B-131974, JUN. 5, 1957

B-131974: Jun 5, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER OF MAY 23. IS BASED. AWARD WAS MADE TO THE COMPANY ON MARCH 4. THAT THE PRICE OF $2.80 PER POUND WAS AN ERROR SINCE THE "FAIR TRADE" PRICE FOR THE ITEM WAS $2.90 PER POUND. THE SCHEDULE CONTAINS A NOTATION THAT "THIS IS A FAIR TRADED ITEM-NO DEVIATION FROM THE ABOVE SCHEDULE IS ALLOWED.'. THE CONTRACTING OFFICER STATED THAT HE DID NOT KNOW THAT TELVAR W WAS A "FAIR TRADE" ITEM. IT APPEARS THAT DELIVERIES HAVE BEEN COMPLETED AND PAYMENT MADE. WAS SO GREAT AS TO JUSTIFY THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABILITY OF ERROR. IT FOLLOWS THAT THE ACCEPTANCE OF THE BID OF THE GREAT WESTERN CHEMICAL COMPANY WAS IN GOOD FAITH.

B-131974, JUN. 5, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER OF MAY 23, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR GREAT WESTERN CHEMICAL COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. 01-705-57, DATED MARCH 4, 1957, IS BASED.

BY INVITATION NO. QM 45-149-57-27, DATED FEBRUARY 13, 1957, THE AUBURN GENERAL DEPOT, AUBURN, WASHINGTON, REQUESTED BIDS--- TO BE OPENED FEBRUARY 25, 1957, FOR FURNISHING, AMONG OTHER ITEMS, ITEM 2, 1,000 POUNDS OF STERILANT TELVAR W OR EQUAL. THE GREAT WESTERN CHEMICAL COMPANY SUBMITTED A BID OFFERING TO FURNISH THE DESIRED QUANTITY FOR $2.80 PER POUND. AWARD WAS MADE TO THE COMPANY ON MARCH 4, 1957. LATER THE COMPANY ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN THE BID ON ITEM 2, AND THAT THE PRICE OF $2.80 PER POUND WAS AN ERROR SINCE THE "FAIR TRADE" PRICE FOR THE ITEM WAS $2.90 PER POUND. IN SUPPORT OF ITS REQUEST FOR AN INCREASE IN THE CONTRACT PRICE THE CONTRACTOR FURNISHED COPIES OF A BLANK "FAIR TRADE AGREEMENT" EXECUTED BY DUPONT FOR ,TELVAR" WEED KILLER AND A MIMEOGRAPHED PRICE SCHEDULE, WHICH SHOWS CONSUMER PRICES OF $2.90 FOR QUANTITIES OF 1,000 TO 5,000 POUNDS AND $2.80 FOR QUANTITIES OF 5,000 POUNDS. ALSO, THE SCHEDULE CONTAINS A NOTATION THAT "THIS IS A FAIR TRADED ITEM-NO DEVIATION FROM THE ABOVE SCHEDULE IS ALLOWED.'

THE CONTRACTING OFFICER STATED THAT HE DID NOT KNOW THAT TELVAR W WAS A "FAIR TRADE" ITEM; THAT HE HAD NO KNOWLEDGE OF THE FAIR TRADE PRICE; THAT THE ITEM HAD BEEN PURCHASED A YEAR AGO FOR A PRICE OF $2.90 PER POUND; AND THAT HE HAD NO REASON TO SUSPECT AN ERROR IN THE COMPANY'S BID AND RECOMMENDED NO RELIEF. IT APPEARS THAT DELIVERIES HAVE BEEN COMPLETED AND PAYMENT MADE.

UNDER THE FACTS REPORTED, IT DOES NOT APPEAR THAT THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID PRICE ON ITEM 2 OF $2.80 AND THE OTHER BIDS OF $2.90 AND $5.20 PER POUND, WAS SO GREAT AS TO JUSTIFY THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABILITY OF ERROR. IT FOLLOWS THAT THE ACCEPTANCE OF THE BID OF THE GREAT WESTERN CHEMICAL COMPANY WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY IT UNTIL AFTER THE AWARD OF THE CONTRACT--- AND THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION TO BID IS UPON THE BIDDER. SEE FRAZIER DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF AN ERROR WAS MADE IN THE PREPARATION OF THE BID, AS ALLEGED, IT PROPERLY MAY BE ATTRIBUTED SOLELY TO THE CONTRACTOR'S NEGLIGENCE AND SINCE THE ERROR UPON WHICH THE REQUEST FOR RELIEF IS BASED WAS UNILATERAL, NOT MUTUAL, THE CONTRACTOR IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATIONS UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORT AND RECOMMENDATIONS, DATED APRIL 11, 1957, ARE RETURNED HEREWITH.