B-137155, SEPTEMBER 17, 1958, 38 COMP. GEN. 218

B-137155: Sep 17, 1958

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CONTRACTS - MISTAKES - EXECUTION OF CONTRACT - ALLEGATION AFTER AWARD A BIDDER WHO AT THE TIME OF OPENING EXPRESSED DOUBT ORALLY AS TO THE CORRECTNESS OF HIS BID BUT WHO DID NOT ALLEGE SPECIFIC ERRORS AND FURNISH EVIDENCE OF ERRORS UNTIL SOME TIME AFTER AWARD WHICH WAS MADE FIVE DAYS AFTER OPENING WAS AFFORDED A REASONABLE TIME BETWEEN OPENING AND AWARD TO ALLEGE UNEQUIVOCALLY THAT THE BID CONTAINED ERRORS AND TO SUBMIT PROOF. THE WRITTEN CONTRACT WHICH WAS SIGNED BY THE BIDDER WITHOUT PROTEST IS PRESUMED TO EXPRESS THE UNDERSTANDING OF THE PARTIES AND PRECLUDES CORRECTION OF THE CONTRACT PRICE. 1958: REFERENCE IS MADE TO A LETTER DATED AUGUST 19. WHICH WAS AWARDED ON THE BASIS OF SUCH ERRONEOUS BID.

B-137155, SEPTEMBER 17, 1958, 38 COMP. GEN. 218

CONTRACTS - MISTAKES - EXECUTION OF CONTRACT - ALLEGATION AFTER AWARD A BIDDER WHO AT THE TIME OF OPENING EXPRESSED DOUBT ORALLY AS TO THE CORRECTNESS OF HIS BID BUT WHO DID NOT ALLEGE SPECIFIC ERRORS AND FURNISH EVIDENCE OF ERRORS UNTIL SOME TIME AFTER AWARD WHICH WAS MADE FIVE DAYS AFTER OPENING WAS AFFORDED A REASONABLE TIME BETWEEN OPENING AND AWARD TO ALLEGE UNEQUIVOCALLY THAT THE BID CONTAINED ERRORS AND TO SUBMIT PROOF; THEREFORE, THE WRITTEN CONTRACT WHICH WAS SIGNED BY THE BIDDER WITHOUT PROTEST IS PRESUMED TO EXPRESS THE UNDERSTANDING OF THE PARTIES AND PRECLUDES CORRECTION OF THE CONTRACT PRICE.

TO THE SECRETARY OF THE ARMY, SEPTEMBER 17, 1958:

REFERENCE IS MADE TO A LETTER DATED AUGUST 19, 1958, FROM THE ASSISTANT SECRETARY OF THE ARMY ( LOGISTICS), FORWARDING THE FILE ON A MISTAKE ALLEGED BY JOS. JURISICH MARINE SERVICE, INC., IN A BID SUBMITTED TO YOUR DEPARTMENT UNDER IFB TC-16-143-58-118, AND REQUESTING ADVICE AS TO WHETHER THE BIDDER'S REQUEST FOR AN INCREASE IN THE PRICE OF CONTRACT NO. DA 16- 143-400-TC-120, WHICH WAS AWARDED ON THE BASIS OF SUCH ERRONEOUS BID, MAY BE GRANTED.

THE FILE INDICATES THAT THE INVITATION REQUESTED BIDS ON (1) THE REMOVAL AND REPLACEMENT OF 24, NINETY FOOT, BROKEN PILINGS, (2) THE REPLACEMENT OF 960 LINEAR FEET OF SALVAGED WALING, AND (3) THE REPLACEMENT OF 5 MBF OF WALING WITH NEW WALING, AT NEW ORLEANS ARMY TERMINAL, NEW ORLEANS, LOUISIANA. ESTIMATED COST OF THESE SERVICE WAS $22,200 AND TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. UPON BID OPENING ON JUNE 23, 1958, IT WAS FOUND THAT THE LOW BID WAS SUBMITTED BY JOS. JURISICH MARINE SERVICE, INC., IN THE AMOUNT OF $14,077, WHILE THE OTHER BID WAS $22,812.40. THE RECORD DOES NOT INDICATE THAT ANY QUESTION AS TO THE CORRECTNESS OF THE LOW BID WAS RAISED AT THE TIME OF, OR IMMEDIATELY FOLLOWING, BID OPENING; HOWEVER IT DOES INDICATE THAT DURING THE COURSE OF A PREAWARD SURVEY ON JUNE 25 THE BIDDER "CASUALLY STATED THAT HE MAY HAVE MADE A MISTAKE IN HIS BID.' A REPRESENTATIVE OF THE CONTRACTING OFFICER ADVISED THE BIDDER AT THAT TIME OF THE ACTION WHICH SHOULD BE TAKEN IN THE MATTER. HOWEVER, THE CONTRACTING OFFICER STATES THAT THIS DISCUSSION WAS OF AN INFORMAL NATURE AND IT DID NOT APPEAR AT THAT TIME THAT THE BIDDER WAS GIVING THE MATTER SERIOUS CONSIDERATION. SINCE NO FORMAL ALLEGATION OF ERROR HAD BEEN RECEIVED AS OF JUNE 30 THE CONTRACTING OFFICER FURTHER STATES THAT HE ASSUMED THE BIDDER HAD DECIDED NO MISTAKE HAD BEEN MADE AND, ACCORDINGLY, THE AWARD OF CONTRACT DA 16-143-400-TC-120 WAS MADE TO THE LOW BIDDER ON THAT DATE.

