B-135290, MAR. 3, 1958

B-135290: Mar 3, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 14. IS BASED. BIDS WERE REQUESTED ON THE BASIS OF THOUSAND FOOT BOARD MEASURE. AS THE COMPANY'S BID WAS THE LOWEST RECEIVED MEETING SPECIFICATIONS. IT WAS NOTIFIED ON NOVEMBER 6. THAT ITS BID ON LOTS 1 AND 2 WAS ACCEPTED. THE BID PRICES WERE "CONSIDERABLY TOO LOW.'. THE CONTRACTING OFFICER RETURNED THE NOTICE OF AWARD TO THE COMPANY AND ADVISED THAT ITS AVERAGE BID OF $99.80 WAS APPROXIMATELY $15 IN EXCESS OF OTHER RECENT PRICES PAID BY THAT PURCHASING AGENCY ON A SURFACE MEASURE BASIS FOR 7/16 INCH AND 9/16 INCH MATERIAL DELIVERED TO THE SAME DESTINATION AND THAT THE BID WAS NOT OUT OF LINE WITH OTHER RECENT PRICES PAID FOR 5/4 INCH AND 6/4 INCH STOCK ON BOARD MEASURE BASIS.

B-135290, MAR. 3, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 14, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR MARTIN TIMBER COMPANY, INC., ALLEGES IT MADE IN THE BID ON WHICH CONTRACT NO. DA-09-026- ENG-58437, DATED NOVEMBER 6, 1957, IS BASED.

BY INVITATION NO. ENG-09-026-58-92, DATED OCTOBER 22, 1957, THE PROCUREMENT BRANCH, U.S. ARMY ENGINEER DIVISION, ATLANTA, GEORGIA, REQUESTED BIDS FOR FURNISHING CERTAIN LUMBER CONSISTING OF 50,000 FBM UNDER EACH OF LOTS 1 AND 2. LOT NO. 1 COVERS 5/4 INCH (THICK) STOCK, RESAWN TO 7/16 INCH AND LOT 2 COVERS 6/4 INCH (THICK) STOCK RESAWN TO 9/16 INCH. THE INVITATION SPECIFIED THAT AWARD ON EACH LOT WOULD BE MADE AS A WHOLE TO THE LOWEST BIDDER IN THE AGGREGATE FOR ALL ITEMS CONTAINED IN THE LOT. BIDS WERE REQUESTED ON THE BASIS OF THOUSAND FOOT BOARD MEASURE. MARTIN TIMBER COMPANY, INC., BID ON LOTS 1 AND 2 IN THE AGGREGATE AMOUNT OF $4,540 EACH LOT, OR AN AVERAGE OF $90.80 PER MBM. AS THE COMPANY'S BID WAS THE LOWEST RECEIVED MEETING SPECIFICATIONS, IT WAS NOTIFIED ON NOVEMBER 6, 1957, THAT ITS BID ON LOTS 1 AND 2 WAS ACCEPTED. THE COMPANY RETURNED THE NOTICE OF AWARD BY UNSIGNED LETTER DATED NOVEMBER 8, 1957, STATING THAT SINCE THE BID HAD BEEN COMPUTED ON THE BASIS OF SURFACE MEASURE, RATHER THAN BOARD MEASURE AS SPECIFIED, THE BID PRICES WERE "CONSIDERABLY TOO LOW.' BY LETTER DATED NOVEMBER 12, 1957, THE CONTRACTING OFFICER RETURNED THE NOTICE OF AWARD TO THE COMPANY AND ADVISED THAT ITS AVERAGE BID OF $99.80 WAS APPROXIMATELY $15 IN EXCESS OF OTHER RECENT PRICES PAID BY THAT PURCHASING AGENCY ON A SURFACE MEASURE BASIS FOR 7/16 INCH AND 9/16 INCH MATERIAL DELIVERED TO THE SAME DESTINATION AND THAT THE BID WAS NOT OUT OF LINE WITH OTHER RECENT PRICES PAID FOR 5/4 INCH AND 6/4 INCH STOCK ON BOARD MEASURE BASIS. ON NOVEMBER 12, 1957, THREE COPIES OF THE CONTRACT WERE MAILED TO THE COMPANY WITH THE REQUEST THAT THEY BE SIGNED. BY LETTER OF NOVEMBER 20, 1957, THE COMPANY AGAIN RETURNED THE NOTICE OF AWARD, TOGETHER WITH ONE COPY OF THE DEFINITIVE CONTRACT WHICH HAD NOT BEEN SIGNED AS REQUESTED, STATING THAT THE PRICES WERE BASED ON SURFACE MEASURE AND THAT IT FELT IT SHOULD NOT BE HELD TO THE QUOTATION. THE CONTRACTING OFFICER, BY LETTER OF NOVEMBER 26, 1957, RETURNED THE CONTRACT AND NOTICE OF AWARD TO THE COMPANY, AGAIN ADVISING THAT A CONTRACT EXISTED BETWEEN THE COMPANY AND THE GOVERNMENT AND THAT IN THE EVENT OF FAILURE TO PERFORM, IT WOULD BE NECESSARY TO TERMINATE ITS RIGHT TO PROCEED AND TO REPURCHASE THE MATERIAL FROM OTHER SOURCES FOR ITS ACCOUNT. ALSO, THE COMPANY WAS REQUESTED TO FURNISH EVIDENCE IN SUPPORT OF THE ALLEGED ERROR IN BID. THE COMPANY REPLIED BY LETTER OF DECEMBER 2, 1957, ENCLOSING A COPY OF THE WORKSHEET USED IN PREPARING THE BID AND A LUMBER PRICE SHEET PRINTED ON ITS LETTERHEAD. THE COMPANY REQUESTED THAT IT BE ALLOWED TO WITHDRAW THE BID OR TO RAISE THE AMOUNT THEREOF AN AVERAGE OF $27.45 PER MBM ON THE CONTRACT QUANTITY, OR AN AGGREGATE INCREASE OF $2,745. AS NO DELIVERIES WERE MADE UNDER THE CONTRACT, BY NOTICE OF DECEMBER 16, 1957, THE CONTRACTOR'S RIGHT TO PROCEED WITH PERFORMANCE WAS TERMINATED PURSUANT TO THE "DEFAULTS" ARTICLE OF THE CONTRACT.

