B-132412, JUL. 19, 1957

B-132412: Jul 19, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 28. THE FILE SUBMITTED WITH THE ASSISTANT SECRETARY'S LETTER INDICATES THAT ORAL QUOTATIONS FOR SEVENTEEN LINE ITEMS WERE SOLICITED ON DECEMBER 17. THE THREE BIDDERS WERE REQUESTED TO VERIFY THEIR BIDS. THE CONTRACT WAS AWARDED TO COONEY BROTHERS. WHOSE NOTICE OF ACCEPTANCE OF THE PURCHASE ORDER WAS SIGNED AND RETURNED ON DECEMBER 20. STATING THAT THE PRICE SHOULD HAVE BEEN $1.50 PER POUND IN LIEU OF $0.75 PER POUND. AS WAS STATED IN OUR DECISION OF JULY 13. THE BASIC QUESTION INVOLVED IN CASES SUCH AS THIS IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. WHILE IS TRUE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE BY REASON OF COMPARATIVE PRICES THAT AN ERROR MAY HAVE BEEN MADE IN THE LOW BID.

B-132412, JUL. 19, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 28, 1957, FROM THE ASSISTANT SECRETARY (LOGISTICS), FORWARDING AN ALLEGATION OF ERROR IN THE BID SUBMITTED BY COONEY BROTHERS, INC., AFTER AWARD OF PURCHASE ORDER O.I. 6054-LP-57, AND REQUESTING OUR DECISION REGARDING THE CONTRACTOR'S APPLICATION FOR RELIEF.

THE FILE SUBMITTED WITH THE ASSISTANT SECRETARY'S LETTER INDICATES THAT ORAL QUOTATIONS FOR SEVENTEEN LINE ITEMS WERE SOLICITED ON DECEMBER 17, 1956, FROM THREE FIRMS. IN VIEW OF THE WIDE VARIATION AS TO THE QUOTED PRICES FOR ITEM 16, DURIRON ROPE PACKING, THE THREE BIDDERS WERE REQUESTED TO VERIFY THEIR BIDS. A REPRESENTATIVE OF COONEY BROTHERS, INC., VERIFIED THE CORRECTNESS OF ITS BID WHEREUPON, ON DECEMBER 19, 1956, THE CONTRACT WAS AWARDED TO COONEY BROTHERS, INC., WHOSE NOTICE OF ACCEPTANCE OF THE PURCHASE ORDER WAS SIGNED AND RETURNED ON DECEMBER 20, 1956. ON DECEMBER 26, 1956, THE CONTRACTOR ADVISED BY TELEPHONE THAT AN ERROR HAD BEEN MADE IN THE COMPUTATION OF ITEM 16, STATING THAT THE PRICE SHOULD HAVE BEEN $1.50 PER POUND IN LIEU OF $0.75 PER POUND, AS QUOTED. SUBSEQUENTLY, ON FEBRUARY 4, 1957, THE CONTRACTOR FURNISHED AN INVOICE DATED JANUARY 23, 1957, FROM ITS SUPPLIER, SHOWING ITS COST FOR THE ITEM IN QUESTION AS $1.50 PER POUND.

AS WAS STATED IN OUR DECISION OF JULY 13, 1956, B-128316, 36 COMP. GEN. 27, TO YOU, THE BASIC QUESTION INVOLVED IN CASES SUCH AS THIS IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. WHILE IS TRUE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE BY REASON OF COMPARATIVE PRICES THAT AN ERROR MAY HAVE BEEN MADE IN THE LOW BID, THE RECORD DOES NOT INDICATE THAT THE PRICE DIFFERENCES WERE SO GREAT THAT THE LOW BID PRICE NECESSARILY MUST HAVE BEEN ERRONEOUS. UNDER THE CIRCUMSTANCES, THE ONLY DUTY IMPOSED ON THE CONTRACTING OFFICER PRIOR TO AWARD WAS TO VERIFY THAT THE BIDDER INTENDED TO SUBMIT A BID OF $0.75 PER POUND FOR ITEM 16 AND INTENDED TO BE BOUND BY THE CONTRACTING OFFICER'S ACCEPTANCE THEREOF. SUCH DUTY WAS COMPLETELY DISCHARGED WHEN, UPON BEING ADVISED BY THE PURCHASING AGENT TO REEXAMINE ITS BID AND CONFIRM THE BID PRICE BECAUSE IT WAS CONSIDERED TO BE LOW, THE REPRESENTATIVE OF COONEY BROTHERS, INC., VERIFIED THE $0.75 PER POUND PRICE AS CORRECT AND INDICATED THAT HE WANTED TO LET IT STAND. THE RULE IS WELL SETTLED THAT WHERE A BIDDER IS AFFORDED A PROPER OPPORTUNITY TO VERIFY HIS BID PRICE PRIOR TO AWARD, THE CONTRACTING OFFICER IS UNDER NO OBLIGATION TO MAKE FURTHER INQUIRY AS TO THE CORRECTNESS OF THE BID. SEE CARNEGIE STEEL COMPANY V. CONNELLY, 97A. 774; SHRIMPTON MFG. COMPANY V. BRIN, 125 S.W. 942.

ON THE BASIS OF THE PRESENT RECORD IT MUST THEREFORE BE CONCLUDED THAT ANY ERROR WHICH WAS DISCOVERED IN THE BID PRICE AFTER VERIFICATION WAS UNILATERAL--- NOT MUTUAL--- SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND THAT ACCEPTANCE OF THE VERIFIED BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY 249 U.S. 13; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS ON WHICH PAYMENT IN EXCESS OF THE CONTRACT PRICE MAY BE MADE TO THE CONTRACTOR.

ONE SET OF THE PAPERS IN THE CASE IS BEING RETAINED. THE OTHER PAPERS ARE RETURNED.