B-135643, JUN. 16, 1958

B-135643: Jun 16, 1958

Additional Materials:

Contact:

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

 

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

INC.: FURTHER REFERENCE IS MADE TO YOUR VARIOUS PROTESTS AGAINST THE ACTION OF THE U.S. WAS ACCEPTED BY THE GOVERNMENT ON DECEMBER 19. THE NEXT LOWEST BID UNDER THE INVITATION WAS FOR $6. IN THIS LETTER YOU ALLEGE THAT THE PURCHASING OFFICE SHOULD HAVE REQUESTED CONFIRMATION OF YOUR BID IN VIEW OF THE WIDE VARIATION BETWEEN THE AMOUNT OF YOUR BID AND THE AMOUNTS OF THE OTHER BIDS RECEIVED. SINCE THE CONTENTS OF THIS LETTER WERE NOT CONSIDERED ADEQUATE TO CURE YOUR FAILURE WHICH ENDANGERED THE PERFORMANCE OF YOUR CONTRACT. N155-35046 WAS TERMINATED ON FEBRUARY 14. THE RECORD SHOWS THAT THE NORMAL LEAD TIME FOR THIS TYPE OF ARTICLE IS FROM 60 TO 90 DAYS. IT WAS NOT CONSIDERED REASONABLE TO EXPECT PERFORMANCE WITHIN THE REMAINING 35 DAYS WHICH.

B-135643, JUN. 16, 1958

TO MANHATTAN LIGHTING EQUIPMENT CO.,INC.:

FURTHER REFERENCE IS MADE TO YOUR VARIOUS PROTESTS AGAINST THE ACTION OF THE U.S. NAVY GENERAL STORES SUPPLY OFFICE, PHILADELPHIA, PENNSYLVANIA, IN HAVING AWARDED YOU CONTRACT NO. N155-35046, DATED DECEMBER 19, 1957, RESULTING FROM IFB-155/3/-1045-58, WITHOUT FIRST HAVING REQUESTED CONFIRMATION OF YOUR LOW BID PRICE; (2) THE TERMINATION OF THE CONTRACT BEFORE THE PERFORMANCE TIME HAD EXPIRED; AND (3) THE REPURCHASE OF THE DEFAULTED ITEM FROM ANOTHER SOURCE AGAINST YOUR ACCOUNT.

BY INVITATION NO. IFB-155/3/-1045-58, DATED OCTOBER 30, 1957, THE GENERAL STORES SUPPLY OFFICE AT PHILADELPHIA SOLICITED BIDS ON THE TOTAL QUANTITY OF 6,480 CHROME-PLATED BRASS SOAP HOLDERS, AS SPECIFIED, FOR DELIVERY WITHIN 90 DAYS AFTER AWARD TO THE SEVERAL DESTINATION POINTS INDICATED. ELEVEN BIDDERS RESPONDED TO THE INVITATION. YOUR BID FOR $4,745.24, BEING THE LOWEST, WAS ACCEPTED BY THE GOVERNMENT ON DECEMBER 19, 1957, THE AWARD HAVING RESULTED IN CONTRACT NO. N155-35046 OF THAT DATE.

THE NEXT LOWEST BID UNDER THE INVITATION WAS FOR $6,674.40, AN AMOUNT $1,929.16 IN EXCESS OF YOUR LOW BID. EXCEPT FOR ONE EXTREMELY HIGH BID FOR $14,342.40, THE AMOUNTS OF THE OTHER BIDS RANGED ANYWHERE FROM $7,387.20 TO $9,806.40 ON THIS ITEM.

