B-135210, MAR. 15, 1958

B-135210: Mar 15, 1958

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ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 10. WAS AWARDED. THE WORK TO BE PERFORMED WAS DIVIDED INTO NINE ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. IT IS REPORTED THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $133. THE CORPORATION WAS ADVISED THAT IT HAD MADE AN ERROR IN EXTENDING THE UNIT BID PRICE FOR ITEM 3 AND IN THE ADDITION OF THE ITEMS MAKING THE TOTAL BID PRICE. THAT THE CORPORATION WAS ALSO REQUESTED TO CONFIRM THE CORRECTED TOTAL PRICE OF $65. IT IS REPORTED THAT SEVERAL DAYS AFTER RECEIPT OF THE TELEGRAM REQUESTING CONFIRMATION OF THE BID. THAT THE PRESIDENT OF THE CORPORATION STATED THAT THE REDUCTION IN HIS BID WAS BASED ON THE USE OF DEPOSIT "B.

B-135210, MAR. 15, 1958

TO THE HONORABLE LEWIS L. STRAUSS, CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 10, 1958, WITH ENCLOSURES, FROM THE GENERAL MANAGER, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE FORD CONSTRUCTION COMPANY, INC., PROVO, UTAH, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. AT/10-1/-915 DATED SEPTEMBER 20, 1957, WAS AWARDED.

THE IDAHO OPERATIONS OFFICE, ATOMIC ENERGY COMMISSION, IDAHO FALLS, IDAHO, BY INVITATION NO. AT/10-1/-915, REQUESTED BIDS--- TO BE OPENED ON SEPTEMBER 18, 1957--- FOR THE PRODUCTION AND STOCKPILING OF CONCRETE AGGREGATES AT THE NATIONAL REACTOR TESTING STATION IN IDAHO. THE WORK TO BE PERFORMED WAS DIVIDED INTO NINE ITEMS FOR THE PURPOSES OF SUBMITTING BIDS AND MAKING PAYMENT FOR THE WORK. IN RESPONSE THE FORD CONSTRUCTION COMPANY, INC., SUBMITTED A BID DATED SEPTEMBER 17, 1957, OFFERING TO PERFORM THE WORK DESCRIBED UNDER ITEMS 1 TO 9, INCLUSIVE, FOR THE TOTAL AGGREGATE BID PRICE OF $169,052. BY TELEGRAM DATED SEPTEMBER 18, 1957, RECEIVED PRIOR TO BID OPENING TIME, THE CORPORATION REDUCED ITS UNIT BID PRICES FOR ITEMS 1 AND 2 BY $0.10 AND ITS UNIT BID PRICES FOR ITEMS 3 AND 4 BY $0.50. THE ABSTRACT OF BIDS SHOWS THAT THE ONLY OTHER BIDDER ON THE WORK QUOTED A TOTAL AGGREGATE BID PRICE OF $213,139, AND IT IS REPORTED THAT THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $133,880.

IN HIS LETTER THE GENERAL MANAGER STATED THAT BY TELEGRAM DATED SEPTEMBER 19, 1957, THE CORPORATION WAS ADVISED THAT IT HAD MADE AN ERROR IN EXTENDING THE UNIT BID PRICE FOR ITEM 3 AND IN THE ADDITION OF THE ITEMS MAKING THE TOTAL BID PRICE; AND THAT THE CORPORATION WAS ALSO REQUESTED TO CONFIRM THE CORRECTED TOTAL PRICE OF $65,772 FOR ITEM 3 AND THE CORRECTED TOTAL AGGREGATE BID PRICE OF $152,951.

IT IS REPORTED THAT SEVERAL DAYS AFTER RECEIPT OF THE TELEGRAM REQUESTING CONFIRMATION OF THE BID, THE PRESIDENT OF THE FORD CONSTRUCTION COMPANY, INC., CONTACTED ONE OF THE IDAHO OPERATIONS OFFICE ENGINEERS AND INQUIRED WHETHER HE COULD SET UP HIS PLANT IN DEPOSIT "B," A DIFFERENT AGGREGATE DEPOSIT FROM THAT REQUIRED IN THE SPECIFICATIONS; THAT THE PRESIDENT OF THE CORPORATION STATED THAT THE REDUCTION IN HIS BID WAS BASED ON THE USE OF DEPOSIT "B," WHICH HE STATED WAS MORE FAVORABLE FOR PRODUCTION OF SAND; AND THAT WHEN THE PRESIDENT OF THE CORPORATION WAS ADVISED THAT HE WOULD NOT BE PERMITTED TO USE DEPOSIT "B," HE ASKED WHETHER HE COULD WITHDRAW THE TELEGRAPHIC AMENDMENT TO THE CORPORATION'S BID, INDICATING, HOWEVER, THAT HE WOULD PERFORM THE WORK AT THE LOWER PRICE. IT IS ALSO REPORTED THAT ON SEPTEMBER 24, 1957, THE PRESIDENT OF THE CORPORATION WAS ADVISED THAT HIS REQUEST TO WITHDRAW HIS TELEGRAPHIC REDUCTION IN BID PRICE COULD NOT BE GRANTED AND THAT HE REPLIED THAT HE WAS UNWILLING TO CLAIM A MISTAKE IN BID AT THAT TIME AND WOULD ACCEPT THE AWARD WHEN RECEIVED.