A FORMAL ALLEGATION OF THREE ERRORS IN A TOTAL AMOUNT OF $3,288 WAS SUBMITTED BY THE CONTRACTOR UNDER DATE OF JULY 10. SUCH ERRORS ALL OCCURRED IN THE COMPUTATION OF THE BID PRICE ON THE NO. 1 ITEM (REMOVAL AND REPLACEMENT OF 24, NINETY FOOT, BROKEN PILINGS), AND, AS INDICATED BY THE CONTRACTOR'S WORKSHEET, CONSISTED OF $2,160 RESULTING FROM USE OF A UNIT PRICE OF $10 FOR REMOVING 24 PILINGS INSTEAD OF AN INTENDED UNIT PRICE OF $100; A MATHEMATICAL ERROR OF $648 IN COMPUTING THE RENTAL OF PILE DRIVING EQUIPMENT FOR 96 HOURS AT $25 PER HOUR AT $1,920, RATHER THAN $2,400; AND INCREASED PROFIT AND OVERHEAD IN THE AMOUNT OF $480 ARISING OUT OF SUCH CORRECTIONS. NO EXPLANATION IS GIVEN BY THE CONTRACTOR OF HIS FAILURE TO ALLEGE ERROR PRIOR TO AWARD, AND THE CONTRACTING OFFICER STATES THAT THE CONTRACTOR'S ESTIMATOR COULD OFFER NO REASON FOR SUCH DELAY, EXCEPT THAT IT WAS BROUGHT TO HIS ATTENTION BY THE PRESIDENT OF THE CONTRACTING CORPORATION ON JULY 9, AT WHICH TIME HE (THE ESTIMATOR) TOOK APPROPRIATE ACTION.

WITH RESPECT TO THE FIRST ERROR AS SET OUT ABOVE, THE CONTRACTOR'S LETTER OF JULY 10 STATES AS FOLLOWS:

IT IS OBVIOUS THAT ERROR NO. 1 WAS INTENDED TO READ, PULL 24 PILES $100.00 ( BISSO) $2400.00, SINCE WE HAVE A VERBAL QUOTATION FROM E. N. BISSO AND SONS, MARINE CONTRACTORS FOOT OF WALNUT STREET IN NEW ORLEANS FOR RENTAL OF FLOATING CRANE OF SUFFICIENT CAPACITY TO PULL THESE PILES FOR RENTAL RATE OF $75.00 PER HOUR PLUS $30.00 PER HOUR WHILE UNDER TOW, PLUS TOWING CHARGES TO AND FROM THE JOB SITE.

THE ESTIMATED TOWING CHARGES IN THIS INSTANCE WOULD BE $45.00 PER HOUR FOR 4 HOURS TUG RENTAL $180.00, AND $30.00 PER HOUR FOR 4 HOURS RENTAL OF CRANE WHILE IN TOW $120.00.