BY LETTER DATED JANUARY 14, 1958, YOU REQUESTED THE PURCHASING AGENCY TO CANCEL THE CONTRACT ON THE GROUNDS OF "OBVIOUS ERROR.' IN THIS LETTER YOU ALLEGE THAT THE PURCHASING OFFICE SHOULD HAVE REQUESTED CONFIRMATION OF YOUR BID IN VIEW OF THE WIDE VARIATION BETWEEN THE AMOUNT OF YOUR BID AND THE AMOUNTS OF THE OTHER BIDS RECEIVED. THE ALLEGED MISTAKE APPARENTLY RESULTED FROM YOUR SUPPLIER'S MISAPPREHENSION AS TO THE ACTUAL REQUIREMENTS OF THE SPECIFICATIONS, ITS BASIC QUOTATION APPARENTLY HAVING BEEN BASED UPON A REQUIREMENT FOR HOLDERS OF A ZINC DIE CASTING, IN LIEU OF CHROME PLATED BRASS, AS SPECIFIED. IN A DECISION DATED JANUARY 23, 1958, RENDERED PURSUANT TO TITLE II OF THE FIRST WAR POWERS ACT, 50 U.S.C. 611, AUTHORIZING THE MODIFICATION OF A CONTRACT BASED UPON A SHOWING OF MUTUAL MISTAKE, THE GOVERNMENT CONTRACTING OFFICER DENIED YOUR REQUEST FOR CANCELLATION OF CONTRACT NO. N155-35046 ON THE GROUND THAT YOU HAD FAILED TO ESTABLISH THE EXISTENCE OF A MUTUAL ERROR IN YOUR BID.

UPON YOUR CONTINUED FAILURE TO TENDER TO THE GOVERNMENT AN ARTICLE WHICH WOULD MEET THE SPECIFICATION REQUIREMENTS, THE CONTRACTING OFFICER, IN A LETTER DATED FEBRUARY 3, 1958, ALLOWED YOU 10 DAYS IN WHICH TO NOTIFY HIM OF A FIRM SOURCE OF SUPPLY, AND ADVISE WHETHER THE CONTRACT DELIVERY DATE OF MARCH 19, 1958, ALLOWED YOU 10 DAYS IN WHICH TO NOTIFY HIM OF A FIRM SOURCE OF SUPPLY, AND ADVISE WHETHER THE CONTRACT DELIVERY DATE OF MARCH 19, 1958, WOULD BE MET. TO THIS COMMUNICATION YOU REPLIED BY LETTER DATED FEBRUARY 10, 1958, THAT "FOR THE PRESENT" YOU INTENDED TO GO THROUGH WITH THE CONTRACT, BUT THAT YOU COULD NOT NAME A NEW SUPPLIER OF A SPECIFICATION PRODUCT FOR A WEEK OR TWO, AT WHICH TIME YOU WOULD ALSO GIVE A DELIVERY PROMISE. SINCE THE CONTENTS OF THIS LETTER WERE NOT CONSIDERED ADEQUATE TO CURE YOUR FAILURE WHICH ENDANGERED THE PERFORMANCE OF YOUR CONTRACT, WITHIN THE CONTEMPLATION OF ARTICLE 11 (A) (II) OF THE CONTRACT GENERAL PROVISIONS, CONTRACT NO. N155-35046 WAS TERMINATED ON FEBRUARY 14, 1958, FOR FAILURE TO MAKE SATISFACTORY PROGRESS. IN THIS CONNECTION, THE RECORD SHOWS THAT THE NORMAL LEAD TIME FOR THIS TYPE OF ARTICLE IS FROM 60 TO 90 DAYS, AND IN THE CIRCUMSTANCES THEN PREVAILING, IT WAS NOT CONSIDERED REASONABLE TO EXPECT PERFORMANCE WITHIN THE REMAINING 35 DAYS WHICH, OF COURSE, INCLUDED SHIPMENT OF THE ITEMS TO THE SEVERAL DESTINATION POINTS SPECIFIED.

UPON THE TERMINATION OF YOUR CONTRACT, ADMINISTRATIVE ACTION WAS PROMPTLY TAKEN TO REPURCHASE THE DEFAULTED ITEMS AGAINST YOUR ACCOUNT, AND ACCORDINGLY, INVITATION NO. IFB-155-/3/-2053-58 WAS ISSUED, DESCRIBING THE REQUIRED ITEM. TEN PROPOSALS WERE RECEIVED IN RESPONSE THERETO, THE LOWEST OF WHICH, FOR $6,285.60, WAS SUBMITTED BY THE BREY KRAUSE MANUFACTURING COMPANY, ALLENTOWN, PENNSYLVANIA. THIS PROPOSAL WAS ACCEPTED BY THE GOVERNMENT ON APRIL 21, 1958, RESULTING IN CONTRACT NO. N155-37047. CONSIDERING THE CASH DISCOUNTS OF 1 AND 2 PERCENT OFFERED, RESPECTIVELY, IN THE DEFAULTED AND COMPLETING CONTRACTS, THE EXCESS COSTS OCCASIONED THE UNITED STATES BY REASON OF YOUR DEFAULT AMOUNT TO $1,460.12, FOR WHICH YOU CLEARLY ARE LIABLE UNDER THE DEFAULT CLAUSE OF YOUR CONTRACT.

