B-133782, SEP. 25, 1957

B-133782: Sep 25, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

DEPARTMENT OF THE INTERIOR: REFERENCE IS MADE TO LETTER OF SEPTEMBER 11. BIDS WERE REQUESTED. WALSKY WAS ADVISED THAT HIS WAS THE LOW BID "AND HAS BEEN RECOMMENDED FOR ACCEPTANCE. FOR HIS APPROVAL AND THAT "UNTIL APPROVAL BY THE REGIONAL DIRECTOR THIS CONTRACT WILL NOT BECOME EFFECTIVE.'. WALSKY ADVISED THE SUPERINTENDENT THAT HE HAD MADE AN ERROR IN THE PREPARATION OF HIS BID IN THAT HIS TOTAL FOR THE TWO BUILDINGS WAS STATED AS $53. ADDRESSED TO HIM BY THE REGIONAL DIRECTOR IN WHICH HE WAS ADVISED. THAT AN AWARD HAD BEEN MADE AND THAT REFUSAL TO SIGN A CONTRACT WILL CONSTITUTE A DEFAULT WITH COLLECTION ON THE BID BOND. THE QUESTION IN THIS CASE IS WHETHER THE LETTER OF JULY 29. THE ALLEGATION OF ERROR WAS MADE BEFORE ANY RIGHTS AND OBLIGATIONS OF THE PARTIES BECAME FIXED.

B-133782, SEP. 25, 1957

TO MR. HOWARD W. BAKER, REGIONAL DIRECTOR, NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 11, 1957, WITH ENCLOSURES, FROM THE ACTING REGIONAL DIRECTOR, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE AMERICAN CONSTRUCTION COMPANY, COLORADO SPRINGS, COLORADO, ALLEGES IT MADE IN ITS BID SUBMITTED ON PROJECT NO. DIN -W127, DINOSAUR NATIONAL MONUMENT, VERNAL, UTAH.

BY AN INVITATION, DATED JUNE 24, 1957, BIDS WERE REQUESTED--- TO BE OPENED JULY 23, 1957--- FOR THE CONSTRUCTION OF A UTILITY BUILDING AND A RESIDENCE AT DINOSAUR NATIONAL MONUMENT. IN RESPONSE, MR. HERMAN WALSKY, D/B/A AMERICAN CONSTRUCTION COMPANY, SUBMITTED A BID DATED JULY 21, 1957, OFFERING TO CONSTRUCT THE TWO BUILDINGS (ITEM 3) AT A TOTAL COST OF $53,400. FOUR OTHER BIDS ON ITEM 3 RANGED FROM $65,600 TO $95,726.20.

BY LETTER OF JULY 29, 1957, THE SUPERINTENDENT, DINOSAUR NATIONAL MONUMENT, TRANSMITTED THE CONTRACT AND BOND FORMS TO MR. WALSKY FOR EXECUTION. IN THE LETTER MR. WALSKY WAS ADVISED THAT HIS WAS THE LOW BID "AND HAS BEEN RECOMMENDED FOR ACCEPTANCE; " THAT, UPON RETURN OF THE PAPERS, THEY WOULD BE FORWARDED TO THE REGIONAL DIRECTOR, REGION TWO, FOR HIS APPROVAL AND THAT "UNTIL APPROVAL BY THE REGIONAL DIRECTOR THIS CONTRACT WILL NOT BECOME EFFECTIVE.' IN A LETTER DATED AUGUST 5, 1957, MR. WALSKY ADVISED THE SUPERINTENDENT THAT HE HAD MADE AN ERROR IN THE PREPARATION OF HIS BID IN THAT HIS TOTAL FOR THE TWO BUILDINGS WAS STATED AS $53,400 INSTEAD OF $63,400. BECAUSE OF THE ALLEGED ERROR MR. WALSKY HAS DECLINED TO EXECUTE THE CONTRACT DOCUMENTS, NOTWITHSTANDING A LETTER DATED AUGUST 16, 1957, ADDRESSED TO HIM BY THE REGIONAL DIRECTOR IN WHICH HE WAS ADVISED, AMONG OTHER THINGS, THAT AN AWARD HAD BEEN MADE AND THAT REFUSAL TO SIGN A CONTRACT WILL CONSTITUTE A DEFAULT WITH COLLECTION ON THE BID BOND.