THE CONTRACTING OFFICER STATED IN HIS FINDINGS DATED DECEMBER 23, 1957, THAT FROM THE WORKSHEET AND PRICE LIST SUBMITTED BY THE CONTRACTOR HE WAS UNABLE TO DETERMINE HOW THE COMPANY ARRIVED AT THE HIGHER AMOUNTS CLAIMED. ALSO, HE STATED THAT THERE HAS BEEN A DOWNWARD TREND IN THE PRICES OF LUMBER PURCHASED BY HIS AGENCY SINCE JANUARY 1957, AND FURNISHED REPORTS WHICH REFLECTED AVERAGE PRICES PAID BY THE PURCHASING AGENCY OF $97.50 PER MBM IN JANUARY 1957, $92.25 IN JUNE 1957, $88 IN SEPTEMBER 1957. FURTHER, THE CONTRACTING OFFICER STATED THAT THE CONTRACTOR'S BID ON WHICH THE CONTRACT WAS AWARDED, EXCEEDED THE SEPTEMBER AVERAGE PRICE BY $2.80.

THE ABSTRACT OF BIDS SHOWS THAT A TOTAL OF 11 BIDS WERE RECEIVED ON LOT 1. THE CONTRACTOR'S BID ON THAT LOT WAS AN AGGREGATE OF $4,540, OR AN AVERAGE OF $90.80 PER MBM AND THE NEXT LOW BID WAS $4,696, AN AVERAGE PRICE OF $93.93. ON LOT 2, 10 BIDS WERE RECEIVED, THE NEXT LOW BID WAS $4,540 OR $90.80 PER MBM AVERAGE.

THUS, IT APPEARS THAT THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE OTHER BIDS WAS NOT SO GREAT AS TO JUSTIFY THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABILITY OF ERROR. IT FOLLOWS THAT THE ACCEPTANCE OF THE BID OF MARTIN TIMBER COMPANY, INC., WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD OF THE CONTRACT--- AND THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION TO BID IS UPON THE BIDDER. SEE FRAZIER DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF AN ERROR WAS MADE IN THE PREPARATION OF THE BID, AS ALLEGED, IT PROPERLY MAY BE ATTRIBUTED SOLELY TO THE CONTRACTOR'S NEGLIGENCE AND SINCE THE ERROR UPON WHICH THE REQUEST FOR RELIEF IS BASED WAS UNILATERAL, NOT MUTUAL, THE CONTRACTOR IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATIONS UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE PAPERS, WITH THE EXCEPTION OF THE ADMINISTRATIVE REPORT DATED DECEMBER 23, 1957, ARE RETURNED.