CONCERNING YOUR CONTENTION THAT YOUR ORIGINAL PROPOSAL SHOULD NOT HAVE BEEN ACCEPTED WITHOUT A CONFIRMATION OF YOUR LOW BID PRICE, WHEN THERE IS CONSIDERED THE WIDE RANGE OF THE BIDS RECEIVED ON THIS ITEM, IT IS FELT THAT A PRICE DIFFERENTIAL OF ONLY $1,929.16 BETWEEN THE AMOUNT OF YOURS AND THE NEXT LOWEST BIDDER WAS NOT SUFFICIENT, OF ITSELF, TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF A PROBABLE ERROR. NOT ONLY HAVE YOU FAILED TO ESTABLISH THE EXISTENCE OF A MUTUAL ERROR IN YOUR DEFAULTED CONTRACT, BUT ACCORDING TO THE RECORDS, YOUR ONLY MISTAKE--- WHICH WAS ENTIRELY UNILATERAL IN CHARACTER--- CONSISTED OF YOUR QUOTING ON A NON- SPECIFICATION ITEM. IT IS THE DUTY OF EVERY BIDDER TO FAMILIARIZE HIMSELF WITH THE EXACT REQUIREMENTS OF THE ADVERTISED SPECIFICATIONS, AND IF HE FAILS TO DO SO, AS YOU APPARENTLY HAVE DONE HERE, HE IS IN NO POSITION TO SEEK RELIEF ON THE GROUND OF MUTUAL ERROR. ON THIS POINT THE LAW IS WELL SETTLED THAT THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO A PUBLIC INVITATION IS ENTIRELY UPON THE BIDDER. SEE FRAZIER- DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. ALSO IS ESTABLISHED THAT WHEN A BIDDER HAS MADE A MISTAKE IN THE PREPARATION OF HIS BID, AND HIS BID HAS BEEN ACCEPTED IN GOOD FAITH, HE MUST BEAR ITS CONSEQUENCES, UNLESS, OF COURSE, THE MISTAKE WAS MUTUAL OR SO APPARENT AS TO RAISE A PRESUMPTION THAT THE CONTRACTING OFFICER KNEW OF ITS EXISTENCE, AND SOUGHT TO TAKE ADVANTAGE OF IT. SEE ELLICOTT MACHINE COMPANY V. UNITED STATES, 44 C.CLS. 127; 23 COMP. GEN. 596, 598. OBVIOUSLY NO SUCH PRESUMPTION CAN ARISE HERE, THE RECORD IN THE CASE CLEARLY INDICATING THAT YOUR LOW BID WAS ACCEPTED BY THE GOVERNMENT IN ENTIRE GOOD FAITH, AND WITHOUT NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF ANY ERROR THEREIN. CONSEQUENTLY, ANY ERROR THAT MIGHT HAVE BEEN MADE WAS ENTIRELY UNILATERAL, WHICH, OF COURSE, PRECLUDES THE RESCISSION OR MODIFICATION OF YOUR CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; 29 COMP. GEN. 323, 324.

WITH RESPECT TO THE DEFAULT TERMINATION, WE HAVE BEEN ADVISED THAT YOU HAVE APPEALED TO THE SECRETARY OF THE NAVY UNDER THE DISPUTES ARTICLE OF THE CONTRACT AND THAT NO DECISION HAS YET BEEN RENDERED. IN THE ABSENCE OF A FINAL ADMINISTRATIVE DETERMINATION OF THE FACTUAL MATTERS INVOLVED, THE ACTIONS OF THE CONTRACTING OFFICER UNDER THE CONTRACT MAY NOT BE REGARDED AS ..END :