B-136171, JUN. 3, 1958

B-136171: Jun 3, 1958

Additional Materials:

Contact:

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

 

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

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED MAY 14. WAS AWARDED. 4I BIDS WERE INVITED ON THE BASIS OF DELIVERY FOB ORIGIN AND WITH EXPORT PACKING. AWARD OF THESE THREE ITEMS WAS MADE TO THE SUBJECT COMPANY. ATTACHED TO THE LETTER WERE THE WORKSHEETS OF THE COMPANY SHOWING THE FIGURES UPON WHICH IT HAD BASED ITS ORIGINAL ESTIMATE OF COST. THE COMPANY IS REQUESTING A TOTAL INCREASE OF $1. WHICH INDICATES A MISTAKE WAS MADE IN THAT THE EXPORT PACKING REQUIREMENT WAS OVERLOOKED IN ESTIMATING THE COST OF PRODUCTION BUT THAT A COMPARISON BETWEEN THE COMPANY'S BID AND OTHER BIDS RECEIVED. REVEALS A SPREAD THAT WAS NOT GREAT ENOUGH TO PUT THE CONTRACTING OFFICER ON NOTICE BEFORE AWARD.

B-136171, JUN. 3, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MAY 14, 1958, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR THE CORRUGATED CONTAINER COMPANY, COLUMBUS, OHIO, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA 33-031 -QM-20610, O.I. 4480-58 Q, DATED FEBRUARY 26, 1958, WAS AWARDED.

THE QUARTERMASTER PURCHASING AGENCY, COLUMBUS GENERAL DEPOT, COLUMBUS, OHIO, BY INVITATION NO. QM 33-031-58-373 DATED JANUARY 2, 1958, REQUESTED BIDS FOR FURNISHING A LARGE QUANTITY OF FIBER CORRUGATED BOXES. RESPONSE THERETO THE CORRUGATED CONTAINER COMPANY SUBMITTED A BID WHEREIN THEY OFFERED TO FURNISH THE REQUIRED NUMBER OF BOXES FOR THE PRICES SPECIFIED THEREIN. FOR ITEMS LI, 3H, AND 4I BIDS WERE INVITED ON THE BASIS OF DELIVERY FOB ORIGIN AND WITH EXPORT PACKING. ON FEBRUARY 26, 1958, AWARD OF THESE THREE ITEMS WAS MADE TO THE SUBJECT COMPANY.

THE RECORD SHOWS THAT BY LETTER DATED MARCH 14, 1958, THE COMPANY ADVISED THAT IT HAD MADE AN ERROR ON ITS COST ESTIMATES IN THAT IT DID NOT INCLUDE IN ITS PRICE THE COST OF STEEL STRAPPING THE BUNDLES AS REQUIRED BY EXPORT PACKING REQUIREMENTS. ATTACHED TO THE LETTER WERE THE WORKSHEETS OF THE COMPANY SHOWING THE FIGURES UPON WHICH IT HAD BASED ITS ORIGINAL ESTIMATE OF COST. THIS LETTER SETS FORTH THE PRICE AS SHOWN ON THE ORIGINAL BID WHICH DOES NOT INCLUDE EXPORT PACK REQUIREMENTS. THE COMPANY IS REQUESTING A TOTAL INCREASE OF $1,267.31 WITH INDIVIDUAL ITEM INCREASES AS FOLLOWS:

TABLE

ORIGINAL BID REVISED BID ITEM NO EXPORT PACK REQUIREMENTS INCLUDING EXPORT PACK

REQUIREMENTS 1 I $0.240 $3,966 $0.27034 $4,467.37 3 H $0.257 $4,911.27 $0.28854 $5,514 4 I $0.0699

$1,286.16 $0.0787 $1,449.37

THE COST AND PRICE ANALYSIS BRANCH, QUARTERMASTER PURCHASING AGENCY AT COLUMBUS GENERAL DEPOT, COLUMBUS, OHIO, HAS PREPARED A REPORT ON THE ALLEGED MISTAKE, WHICH INDICATES A MISTAKE WAS MADE IN THAT THE EXPORT PACKING REQUIREMENT WAS OVERLOOKED IN ESTIMATING THE COST OF PRODUCTION BUT THAT A COMPARISON BETWEEN THE COMPANY'S BID AND OTHER BIDS RECEIVED, ALONG WITH PRIOR COST EXPERIENCE, REVEALS A SPREAD THAT WAS NOT GREAT ENOUGH TO PUT THE CONTRACTING OFFICER ON NOTICE BEFORE AWARD, OF A POSSIBLE MISTAKE IN BID. ALSO, THE CONTRACTING OFFICER IS OF THE OPINION THAT THE INFORMATION FURNISHED BY THE COMPANY SHOWS THAT THE EXPORT PACKING REQUIREMENTS WERE OMITTED FROM THE BID PRICE BUT CONCLUDES THAT THE MISTAKE WAS UNILATERAL IN NATURE FOR THE REASON THAT A COMPARISON OF THE COMPANY'S BID WITH THAT OF THE OTHER BIDDERS AND WITH PAST PROCUREMENT PRICES DOES NOT REVEAL A SPREAD SUFFICIENT TO HAVE INDICATED THE POSSIBILITY OF ERROR. HE RECOMMENDS, THEREFORE, THAT THE COMPANY'S REQUEST FOR AN INCREASE IN THE CONTRACT PRICE BE DENIED.

THE QUESTION FOR CONSIDERATION HERE, HOWEVER, IS NOT WHETHER THE COMPANY MADE AN ERROR IN ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE COMPANY'S BID. THERE WAS NOTHING ON THE FACE OF THE BID TO INDICATE AN ERROR THEREIN AND NO ALLEGATION WAS MADE UNTIL AFTER AWARD. THE ACCEPTANCE OF THE COMPANY'S BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER OR AGENT IS AUTHORIZED TO WAIVE OR RELEASE. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE NEEDS OF THE GOVERNMENT, AND THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE THERETO WAS UPON THE COMPANY. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. THEREFORE, IF THE COMPANY SUBMITTED A BID BASED UPON AN ERRONEOUS QUOTATION MADE UP BY REPRESENTATIVES OF THE COMPANY, THAT IS A MATTER WITH WHICH THE GOVERNMENT IS NOT CONCERNED AND THE COMPANY MUST ASSUME THE CONSEQUENCES THEREOF.

SUCH ERROR AS WAS MADE WAS DUE SOLELY TO THE COMPANY'S NEGLIGENCE OR THAT OF ITS AGENTS, AND WAS NOT INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. HENCE, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. IN VIEW OF THE FOREGOING, THE REQUEST OF THE CORRUGATED CONTAINER COMPANY FOR ADDITIONAL COMPENSATION MUST BE DENIED.