THE BREAK OUT COST WE USED WAS MADE ON SCRATCH PAPER AND WAS NOT RETAINED, HOWEVER FROM MEMORY IT WAS APPROXIMATELY AS FOLLOWS:

CHART TUG HIRE $45.00 PER HOUR 4 HOURS--------------------------- $180.00 DEAD TIME RENTAL OF CRANE IN TWO $30.00 PER HOUR 4 HOURS-- 120.00 WORKING TIME RENTAL OF CRANE $75.00 PER HOUR 28 HOURS----- 2,100.00

TOTAL--------------------------------------------- $2,400.00

THE BISSO FIRM WOULD NOT HAZARD AN ESTIMATE AS TO THE LENGTH OF TIME REQUIRED TO PULL THE 24 PILES, HOWEVER THEY DID WARN US THAT IT COULD WELL BE AN EXPENSIVE UNDERTAKING AS THEIR EXPERIENCE IN PULLING PILES 90 FEET IN LENGTH IN THE VICINITY OF THIS JOB HAD PROVED TO BE A DIFFICULT TASK. FOR THESE REASONS WE BELIEVE OUR INTENDED ESTIMATE OF COST OF $100.00 EACH IS CONSERVATIVE.

EFFORTS OF THE CONTRACTING OFFICER TO VERIFY THE ALLEGATIONS OF THE CONTRACTOR ARE DESCRIBED IN THE FINDINGS AND RECOMMENDATIONS OF THE CONTRACTING OFFICER AS FOLLOWS:

AFTER A DETAILED DISCUSSION WITH MR. DALTON SMITH, ESTIMATOR FOR THE CONTRACTOR, AND A THOROUGH ANALYSIS OF THE CONTRACTOR'S LETTER OF 10 JULY 1958, WITH INCLOSURES THERETO, IT APPEARS THAT THERE WAS AN ACTUAL AND HONEST MISTAKE DUE TO ERRORS IN CALCULATIONS. TO FURTHER SUPPORT THIS OPINION, THE QUOTATION OF THE SUB-CONTRACTOR (E. N. BISSO AND SONS, 285 WALNUT ST., NEW ORLEANS, LOUISIANA) AS STATED IN PARAGRAPH B ABOVE WAS VERIFIED ON 16 JULY 1958 AND FOUND TO BE CORRECT. HOWEVER, E. N. BISSO AND SONS REFUSED TO CONFIRM THEIR QUOTATION IN WRITING, STATING THAT HIS TARIFF WOULD SUFFICE FOR A WRITTEN QUOTATION. HE FURTHER STATED THAT HIS QUOTATION WAS BELOW HIS TARIFF RATE, WHICH WAS VERIFIED AS CORRECT. PAST DIRECT EXPERIENCE WITH BISSO ON GOVERNMENT TUG AND CRANE HIRE REQUIREMENTS AND HIS TARIFF RATES REVEALS THAT THE QUOTATION FURNISHED THE CONTRACTOR COULD BE FACTUAL. * * *

THE CORRECTNESS OF THE CONTRACTOR'S ALLEGATIONS WITH RESPECT TO THE TWO REMAINING ERRORS APPEARS TO BE ADMITTED.

THE RULE WITH RESPECT TO THE OBLIGATION OF A BIDDER WHO ORALLY ALLEGES A MISTAKE IN HIS BID AFTER BID OPENING IS STATED IN 17 COMP. GEN. 599 AT PAGE 600-601 AS FOLLOWS:

IT IS NOT SUFFICIENT IN CASES WHERE BIDS ARE OPENED AND THE AMOUNTS OF ALL THE BIDS DISCLOSED, THAT THE LOW BIDDER MERELY ALLEGE ERROR IN ITS BID IN ORDER TO BE RELIEVED OF FURNISHING THE SUPPLIES OR MATERIALS ON WHICH IT HAS BID. IN ORDER TO OBTAIN RELIEF IN SUCH CASES THERE SHOULD BE AN IMMEDIATE SUBMISSION OF SUCH PROOF AND EXPLANATION AS TO LEAVE NO ROOM FOR DOUBT THAT A BONA FIDE MISTAKE WAS MADE AND HOW IT OCCURRED. THE MERE FACT THAT YOUR BID WAS SOME 20 PERCENT OR 25 PERCENT LOWER THAN THE NEXT HIGHER BID RECEIVED IS NOT OF ITSELF SUFFICIENT EVIDENCE THAT YOU MADE A MISTAKE ON YOUR QUOTATION. AT THE TIME YOUR BID WAS ACCEPTED THERE WAS NOTHING BEFORE THE CONTRACTING OFFICER TO SHOW CONCLUSIVELY THAT THE BID WAS NOT AS INTENDED OR THAT THE ALLEGATION OF ERROR WAS NOT MERELY TO AVOID THE CONSEQUENCES OF AN ILL-ADVISED BID. * * *

