B-132377, JUL. 16, 1957

B-132377, JUL. 16, 1957

TO THE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO LETTER DATED JUNE 27, 1957, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY GOODFELLOW BROTHERS, INC., TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO A REQUEST FOR BIDS ISSUED BY THE PORTLAND REGIONAL OFFICE, BUREAU OF PUBLIC ROADS, FOR THE CONSTRUCTION OF WASHINGTON FOREST HIGHWAY, PROJECT 13-A1, B1, D2, UNIT 2, RANDLE-YAKIMA HIGHWAY.

THE 12 BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE PUBLICLY OPENED ON MAY 29, 1957. THE LOW BID, SUBMITTED BY GOODFELLOW BROTHERS, INC., WAS IN THE AMOUNT OF $549,012.50. THE THREE NEXT LOWEST BIDS WERE IN THE AMOUNTS OF $631,812.40, $654,088 AND $730,659.90. THE GOVERNMENT'S ESTIMATE OF THE COST OF THE PROJECT WAS $647,650.

PRIOR TO THE BID OPENING A TELEGRAM WAS RECEIVED FROM GOODFELLOW BROTHERS, INC., REDUCING THE UNIT PRICE FOR ITEM 27A (1), STATION-YARD OVERHAUL, BY 3 1/2 CENTS PER STATION-YARD, THEREBY REDUCING THE AGGREGATE AMOUNT OF THE BID BY $39,305. THE BID OF GOODFELLOW BROTHERS, INC., AS MODIFIED, IN THE AMOUNT OF $549,012.50, BEING THE LOWEST RECEIVED, WAS ACCEPTED BY LETTER OF MAY 29, 1957.

ON JUNE 3, 1957, MR. JAMES B. GOODFELLOW, SR., TELEPHONED THE CONTRACTING OFFICE AND ADVISED THAT A RATHER LARGE ERROR HAD BEEN MADE IN THE CORPORATION'S BID AND REQUESTED RELEASE FROM THE BID AND CANCELLATION OF THE AWARD WITH THE RETURN OF THE BID BOND. HE WAS ADVISED THAT IT WOULD BE NECESSARY TO SUBMIT THE CORPORATION'S ORIGINAL COMPUTATION SHEETS TOGETHER WITH A LETTER OF EXPLANATION. THE FOLLOWING DAY, JUNE 4, MR. GOODFELLOW CALLED IN PERSON AT THE PORTLAND REGIONAL OFFICE AND DELIVERED THE CORPORATION'S ORIGINAL COMPUTATION SHEETS AND A LETTER OF THE SAME DATE EXPLAINING THE ALLEGED ERROR AND THE CAUSES THEREOF.

IT IS ALLEGED THAT MR. GOODFELLOW'S BROTHER SUFFERED A STROKE ON THE DATE HE WAS PREPARING THE BID AND THE BID WAS TURNED OVER TO OTHER EMPLOYEES FOR COMPLETION; THAT AFTER IT WAS PREPARED HE SIGNED THE BID BUT DID NOT CHECK THE FIGURES IN HIS USUAL MANNER PRIOR TO SUBMITTING THE BID, AND THAT BECAUSE OF HIS BROTHER'S SERIOUS ILLNESS HE WAS UNABLE TO ATTEND THE BID OPENING AS HE PROBABLY WOULD HAVE OTHERWISE DONE. THE BASIS FOR THE ALLEGED ERROR IS REPORTED TO HAVE BEEN AS FOLLOWS: AFTER THE ORIGINAL BID FIGURES WERE PREPARED IT WAS DECIDED TO REDUCE TO UNIT PRICES FOR CERTAIN ITEMS AND THEN ADD THE DECREASES TO THE UNIT PRICE FOR ITEM 26 (1). THAT BASIS, AFTER COMPUTING THE UNIT PRICE OF $0.32 PER CUBIC YARD MILE FOR ITEM 28 (2) IT WAS DECIDED TO QUOTE ONLY $0.05 FOR THE ITEM AND TRANSFER THE DIFFERENCE TO ITEM 26 (1). AN ERROR WAS MADE IN SUBTRACTING, HOWEVER, AND ONLY $0.17 WAS CARRIED FORWARD RATHER THAN $0.27. THIS RESULTED IN AN UNDER QUOTATION ON ITEM 26 (1) OF A TOTAL OF $54,600.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. ALTHOUGH THE DIFFERENCES BETWEEN THE AMOUNT OF THE LOW BID AND THE SECOND LOW BID, AND BETWEEN THE LOW BID AND THE GOVERNMENT'S ESTIMATE, WERE SUBSTANTIAL, THEY WERE NOT SO LARGE, IN RELATION TO THE OVERALL PRICE RANGE, AS TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF PROBABLE ERROR--- PARTICULARLY IN THE LIGHT OF THE TELEGRAPHIC MODIFICATION OF THE GOODFELLOW BID ON THE VERY DAY OF THE OPENING, WHICH WOULD INDICATE THAT THE BID HAD BEEN REVIEWED BY THE BIDDER AND WAS CONFIRMED EXCEPT AS TO THE ITEM MODIFIED.

SINCE THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER THE AWARD, THE ACCEPTANCE OF THE BID IN THE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL- - NOT MUTUAL--- AND THEREFORE AFFORDS NO BASIS FOR GRANTING RELIEF TO THE CONTRACTOR. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR RELIEVING GOODFELLOW BROTHERS, INC., FROM LIABILITY UNDER THE TERMS OF ITS ACCEPTED BID.

THE PAPERS, WITH THE EXCEPTION OF THE BIDDER'S COMPUTATION SHEETS AND AN ABSTRACT OF THE BIDS RECEIVED, ARE RETURNED.