLY, ON THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR RELIEVING CONTINENTAL CAN COMPANY FROM LIABILITY FOR FURNISHING THE CANS REQUIRED UNDER THE CONTRACT AT ITS BID PRICES, OR FOR INCREASING THE CONSIDERATION THEREOF.