BY LETTER DATED SEPTEMBER 20, 1957, WHICH IT IS REPORTED WAS NOT MAILED UNTIL SEPTEMBER 24, THE FORD CONSTRUCTION COMPANY, INC., WAS NOTIFIED THAT THE CONTRACT IN THE AMOUNT OF $152,951 HAD BEEN AWARDED TO IT AND THAT IT SHOULD PROCEED WITH THE WORK DESCRIBED THEREIN. IT IS REPORTED THAT ON SEPTEMBER 26, 1957, THE CORPORATION INDICATED ACCEPTANCE OF THE AWARD.

BY TELEGRAM DATED SEPTEMBER 26, 1957, THE CORPORATION ADVISED THAT THE CORRECTED PRICES SHOWN IN THE ADMINISTRATIVE OFFICE'S TELEGRAM OF SEPTEMBER 19, 1957, WERE CORRECT, AND REQUESTED THAT IF IT WERE NOT PERMITTED TO USE AGGREGATE DEPOSIT "B" AS A SOURCE OF RAW MATERIALS, THE CONTRACT PRICE OF THE WORK BE INCREASED FROM $152,951 TO $169,252, WHICH, IT STATED, WAS THE AMOUNT OF ITS BID BEFORE THE TELEGRAPH AMENDMENT THEREOF.

IN A LETTER DATED OCTOBER 14, 1957, THE CORPORATION ALLEGED THAT IT HAD MADE A MISTAKE IN PREPARING ITS BID BY ASSUMING THAT IT COULD USE AGGREGATE DEPOSIT "B.' BY LETTER DATED OCTOBER 19, 1957, THE CORPORATION SUBMITTED CERTAIN WORKSHEETS AND AN AFFIDAVIT DATED OCTOBER 19, 1957, IN WHICH THE PRESIDENT OF THE CORPORATION STATED THAT AFTER MAILING IN THE CORPORATION'S ORIGINAL BID OF $169,252 TO THE CONTRACTING OFFICE, HE AND ANOTHER OFFICIAL OF THE CORPORATION MAILING IN THE CORPORATION'S ORIGINAL BID OF $169,252 TO THE CONTRACTING OFFICE, HE AND ANOTHER OFFICIAL OF THE CORPORATION EXAMINED THE MAP WHICH HAD BEEN ATTACHED TO THE INVITATION; THAT DURING THEIR DISCUSSION THEY DECIDED THAT IT WOULD BE CHEAPER TO PIPE THE WATER DOWN TO AGGREGATE DEPOSIT "B" FROM ANP WELL NO. 7 WITH FOUR INCH ALUMINUM IRRIGATION PIPE; THAT THEY BELIEVED ALSO FROM THEIR VISUAL INSPECTION OF THE SITE THAT AGGREGATE DEPOSIT "B" CONTAINED A LARGER PROPORTION OF USABLE SAND TO ROCK THAN AGGREGATE DEPOSIT "C," AND, THEREFORE, WOULD COST LESS TO PRODUCE IN THE PROPORTIONS REQUIRED BY INVITATION NO. AT/10-1/-915; THAT THEY, THEREFORE, MADE THE DECISION TO USE AGGREGATE DEPOSIT "B" RATHER THAN AGGREGATE DEPOSIT "C; " AND THAT BASED UPON THIS DECISION, THEY SENT A TELEGRAM REDUCING THEIR BID ON EACH ITEM OF ROCK AND EACH ITEM OF SAND, AND ESTABLISHING A NEW TOTAL AGGREGATE BID PRICE OF $152,951.