WHILE THERE APPEARS TO BE NO PRESENT DOUBT ON THE PART OF THE CONTRACTING OFFICER THAT THE BID PRICE INCLUDED ERRORS AS ALLEGED BY THE BIDDER, IT MUST BE NOTED THAT THE BIDDER WAS UNABLE TO SUBSTANTIATE, FROM HIS OWN RECORDS, THE BREAK-OUT COSTS USED TO SUPPORT THE UNIT FIGURE OF $100 PER PILING WHICH HE CONTENDS WAS ERRONEOUSLY ENTERED ON HIS WORKSHEET AS $10 PER PILING. THE RECORD CONTAINS NO INDICATION AS TO WHY THE BIDDER DID NOT ALLEGE ERROR PROMPTLY AFTER BID OPENING; NEITHER IS THERE ANY INDICATION THAT THE DELAY UNTIL AFTER AWARD IN SUBMITTING SUCH ALLEGATION WAS INTENDED TO PRECLUDE ANY POSSIBILITY OF BID REJECTION. HOWEVER, THE FACT REMAINS THAT THE EVIDENCE WHICH THE BIDDER SUBMITTED AFTER AWARD, WHILE SUFFICIENT TO ESTABLISH THAT THE BID PRICE WAS IN ERROR, WOULD HAVE BEEN WHOLLY INSUFFICIENT TO ESTABLISH WITH ANY DEGREE OF CERTAINTY THAT THE CONTRACTOR INTENDED TO COMPUTE ITS BID ON A UNIT PRICE OF $100, OR UPON ANY OTHER ASCERTAINABLE FIGURE. AN ALLEGATION OF ERROR BY THE BIDDER PRIOR TO AWARD, WITHOUT CONCLUSIVE EVIDENCE TO ESTABLISH THE INTENDED BID PRICE, WOULD HAVE PRECLUDED AN AWARD BASED UPON SUCH ERRONEOUS BID (SEE 35 COMP. GEN. 279; 31 ID. 183), AND THE ALLOWANCE OF ANY INCREASE IN THE CONTRACT PRICE AT THIS TIME WOULD THEREFORE BE BASED CORRECTION OF ERRORS WHICH WOULD, PRESUMABLY, HAVE RESULTED IN AN AWARD TO THE REMAINING BIDDER IF SUCH ERRORS HAD BEEN ALLEGED PRIOR TO AWARD. UNDER THE CIRCUMSTANCES, IT IS OUR OPINION THAT IT WAS INCUMBENT UPON THE BIDDER TO ALLEGE UNEQUIVOCALLY THAT ITS BID CONTAINED AN ERROR, AND, IF IT WISHED TO WITHDRAW OR CORRECT THE BID, TO SUBMIT SUBSTANTIATING EVIDENCE OF ANY ERROR AS SOON AS POSSIBLE AFTER IT BECAME AWARD OF THE POSSIBILITY THAT AN ERROR HAD BEEN MADE. THE FIVE-DAY PERIOD BETWEEN THE DATE ON WHICH THE BIDDER EXPRESSED DOUBT ORALLY AS TO THE CORRECTNESS OF ITS BID AND THE DATE OF CONTRACT AWARD AFFORDED A REASONABLE TIME TO DO SO.

FURTHERMORE, THE RECORD BEFORE US INDICATES THAT A WRITTEN CONTRACT, BASED UPON THE AWARD, WAS SIGNED THEREAFTER BY THE BIDDER WITHOUT PROTEST OR INDICATION THAT ANY ERROR HAD BEEN MADE. IF THE BIDDER WISHED TO WITHDRAW OR CORRECT ITS BID BECAUSE OF AN ERROR THEREIN IT SHOULD NOT HAVE SIGNED THE CONTRACT WITH KNOWLEDGE OF THE FACT THAT THE CONTRACT PRICE MIGHT NOT BE THE AMOUNT IT HAD INTENDED TO BID. THE RULE IS SETTLED THAT A WRITTEN CONTRACT IS PRESUMED IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. SEE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON 100., INC., 133 F.2D 399; THE MASSMAN CONSTRUCTION CO. V. UNITED STATES, 102 C.1CLS. 699, CERTIORARI DENIED, 325 U.S. 866; 25 COMP. GEN. 536; 23 ID. 596.

ACCORDINGLY, IT IS OUR OPINION THAT ANY CORRECTION OF THE CONTRACT PRICE AT THIS TIME WOULD BE UNJUSTIFIED.

THE FILE TRANSMITTED WITH THE LETTER FROM THE ASSISTANT SECRETARY IS ENCLOSED.