B-134554, JAN. 20, 1958

B-134554, JAN. 20, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MAY 7, 1957, FROM THE CHIEF, BUREAU OF YARDS AND DOCKS, C-310D/JJC:U, TRANSMITTING FOR ADVANCE DECISION CLAIM OF THE J. F. PRICHARD AND COMPANY OF CALIFORNIA, A SUPPLIER FOR COST-PLUS-A- FIXED-FEE CONTRACTOR, POMEROY-HAWAIIAN DREDGING-BECHTEL (CONTRACT NO. NOY- 79345), FOR $1,940, REPRESENTING THE COST OF CERTAIN ITEMS OF SPARE PARTS WHICH INADVERTENTLY WAS OMITTED FROM ITS BID PRICE ON A COOLING TOWER SOLD TO THE PRIME CONTRACTOR UNDER PURCHASE ORDER NO. SF-P-14,040, DATED AUGUST 10, 1955.

BY LETTER DATED MARCH 28, 1957, THE PRIME CONTRACTOR, POMEROY HAWAIIAN DREDGING-BECHTEL, FORMALLY ASSOCIATED ITSELF WITH THE CLAIMANT AND REQUESTED THAT FAVORABLE CONSIDERATION BE GIVEN THE INSTANT CLAIM ON THE GROUND THAT THE OMISSION OF THE COST OF THE PARTS FROM THE CLAIMANT'S BID ON THE COOLING TOWER RESULTED FROM AN "HONEST ERROR.'

BY REQUEST FOR BID NO. 5449 (REQUISITION NS-796), DATED JULY 14, 1955, THE PRIME CONTRACTOR SOLICITED PROPOSALS ON A MULTI-CELL INDUCED DRAFT COOLING TOWER, AS SPECIFIED, SCHEDULED FOR DELIVERY, F.O.B. NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. THE REQUIRED SERVICES WERE DESCRIBED ON PAGE 1 OF THE INVITATION, AS FOLLOWS:

"II. GENERAL DESCRIPTION

THE WORK PROVIDES FOR THE FURNISHING COMPLETE DESIGN AND MANUFACTURING OF A MULTI-CELL INDUCED DRAFT, CROSS FLOW OR COUNTERFLOW WOOD FILLED COOLING TOWER COMPLETE WITH FILLING, LOUVERS, BAFFLES, DRIFT ELIMINATORS, WATER DISTRIBUTION SYSTEM, HARDWARE, FRAMING AND ENCLOSURES, SUPPORTS, PARTITIONS, INDUCED DRAFT FANS, FAN DRIVES, ELECTRIC MOTORS (TOTALLY ENCLOSED FAN COOLED TYPE) ACCESS WALKWAYS AND LANDINGS, LADDERS, BASIN FITTINGS; ATTACHED PIPING AND FITTINGS, SPARE PARTS AND SPECIAL TOOLS, INSTRUCTION BOOKS, AND ERECTION AND OPERATING INSTRUCTIONS.'

SECTION 2, PAGE 2-2 OF THE SPECIFICATIONS, PROVIDED:

"2-07. REPAIR OR MAINTENANCE PARTS.---THE FOLLOWING LIST OF REPAIR OR MAINTENANCE SPARE PARTS SHALL BE FURNISHED BY THE SUBCONTRACTOR:

TABLE

ITEM QUANTITY

FAN DRIVE MOTOR ONE ONLY

FAN DRIVE GEAR BOX ONE ONLY

FAN DRIVE SHAFT ONE ONLY

FAN COMPLETE ONE ONLY

WATER DISTRIBUTION INSERTS ONE SET FOR ONE CELL.'

IN ITS PROPOSAL NO. 542813, DATED JULY 27, 1955, THE J. F. PRITCHARD AND COMPANY OF CALIFORNIA SUBMITTED AN UNQUALIFIED LUMP-SUM BID OF $17,360 FOR THE ADVERTISED SERVICES. THIS BID, BEING THE LOWEST RESPONSIVE BID RECEIVED UNDER THE ABOVE INVITATION, WAS ACCEPTED BY PURCHASE ORDER NO. SF -P-14,040, ISSUED BY THE PRIME CONTRACTOR ON AUGUST 10, 1955. THERE WAS NOTHING IN THE CLAIMANT'S BID WHICH WAS SUGGESTIVE OF ERROR OR OMISSION AT THE TIME OF ITS ACCEPTANCE, NOR WAS THERE ANY INDICATION THAT THE LUMP-SUM BID PRICE OF $17,360 QUOTED ON THE EQUIPMENT WAS EXCLUSIVE OF THE COST OF THE REQUIRED SPARE PARTS. FURTHERMORE, THE CLAIMANT'S BID PRICE IS NOT CONSIDERED TO BE DISPROPORTIONATE TO THE AMOUNTS OF THE OTHER BIDS RECEIVED UNDER THIS INVITATION.