IN A MEMORANDUM DATED NOVEMBER 20, 1957, FROM THE ACTING MANAGER, IDAHO OPERATIONS OFFICE, TO THE CONTROLLER, DIVISION OF FINANCE, WASHINGTON, D.C., IT WAS STATED THAT THE CORPORATION'S SUPPORTING DOCUMENTS FAIL TO SHOW HOW COSTS WOULD BE REDUCED BY USING GRAVEL PIT "B" INSTEAD OF PIT "C" FOR THE MATERIALS NEEDED TO PRODUCE THE REQUIRED AGGREGATE, AND THAT THEY FAIL TO SHOW THE AMOUNT OF SAVINGS WHICH WOULD RESULT FROM THE SHORTENED HAUL FROM PIT "B," THE ADDED COST OF PIPING WATER FROM PIT "C," OR ANY OTHER FACTORS THAT WOULD YIELD THE NET SAVING REPRESENTED BY THE TELEGRAPHIC REDUCTION IN BID PRICE. IT IS ALSO STATED THAT THE REQUIREMENTS IN PARAGRAPH TP-04 OF THE SPECIFICATIONS ARE SPECIFIC IN DESIGNATING THE GRAVEL PIT WHICH MAY BE USED IN PRODUCING THE REQUIRED AGGREGATE.

AFTER ALLEGING ERROR IN ITS BID, THE FORD CONSTRUCTION COMPANY, INC., ENTERED INTO A FORMAL CONTRACT WHEREIN IT AGREED TO PERFORM THE WORK FOR THE PRICE SPECIFIED IN ITS BID. THE FORMAL CONTRACT SIGNED BY THE COMPANY IS PRESUMED, IN LAW, TO HAVE EXPRESSED THE FINAL UNDERSTANDING OF THE PARTIES. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168, 173, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID---

"* * * THE WRITTEN CONTRACT MERGED ALL PREVIOUS NEGOTIATIONS, AND IS PRESUMED, IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. THE CONTRACT DID NOT EXPRESS THE TRUE AGREEMENT, IT WAS THE CLAIMANT'S FOLLY TO HAVE SIGNED IT. * * *"

THE FACTS IN THE PRESENT CASE ARE SOMEWHAT SIMILAR TO THOSE IN THE CASE OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.CLS. 699, (CERTIORARI DENIED 325 U.S. 866) WHEREIN THE PLAINTIFF ALLEGED ERROR IN ITS BID BY REASON OF HAVING FAILED TO INCLUDE ON THE SHEET SUMMARIZING THE VARIOUS ESTIMATE SHEETS, THE CHARGE FOR USE OF CERTAIN EQUIPMENT AMOUNTING TO $88,000 APPEARING ON ONE OF THE ESTIMATE SHEETS. EVEN THOUGH THE MISTAKE WAS DISCOVERED AND BROUGHT TO THE ATTENTION OF THE GOVERNMENT BEFORE AWARD, AND THE CONTRACT EXECUTED UNDER PROTEST, THE COURT DENIED ANY RELIEF, SAYING (P. 717/---

"AT THE TIME THE CONTRACT WAS AWARDED TO THE PLAINTIFF, PURSUANT TO ITS BID, AND AT THE TIME IT SIGNED THE CONTRACT, THE PLAINTIFF WAS NOT MISTAKEN. IT HAD BECOME AWARE OF THE MISTAKE IN ITS BID, AND FACED THE PROBLEM OF WHETHER IT WAS WILLING TO SIGN A CONTRACT FOR THE FIGURE WHICH IT HAD, BY MISTAKE SINCE DISCOVERED, BID. THE GOVERNMENT WAS ALSO AWARE OF THE PLAINTIFF'S CLAIM THAT IT HAD MADE A MISTAKE IN ITS BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED EITHER OF THEM TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THAT BEING SO, IF WE SHOULD REFORM THE CONTRACT AS THE PLAINTIFF REQUESTS, WE WOULD BE MAKING FOR THE PARTIES THE VERY CONTRACT WHICH ONE OF THEM, THE GOVERNMENT, EXPRESSLY REFUSED TO MAKE AT THAT TIME, THOUGH REQUESTED TO DO SO BY THE PLAINTIFF.'

SEE ALSO BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. B. WILSON COMPANY, INC., 133 F.2D 399; 23 COMP. GEN. 596; 25 ID.536; AND 31 ID. 384.

ACCORDINGLY, ON THE PRESENT RECORD, THERE IS NO LEGAL BASIS FOR CHANGING THE PRICE SPECIFIED IN CONTRACT NO. AT/10-1/-915.