AS INDICATED IN MEMORANDUM DATED AUGUST 21, 1957, PREPARED BY THE REGIONAL SOLICITOR, THE QUESTION IN THIS CASE IS WHETHER THE LETTER OF JULY 29, 1957, REFERRED TO ABOVE, CONSTITUTED A VALID ACCEPTANCE OF THE CONTRACTOR'S BID SINCE, IF THE PURPORTED AWARD DID NOT CONSUMMATE THE CONTRACT, THE ALLEGATION OF ERROR WAS MADE BEFORE ANY RIGHTS AND OBLIGATIONS OF THE PARTIES BECAME FIXED.

IT IS WELL SETTLED THAT TO PRODUCE A CONCLUDED CONTRACT AN ACCEPTANCE MUST, AMONG OTHER THINGS, BE ABSOLUTE, UNAMBIGUOUS, UNEQUIVOCAL, WITHOUT CONDITION OR RESERVATION. 1 WILLISTON CONTRACTS 207. IN THE PRESENT CASE, THE LETTER OF JULY 29, 1957, WAS NOT DESIGNATED AS A "NOTICE OF ARD," NOR WAS THERE ANY AFFIRMATIVE STATEMENT THEREIN THAT THE BID HAD BEEN ACCEPTED. RATHER, THE CONTRACTOR WAS ADVISED MERELY THAT HIS BID HAD BEEN RECOMMENDED FOR ACCEPTANCE, AND EXPRESSLY TOLD THAT THE CONTRACT, WHICH HE WAS ASKED TO SIGN, WOULD NOT BECOME EFFECTIVE UNTIL APPROVAL BY THE REGIONAL DIRECTOR. IT WAS NOT UNTIL RECEIPT OF THE LETTER DATED AUGUST 16, 1957, FROM THE REGIONAL DIRECTOR, THAT THE CONTRACTOR WAS ADVISED THAT AN AWARD HAD BEEN MADE. THUS, IT IS APPARENT THAT A LEGAL AND BINDING CONTRACT BETWEEN THE PARTIES HAD NOT BEEN CONSUMMATED PRIOR TO THE TIME THAT THE CONTRACTING OFFICER HAD BEEN APPRISED OF THE ALLEGED ERROR IN THE BID AND OF THE INTENDED BID PRICE. SEE B-97031, MARCH 30, 1951; CF. 33 COMP. GEN. 180, WHERE THE CONTRACTING OFFICER HAD IN FACT ADVISED THE BIDDER OF AN AWARD, EVEN THOUGH SUBJECT TO APPROVAL, AND THE BIDDER HAD SIGNED AND RETURNED THE CONTRACT.

THE ABSTRACT OF BIDS SHOWS THAT THE BID OF MR. WALSKY WAS APPROXIMATELY $12,000 LESS THAN THAT OF THE NEXT HIGHER BIDDER. IN ADDITION, IT IS REPORTED THAT THE BID IS $10,000 LOWER THAN THE ENGINEERS' ESTIMATE, AND THAT ON SEPTEMBER 9 MR. WALSKY FURNISHED ESTIMATE SHEETS TO SUPPORT HIS CLAIM OF ERROR. EXAMINATION OF THESE ESTIMATE SHEETS, WHICH WERE ATTACHED TO A LETTER IN AFFIDAVIT FORM, DISCLOSES THAT AN ERROR OF $10,000 WAS MADE IN ADDING THE INDIVIDUAL ESTIMATED COSTS OF THE TWO STRUCTURES WHICH IN THEMSELVES WERE FAIRLY CLOSE TO THE AMOUNTS QUOTED BY THE NEXT LOWEST BIDDER AND ESTIMATED BY THE GOVERNMENT.

IN VIEW OF THE FOREGOING, THERE IS LITTLE DOUBT THAT THE CONTRACTOR MADE A BONA FIDE ERROR IN ITS BID, AND THE INTENDED LUMP SUM PRICE FOR THE WORK APPEARS TO BE CLEARLY ESTABLISHED. ACCORDINGLY, SINCE THE ERROR WAS EXPLAINED PRIOR TO ANY AWARD AND SUFFICIENT EVIDENCE OF THE INTENDED BID PRICE HAS BEEN FURNISHED, THE BID OF THE COMPANY MAY BE CONSIDERED AS AMENDED TO ACCORD WITH THE INTENDED AMOUNT PROVEN.