THE CLAIMANT'S ERROR IN ALLEGEDLY HAVING FAILED TO INCLUDE IN ITS QUOTATION THE PRICE OF THE REQUIRED SPARE PARTS, VALUED AT $1,940, FIRST WAS ALLEGED IN A TELEPHONE CONVERSATION HAD WITH THE PRIME CONTRACTOR'S PURCHASING AGENT ON AUGUST 30, 1955, WHICH, OF COURSE, WAS SUBSEQUENT TO THE AWARD. THIS ALLEGATION OF ERROR WAS CONFIRMED BY LETTER DATED AUGUST 31, 1955, WHEREIN REQUEST WAS MADE THAT THE CONTRACT PRICE OF THE EQUIPMENT BE INCREASED BY $1,940 TO COVER THE COST OF THE SPARE PARTS. AFTER THE EXCHANGE OF FURTHER CORRESPONDENCE ON THE SUBJECT, THE PRIME CONTRACTOR ADVISED THE CLAIMANT BY TELEGRAM DATED SEPTEMBER 13, 1955, AS FOLLOWS:

"PURCHASE ORDER SF-P-14,040 REMAINS AS WRITTEN. NO EXCEPTIONS MADE IN YOUR BID OF $17,360.00 WHICH COVERS ALL ITEMS INCLUDING REPAIR AND MAINTENANCE PARTS AND BRONZE OR OTHER APPROVED CORROSION-RESISTING HARDWARE. IMMEDIATE REPLY CONFIRMATION REQUESTED.'

BY TELEGRAM DATED SEPTEMBER 14, 1955, THE CLAIMANT ADVISED THE PRIME CONTRACTOR THAT,"WE ACCEPT YOUR ORDER SF-P-14,040.'

THE CLAIMANT HAS FURNISHED WHAT PURPORT TO BE ITS ORIGINAL WORKSHEETS, WHICH WOULD TEND TO INDICATE THAT THE PRICE OF THE SPARE PARTS WAS NOT INCLUDED IN ITS QUOTED BID PRICE ON THE EQUIPMENT. HOWEVER THAT MAY BE, THE LAW IS CLEAR THAT MUTUAL MISTAKE AFFORDS THE ONLY LEGAL JUSTIFICATION FOR THE REFORMATION OR MODIFICATION OF A CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. HERE, IRRESPECTIVE OF WHETHER A BONA FIDE MISTAKE ACTUALLY WAS MADE BY THE CLAIMANT, THE RECORD SHOWS THAT THE PURCHASING AGENT OF THE PRIME CONTRACTOR WAS NOT AWARE OF IT, NOR DID HE HAVE ANY SOUND REASON TO QUESTION THE AMOUNT OF THE CLAIMANT'S BID, AT THE TIME HE MADE THE INSTANT AWARD. ACCORDINGLY, THE CONTRACT WAS LET TO THE CLAIMANT IN APPARENT GOOD FAITH AND WITHOUT NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF THE MISTAKE. IN THE CIRCUMSTANCES, THE CONCLUSION IS INESCAPABLE THAT THE ERROR OF OMISSION HERE ALLEGED WAS UNILATERAL IN CHARACTER, AND HENCE, DOES NOT ENTITLE THE CLAIMANT TO THE RELIEF REQUESTED. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683. FURTHERMORE, THE CLAIMANT, AFTER ALLEGATION OF MISTAKE, WAS INFORMED BY THE PRIME CONTRACTOR THAT THE PURCHASE ORDER WOULD NOT BE CHANGED AND REPLIED THAT IT WOULD ACCEPT THE PURCHASE ORDER AS WRITTEN. HENCE, IT APPEARS THERE IS FOR APPLICATION THE PRINCIPLE LAID DOWN IN THE CASES OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.CLS. 699, AND THE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON CO., INC., 133 F.2D 399. IN THOSE CASES RELIEF FOR AMOUNTS CLAIMED BY REASON OF ERRORS IN BIDS WAS DENIED ON THE GROUND THAT THE CONTRACTORS COULD NOT ELECT TO ACCEPT CONTRACTS WHEN THEY WERE AWARE OF ERRORS IN THEIR BIDS AND AFTER PERFORMANCE, REPUDIATE THE CONTRACTS AND RECOVER AS IF THERE HAD NOT BEEN ANY CONTRACTS.