B-132101, JUN. 18, 1957

B-132101: Jun 18, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED JUNE 4. THE CONTRACTOR STATED THAT IT UNDERSTOOD THAT THE INSTRUCTION LABEL WAS NOT TO BE PLACED IN THE JACKET. IF THIS UNDERSTANDING WAS INCORRECT. IT REQUESTED TO BE ADVISED OF THE INFORMATION THAT WAS TO BE PRINTED ON THE LABEL. THE CONTRACTOR WAS GRANTED PERMISSION TO ELIMINATE THE LABEL FROM THE JACKETS. "PROVIDED ALL SAVINGS WILL REVERT TO THE GOVERNMENT.'. WHEN ALL CONTRACTS AWARDED DURING CERTAIN PERIODS WERE REVIEWED. NO ACTION WAS TAKEN TO DETERMINE OR TO COLLECT THE SAVINGS THAT THE CONTRACTOR DERIVED AS A RESULT OF THE ELIMINATION OF THE LABEL. WHEN DEMAND WAS MADE ON THE CONTRACTOR FOR THE SAVINGS OF $204.60.

B-132101, JUN. 18, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JUNE 4, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) WHO REQUESTS A DECISION WHETHER CONTRACT NO. W-30-280-QM-10148, DATED OCTOBER 5, 1948, MAY BE REFORMED SO AS TO RELIEVE THE CONTRACTOR, SIGMUND EISNER CO., RED BANK, NEW JERSEY, FROM REFUNDING THE SAVINGS DERIVED BY THE ELIMINATION OF THE REQUIREMENT THAT ONE INSTRUCTION LABEL BE ATTACHED TO EACH WOOL JACKET.

CONTRACT W-30-280-QM-10148, DATED OCTOBER 5, 1948, REQUIRED THE MANUFACTURE OF 20,000 WOOL JACKETS IN ACCORDANCE WITH U.S. ARMY SPECIFICATION NO. 8-162, DATED DECEMBER 3, 1947. THE SPECIFICATION PROVIDED THAT A LABEL WITH INSTRUCTIONS FOR FITTING WOULD BE SUPPLIED BY THE MILITARY PLANNING DIVISION, RESEARCH AND DEVELOPMENT BRANCH. LETTER DATED NOVEMBER 4, 1948, THE CONTRACTOR STATED THAT IT UNDERSTOOD THAT THE INSTRUCTION LABEL WAS NOT TO BE PLACED IN THE JACKET, BUT IF THIS UNDERSTANDING WAS INCORRECT, IT REQUESTED TO BE ADVISED OF THE INFORMATION THAT WAS TO BE PRINTED ON THE LABEL. BY LETTER DATED NOVEMBER 9, 1948, THE CONTRACTOR WAS GRANTED PERMISSION TO ELIMINATE THE LABEL FROM THE JACKETS,"PROVIDED ALL SAVINGS WILL REVERT TO THE GOVERNMENT.'

UNTIL JUNE 1956, WHEN ALL CONTRACTS AWARDED DURING CERTAIN PERIODS WERE REVIEWED, NO ACTION WAS TAKEN TO DETERMINE OR TO COLLECT THE SAVINGS THAT THE CONTRACTOR DERIVED AS A RESULT OF THE ELIMINATION OF THE LABEL.

WHEN DEMAND WAS MADE ON THE CONTRACTOR FOR THE SAVINGS OF $204.60, WHICH WAS REALIZED BY THE ELIMINATION OF THE LABELS, THE CONTRACTOR ALLEGED THAT PRIOR TO SUBMITTING ITS BID THE CONTRACTING OFFICER ADVISED THAT NO INSTRUCTION LABEL WAS REQUIRED, THAT CONSEQUENTLY THE COST FOR THE LABEL HAD NOT BEEN INCLUDED IN THE BID AND THAT THE INCLUSION OF THE LABEL REQUIREMENT IN THE CONTRACT WAS A MUTUAL MISTAKE WARRANTING A REFORMATION OF THE CONTRACT. IN SUPPORT OF ITS ALLEGATIONS, THE CONTRACTOR FURNISHED AN AFFIDAVIT FROM AN EMPLOYEE WHO MADE SUBSTANTIALLY THE SAME ALLEGATIONS AS THE CONTRACTOR, EXCEPT THAT THE PERSON WHO ADVISED HIM ABOUT THE ELIMINATION OF THE LABEL WAS A REPRESENTATIVE OF THE QUARTERMASTER PURCHASING OFFICE.

THE CONTRACTING OFFICER'S LETTER OF NOVEMBER 9, 1948, GRANTING THE CONTRACTOR PERMISSION TO DEVIATE FROM THE REQUIREMENTS OF THE CONTRACT AND TO ELIMINATE THE INSTRUCTION LABEL PROVIDED ALL SAVINGS REVERTED TO THE GOVERNMENT TENDS TO INDICATE THAT THE CONTRACTING OFFICER CONSIDERED THE WRITTEN CONTRACT TO REFLECT THE ACTUAL AGREEMENT OF THE PARTIES. GENERALLY A CONTRACT MAY NOT BE REFORMED ON THE BASIS OF MUTUAL MISTAKE IN THE ABSENCE OF A STATEMENT FROM THE CONTRACTING OFFICER WHO SIGNED THE CONTRACT THAT HIS INTENTION WAS OTHER THAN THAT EXPRESSED IN THE WRITTEN CONTRACT. 26 COMP. GEN. 899. ACCORDINGLY, IN VIEW OF THE SERIOUS AND SUBSTANTIAL DOUBT THAT THE CONTRACTING OFFICER HAD AGREED TO ANY TERMS OTHER THAN THOSE CONTAINED IN THE EXPRESSED WRITTEN CONTRACT AND IN VIEW OF THE ABSENCE OF A STATEMENT FROM HIM TO THAT EFFECT, THERE IS NO CLEAR AND CONVINCING EVIDENCE SUFFICIENT TO PROVE A MUTUAL MISTAKE THAT WILL AVOID THE EFFECT OF THE WRITTEN CONTRACT. FURTHERMORE, THE CONTRACTING OFFICER WOULD HAVE BEEN WITHOUT AUTHORITY, WHERE COMPETITIVE BIDDING IS INVITED, TO VARY ORALLY THE TERMS OF THE INVITATION FOR BIDS WHICH AFFECT EITHER THE PRICE, QUANTITY OR QUALITY OF THE ARTICLES SO AS TO BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS.

ONE SET OF THE ENCLOSURES TRANSMITTED WITH THE LETTER OF THE ASSISTANT SECRETARY IS RETURNED HEREWITH.