B-136042, MAY 13, 1958

B-136042: May 13, 1958

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NINE BIDS WERE RECEIVED RANGING FROM THE APPARENT LOW BID OF DEMING ROOFING AND SHEET METAL COMPANY. THE SECOND LOW BID WAS $10. 353 AND THE GOVERNMENT'S FAIR COST ESTIMATE FOR THE WORK WAS $15. THE CORRECT ADDITION OF THE AMOUNTS BID ON THE THREE ITEMS SHOULD HAVE BEEN $7. AFTER THE BIDS WERE OPENED THE COMPANY ADVISED THAT IT HAD MADE AN ERROR IN BREAKING DOWN THE BID ITEMS TO THE THREE COMPONENTS REQUIRED. 000 IN FAVOR OF THE GOVERNMENT WAS DISCOVERED. AN EXAMINATION OF THE WORK PAPERS SUBMITTED INDICATES THAT THERE WAS AN ERROR IN ADDITION AS INDICATED BY THE COMPANY. 294 (PLUS ADDITIVES) WHICH WAS SPECIFICALLY EXCLUDED BY THE INVITATION. SINCE THERE WAS NOTHING IN THE ORIGINAL BID WHICH WOULD HAVE WARNED THE GOVERNMENT OF THE ERRORS LATER DISCOVERED IN EXAMINATION OF THE COMPANY'S WORK PAPERS.

B-136042, MAY 13, 1958

TO MR. D. J. O-NEIL, DIRECTOR, CONSTRUCTION ENGINEERING AND SUPPLY DIVISION, UNITED STATES ATOMIC ENERGY COMMISSION:

YOUR LETTER OF MAY 2, 1958, REQUESTS OUR DECISION AS TO WHETHER, UNDER THE CIRCUMSTANCES RECITED THEREIN, THE LOW BID SUBMITTED BY DEMING ROOFING AND SHEET METAL COMPANY, INC., IN RESPONSE TO INVITATION NO. AT/45-1/- 1266, DATED MARCH 19, 1958, MAY BE WITHDRAWN BY THE COMPANY ON THE BASIS OF ERROR ALLEGED AFTER OPENING OF BIDS.

BY INVITATION NO. AT/45-1/-1266 THE HANFORD OPERATIONS OFFICE, ENGINEERING AND SUPPLY DIVISION, RICHLAND, WASHINGTON, REQUESTED BIDS-- TO BE OPENED APRIL 2, 1958--- FOR REROOFING OF MISCELLANEOUS BUILDINGS AND RELATED WORK AT HANFORD WORKS, RICHLAND, WASHINGTON. NINE BIDS WERE RECEIVED RANGING FROM THE APPARENT LOW BID OF DEMING ROOFING AND SHEET METAL COMPANY, INC., IN THE AMOUNT OF $7,090 TO A HIGH BID OF $14,196. THE SECOND LOW BID WAS $10,353 AND THE GOVERNMENT'S FAIR COST ESTIMATE FOR THE WORK WAS $15,650.

THE COMPANY BID $3,290, $1,400 AND $2,400 ON EACH OF THE THREE ITEMS AND A TOTAL LUMP SUM AMOUNT OF $7,590. THE CORRECT ADDITION OF THE AMOUNTS BID ON THE THREE ITEMS SHOULD HAVE BEEN $7,090 INSTEAD OF $7,590 AS SHOWN ON THE COMPANY'S BID. AFTER THE BIDS WERE OPENED THE COMPANY ADVISED THAT IT HAD MADE AN ERROR IN BREAKING DOWN THE BID ITEMS TO THE THREE COMPONENTS REQUIRED, AFTER IT HAD FIGURED A TOTAL BID OF $7,590. PURSUANT TO A REQUEST FOR EVIDENCE TO SUPPORT ITS CONTENTION, THE COMPANY SUBMITTED ITS WORK PAPERS AND ADVISED THAT UPON RECHECKING ITS CALCULATION ANOTHER MISTAKE IN ADDITION OF $1,000 IN FAVOR OF THE GOVERNMENT WAS DISCOVERED. THE COMPANY REQUESTED RELIEF FROM ITS BID.

AN EXAMINATION OF THE WORK PAPERS SUBMITTED INDICATES THAT THERE WAS AN ERROR IN ADDITION AS INDICATED BY THE COMPANY. FURTHER EXAMINATION OF THE WORK PAPERS REVEALED THE COMPANY HAD ALSO INCLUDED ROOFING WORK FOR AN ADDITIONAL BUILDING (THE DESERT INN) IN THE AMOUNT OF $1,294 (PLUS ADDITIVES) WHICH WAS SPECIFICALLY EXCLUDED BY THE INVITATION. YOU RECOMMEND THAT THE BID BE AWARDED ON THE BASIS OF THE INITIAL BID OF $7,090, WHICH REPRESENTS THE CORRECT TOTAL OF ITEMS 1, 2, AND 3, SINCE THERE WAS NOTHING IN THE ORIGINAL BID WHICH WOULD HAVE WARNED THE GOVERNMENT OF THE ERRORS LATER DISCOVERED IN EXAMINATION OF THE COMPANY'S WORK PAPERS.

WHILE IT IS TRUE THAT THE RESPONSIBILITY FOR THE PREPARATION OF A BID IS UPON THE BIDDER, WHO ORDINARILY MUST BEAR THE CONSEQUENCES OF AN ERROR IN THE BID UPON WHICH A CONTRACT IS BASED, THAT RULE DOES NOT ENTITLE THE GOVERNMENT TO TAKE ADVANTAGE OF A BIDDER'S ERROR WHEN, AS IN THE PRESENT CASE, IT HAS BEEN ALLEGED AND SATISFACTORILY ESTABLISHED PRIOR TO AWARD. THE GENERAL RULE IS THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT. SEE NASON COAL COMPANY V. UNITED STATES, 64 C.CLS. 526; RESTATEMENT OF THE LAW OF CONTRACTS, SECTION 503; AND WILLISTON ON CONTRACTS, SECTION 1578. ALSO, SEE MOFFETT, HODGKINS AND CLARKE COMPANY V. ROCHESTER, 178 U.S. 373; KEMP V. UNITED STATES, 38 F.SUPP. 568; ALTA ELECTRIC AND MECHANICAL COMPANY, INC., V. UNITED STATES, 90 C.CLS. 466; AND 17 COMP. GEN. 575, 576. IN UNDERTAKING TO BIND A BIDDER BY ACCEPTANCE OF A BID AFTER NOTICE OF A CLAIM OF ERROR BY THE BIDDER, THE GOVERNMENT VIRTUALLY UNDERTAKES THE BURDEN OF PROVING EITHER THAT THERE WAS NO ERROR OR THAT THE BIDDER'S CLAIM WAS NOT MADE IN GOOD FAITH. THE DEGREE OF PROOF REQUIRED TO JUSTIFY WITHDRAWAL OF A BID BEFORE AWARD IS IN NO WAY COMPARABLE TO THAT NECESSARY TO ALLOW CORRECTION OF AN ERRONEOUS BID.

SINCE THE ERROR HAS BEEN ALLEGED AND EXPLAINED PRIOR TO AWARD, THE BID OF DEMING ROOFING AND SHEET METAL COMPANY, INC., SHOULD BE DISREGARDED IN MAKING AWARD.