B-135288, MAR. 6, 1958

B-135288: Mar 6, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 14. QUOTATIONS WERE RECEIVED FROM SEVEN FIRMS. THE BELL TRANSFER AND STORAGE COMPANY WAS REQUESTED TO VERIFY ITS BID. THE BID AS SUBMITTED WAS VERIFIED BY THE CONTRACTOR. WHEREUPON AWARD WAS MADE ON SEPTEMBER 30. THE CONTRACTOR ORALLY ADVISED THE CONTRACTING OFFICER THAT ITS FIRM WAS LOSING MONEY ON THE CONTRACT BY REASON OF THE PERFORMANCE OF CERTAIN SERVICES NOT REQUIRED BY THE TERMS OF THE AGREEMENT. THE BASIC QUESTION INVOLVED IN CASES SUCH AS THIS IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. 36 COMP. AN EXAMINATION OF THE ABSTRACT OF BIDS RECEIVED DOES NOT INDICATE THAT THE PRICE DIFFERENCES WERE SO GREAT THAT THE LOW BID PRICE NECESSARILY MUST HAVE BEEN ERRONEOUS.

B-135288, MAR. 6, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 14, 1958, FROM THE ASSISTANT SECRETARY (LOGISTICS), FORWARDING AN ALLEGATION OF ERROR IN THE BID SUBMITTED BY BELL TRANSFER AND STORAGE COMPANY, LAWTON, OKLAHOMA, AFTER AWARD OF CONTRACT NO. DA-34-031-AIV-1376, DATED SEPTEMBER 30, 1957.

THE FILE SUBMITTED WITH THE ASSISTANT SECRETARY'S LETTER INDICATES THAT, IN RESPONSE TO THE SOLICITATION OF BIDS FOR THE DRAYAGE OF HOUSEHOLD EFFECTS WITHIN AND BEYOND A FIFTEEN MILE RADIUS OF FORT SILL, OKLAHOMA (ITEMS 1 AND 2), QUOTATIONS WERE RECEIVED FROM SEVEN FIRMS. BELL TRANSFER AND STORAGE COMPANY OFFERED TO PERFORM THE SERVICES COVERED BY ITEMS 1 AND 2 FOR $1,00 CWT AND $1.25 CWT, RESPECTIVELY. THE SIX OTHER RESPONSIVE BIDS RANGED FROM $1.20 AND $1.48 PER HUNDRED WEIGHT FOR THE TWO ITEMS TO $3.60 AND $3.80.

IN HIS REPORT OF DECEMBER 30, 1957, THE CONTRACTING OFFICER STATES THAT, BECAUSE OF THE WIDE DIVERGENCE AMONG THE BIDS RECEIVED, THE BELL TRANSFER AND STORAGE COMPANY WAS REQUESTED TO VERIFY ITS BID. THE BID AS SUBMITTED WAS VERIFIED BY THE CONTRACTOR, WHEREUPON AWARD WAS MADE ON SEPTEMBER 30, 1957. ON OR ABOUT NOVEMBER 8, 1957, THE CONTRACTOR ORALLY ADVISED THE CONTRACTING OFFICER THAT ITS FIRM WAS LOSING MONEY ON THE CONTRACT BY REASON OF THE PERFORMANCE OF CERTAIN SERVICES NOT REQUIRED BY THE TERMS OF THE AGREEMENT. BY LETTER OF DECEMBER 11, 1957, THE CONTRACTOR, IN EFFECT, ALLEGED AN ERROR IN ITS BID AND FURNISHED AN ANALYSIS OF INCOME AND EXPENSE REGARDING THE WORK ORDERS HANDLED WITH THE REQUEST THAT A RETROACTIVE ADJUSTMENT IN THE PRICES QUOTED BE MADE SO AS TO AUTHORIZE PAYMENT ON THE BASIS OF $1.65 PER CWT.

THE BASIC QUESTION INVOLVED IN CASES SUCH AS THIS IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. 36 COMP. GEN. 27. OBVIOUSLY, AN EXAMINATION OF THE ABSTRACT OF BIDS RECEIVED DOES NOT INDICATE THAT THE PRICE DIFFERENCES WERE SO GREAT THAT THE LOW BID PRICE NECESSARILY MUST HAVE BEEN ERRONEOUS. ON THE OTHER HAND, THE CONTRACTING OFFICER, BY REASON OF THE COMPARATIVE PRICES, DEEMED IT HIS DUTY PRIOR TO AWARD TO VERIFY WHETHER THE BIDDER INTENDED TO SUBMIT A BID OF $1.00 AND $1.25 FOR THE TWO ITEMS INVOLVED AND INTENDED TO BE BOUND BY THE CONTRACTING OFFICER'S ACCEPTANCE THEREOF. SUCH DUTY WAS COMPLETELY DISCHARGED WHEN, UPON BEING REQUESTED TO VERIFY ITS BID, BELL TRANSFER AND STORAGE COMPANY VERIFIED THE PRICES QUOTED AS CORRECT AND INDICATED THAT THEY SHOULD STAND. THE RULE IS WELL SETTLED THAT WHERE A BIDDER IS AFFORDED A PROPER OPPORTUNITY TO VERIFY ITS 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. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. IN FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163, THE COURT SAID THAT IT IS THE RESPONSIBILITY OF THE BIDDER ALONE TO ESTIMATE THE PRICE AT WHICH HE WILL PERFORM, AND THE GOVERNMENT IS NOT LIABLE FOR ANY LOSS WHICH RESULTS FROM AN IMPROVIDENT BID.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS ON WHICH PAYMENT IN EXCESS OF THE CONTRACT PRICE MAY BE MADE TO THE CONTRACTOR. THE FACT THAT THE CONTRACTOR, APPARENTLY OF ITS OWN VOLITION, PERFORMED CERTAIN SERVICES NOT REQUIRED BY THE TERMS OF THE CONTRACT HAS NO BEARING ON THE MATTER.

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