B-132340, JUL. 15, 1957

B-132340: Jul 15, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 24. TO HAVE BEEN MADE IN ITEM NO. 2 OF ITS PROPOSAL FOR FURNISHING FIVE ITEMS OF WINDOW GLASS TO HEADQUARTERS JAPAN PROCUREMENT AGENCY. THE PROPOSAL WAS ACCEPTED AND BECAME THE BASIS OF NEGOTIATED CONTRACT NO. THE ACCEPTED PROPOSAL AS TO ITEM NO. 2 WAS FOR FURNISHING 50. THE ENTIRE CONTRACT PRICE WAS $149. THE PRICE ORIGINALLY PROPOSED WAS $2.63 PER SHEET BUT IT WAS REDUCED TO $1.67 AS A RESULT OF NEGOTIATIONS AND A CHANGE IN SPECIFICATIONS MADE AT THE REQUEST OF THE CONTRACTOR. IT IS REPORTED BY THE CONTRACTING OFFICER THAT. THE OTHER PROPOSAL RECEIVED ON ITEM NO. 2 WAS AT A UNIT PRICE OF $2.90. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE GLASS COVERED BY ITEM NO. 2 WAS $2.235 PER SHEET.

B-132340, JUL. 15, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 24, 1957, FROM THE ASSISTANT SECRETARY (LOGISTICS), WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY DRESCHBURG AND CIGRANG S.A., 152 CHAUSSEE DE MALINES, ANTWERP, BELGIUM, TO HAVE BEEN MADE IN ITEM NO. 2 OF ITS PROPOSAL FOR FURNISHING FIVE ITEMS OF WINDOW GLASS TO HEADQUARTERS JAPAN PROCUREMENT AGENCY, YOKOHAMA, JAPAN. THE PROPOSAL WAS ACCEPTED AND BECAME THE BASIS OF NEGOTIATED CONTRACT NO. DA-92-557-FEC- 22268, DATED AUGUST 25, 1955.

THE ACCEPTED PROPOSAL AS TO ITEM NO. 2 WAS FOR FURNISHING 50,000 SHEETS OF GLASS AT A PRICE OF $1.67 EACH, INCLUDING $0.17 AS THE COST OF PACKING- -- A TOTAL PRICE OF $83,500. THE ENTIRE CONTRACT PRICE WAS $149,854.18. THE PRICE ORIGINALLY PROPOSED WAS $2.63 PER SHEET BUT IT WAS REDUCED TO $1.67 AS A RESULT OF NEGOTIATIONS AND A CHANGE IN SPECIFICATIONS MADE AT THE REQUEST OF THE CONTRACTOR. IT IS REPORTED BY THE CONTRACTING OFFICER THAT, WITH MINOR ADJUSTMENTS FOR BREAKAGE, THE CONTRACT HAS BEEN FULLY PERFORMED AND FINAL PAYMENT AT THE CONTRACT RATE MADE BY THE GOVERNMENT. THE OTHER PROPOSAL RECEIVED ON ITEM NO. 2 WAS AT A UNIT PRICE OF $2.90. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE GLASS COVERED BY ITEM NO. 2 WAS $2.235 PER SHEET, INCLUDING $0.215 PER SHEET AS THE COST OF PACKING.

BY LETTER DATED FEBRUARY 11, 1956, THE CONTRACTOR'S AGENT, LUNGAN DEVELOPMENT AND TRADING COMPANY, LTD., REQUESTED THAT THE UNIT PRICE FOR ITEM NO. 2 BE INCREASED FROM $1.67 TO $1.92, THEREBY INCREASING THE CONTRACT PRICE IN THE AMOUNT OF $12,456, BECAUSE OF AN ALLEGED ERROR IN THE PROPOSAL. IN THE CONTRACTOR'S LETTER OF DECEMBER 20, 1955, TO THE AGENT, IT WAS STATED, IN SUBSTANCE, THAT IN THE ABSENCE OF THE STAFF MEMBER WHO USUALLY HANDLES SUCH MATTERS ANOTHER EMPLOYEE FAILED TO INCLUDE IN THE PROPOSAL THE USUAL 20 PERCENT EXTRA FOR PACKING IN CASES OF 100 SQUARE FEET. IN ITS LETTER OF JANUARY 17, 1956, TO ITS AGENT, THE CONTRACTOR STATED THAT THE PACKING COST SHOULD HAVE BEEN $0.42 EACH INSTEAD OF $0.17. HOWEVER, IN A LETTER DATED OCTOBER 31, 1956, THE CONTRACTOR STATED THAT THE EMPLOYEE WHO MADE THE ERROR WAS NO LONGER IN ITS EMPLOY; AND ITS LETTER DATED NOVEMBER 6, 1956, INCLUDES THE STATEMENT THAT THE WORKING SHEET COULD NOT BE FOUND.

BY HIS LETTER DATED MARCH 14, 1956, THE CONTRACTING OFFICER DENIED THE CONTRACTOR'S CLAIM. ON APPEAL, THE BOARD OF CONTRACT APPEALS, UNITED STATES ARMY FORCES, FAR EAST AND EIGHTH U.S. ARMY, DISMISSED THE APPEAL ON THE GROUND THAT THE BOARD WAS WITHOUT JURISDICTION (AFFE/8A BCA NO. 55).

IN THE CONTRACTING OFFICER'S LETTER DATED MARCH 14, 1956, TO THE CONTRACTOR, ABOVE REFERRED TO, IT IS STATED IN PART:

"C. THAT THE DIFFERENCE BETWEEN THE PRICE OFFERED FOR ITEM 2, THE OTHER OFFERS ON THE SAME ITEM, AND THE GOVERNMENT ESTIMATE WAS APPROXIMATELY THE SAME AS THE DIFFERENCE AMONG SIMILAR FIGURES ON OTHER PROCUREMENT ACTIONS IN WHICH YOU PARTICIPATED.'

THE QUOTED STATEMENT IS SUPPORTED BY A TABULATION INCLUDED IN THE SUCCESSOR CONTRACTING OFFICER'S STATEMENT SHOWING THAT IN FOUR RECENT INSTANCES WHERE THIS CONTRACTOR WAS LOW BIDDER ITS BIDS--- INCLUDING THE COST OF PACKING--- WERE CONSIDERABLY BELOW THE GOVERNMENT ESTIMATES AND STILL FURTHER BELOW THE NEXT LOW BIDS.

IN 20 COMP. GEN. 652 IT IS STATED:

"THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362.'

IN THE INSTANT MATTER, NO SATISFACTORY EXPLANATION OR EVIDENCE HAS BEEN FURNISHED THAT THERE WAS AN ERROR IN THE BID FOR WHICH RELIEF MAY BE AUTHORIZED. SUCH ERROR AS MAY HAVE BEEN MADE WAS NOT MUTUAL AND IT WAS NOT SO APPARENT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. NEITHER WAS THE ALLEGED ERROR INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. ACCORDINGLY, THE ESTABLISHED RULE ABOVE QUOTED IS FOR APPLICATION HERE. THE ACCEPTANCE OF THE BID CONSUMMATED A BINDING AND VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 55; 26 COMP. GEN. 415; 29 ID. 323.

IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT. 14 COMP. GEN. 468; 20 ID. 703 AND COURT CASES CITED.

FOR THE REASONS ABOVE SET FORTH, THERE APPEARS NO VALID BASIS FOR INCREASING THE CONTRACT PRICE.