B-137893, JANUARY 29, 1959, 38 COMP. GEN. 517

B-137893: Jan 29, 1959

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IS AMBIGUOUS AND NOT CLEAR AS TO WHAT IS REQUIRED AND. AN INVITATION FOR BIDS WHICH IS MEANT TO RESTRICT OR MODIFY THE TERMS OF A REFERENCED FEDERAL SPECIFICATION WHICH GIVES THE BIDDER AN OPTION TO SUPPLY ONE OF A CHOICE OF MATERIALS SHOULD BE CLEAR AND THE RESTRICTION SHOULD BE UNDERSCORED TO BRING IT TO THE ATTENTION OF BIDDERS. ALTHOUGH A SUPPLIER'S ERRONEOUS QUOTATION TO A CONTRACTOR IS NOT SUFFICIENT. THE FACT THAT THE ERROR MAY BE DUE TO THE CONTRACTOR'S SUPPLIES DOES NOT BAR RELIEF IF THE ATTENDANT CIRCUMSTANCES ARE SUCH THAT THE ACCEPTANCE OF THE BID MAY NOT BE REGARDED AS IN GOOD FAITH. SUCH ERROR ON THE SUPPLIER'S PART PROPERLY CAN BE USED ONLY AS AN ADDITIONAL REASON TO SHOW THAT THE ACCEPTANCE WAS IN GOOD FAITH IN CASES WHERE THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR.

B-137893, JANUARY 29, 1959, 38 COMP. GEN. 517

CONTRACTS - SPECIFICATIONS - AMBIGUOUS AN INVITATION FOR BIDS TO SUPPLY AN ITEM WHICH SPECIFIED A PARTICULAR TYPE OF MATERIAL BUT WHICH ALSO PROVIDED THAT THE ITEM SHOULD BE IN ACCORDANCE WITH A FEDERAL SPECIFICATION AND A STORES STOCK CATALOG NUMBER, BOTH OF WHICH GAVE THE SUPPLIER AN OPTION AS TO THE TYPE OF MATERIAL TO BE USED, IS AMBIGUOUS AND NOT CLEAR AS TO WHAT IS REQUIRED AND, THEREFORE, THE ACCEPTANCE OF A LOW BID PREMISED UPON FURNISHING AN ITEM MADE FROM A MATERIAL CHOSEN BY THE CONTRACTOR, IN ACCORDANCE WITH THE OPTION, BUT WHICH DIFFERS FROM THE MATERIAL REQUIRED BY THE INVITATION, DOES NOT CONSUMMATE A BINDING CONTRACT. AN INVITATION FOR BIDS WHICH IS MEANT TO RESTRICT OR MODIFY THE TERMS OF A REFERENCED FEDERAL SPECIFICATION WHICH GIVES THE BIDDER AN OPTION TO SUPPLY ONE OF A CHOICE OF MATERIALS SHOULD BE CLEAR AND THE RESTRICTION SHOULD BE UNDERSCORED TO BRING IT TO THE ATTENTION OF BIDDERS. ALTHOUGH A SUPPLIER'S ERRONEOUS QUOTATION TO A CONTRACTOR IS NOT SUFFICIENT, BY ITSELF, TO AUTHORIZE RELIEF FROM A CONTRACT ENTERED INTO ON THE BASIS OF THAT QUOTATION, THE FACT THAT THE ERROR MAY BE DUE TO THE CONTRACTOR'S SUPPLIES DOES NOT BAR RELIEF IF THE ATTENDANT CIRCUMSTANCES ARE SUCH THAT THE ACCEPTANCE OF THE BID MAY NOT BE REGARDED AS IN GOOD FAITH, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR, AND SUCH ERROR ON THE SUPPLIER'S PART PROPERLY CAN BE USED ONLY AS AN ADDITIONAL REASON TO SHOW THAT THE ACCEPTANCE WAS IN GOOD FAITH IN CASES WHERE THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, JANUARY 29, 1959:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 7, 1958, REQUESTING A DECISION AS TO WHETHER LUMBER DEALERS, INC., DENVER, COLORADO, MAY BE RELIEVED FROM LIABILITY FOR EXCESS COSTS INCURRED BY THE GOVERNMENT DUE TO ITS DEFAULT UNDER PURCHASE ORDER NO. DA-4/16433 DATED FEBRUARY 7, 1958, ON ACCOUNT OF AN ERROR ALLEGED BY THE CONTRACTOR TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF THE CONTRACT ( PURCHASE ORDER).

THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, REGION 7, FORT WORTH, TEXAS, BY INVITATION FOR BIDS NO. DA-4/16433 ISSUED ON JANUARY 23, 1958, REQUESTED BIDS FOR TWO TYPES OF PADLOCKS. ITEM NO. 2, THE ONE HERE INVOLVED, COVERED 1,728 PADLOCKS DESCRIBED AS FOLLOWS:

PADLOCK: GENERAL PURPOSE; IN ACCORDANCE WITH TYPE E.F. OF FED. SPEC. FF-P -101C DATED APRIL 27, 1956. SOLID CASE OF BRASS; 10 OR MORE DISC OR BLADE TUMBLERS. GROOVED BRASS OR BRONZE DOUBLE-BITTED KEYS; HARDENED STEEL SHACKLE; WITHOUT CHAIN. SIZE 1/2

STOCK NO. 5340-664-1319

IN RESPONSE TO THE INVITATION LUMBER DEALERS, INC., SUBMITTED A BID DATED JANUARY 31, 1958, OFFERING TO FURNISH THE PADLOCK AS REQUIRED BY ITEM NO. 2 FOR A PRICE OF $0.808 EACH, LESS A DISCOUNT OF 2 PERCENT FOR PAYMENT WITHIN 30 CALENDAR DAYS. THE SECOND LOW BID OF $0.89 EACH, LESS DISCOUNT OF 2 PERCENT FOR PAYMENT WITHIN 20 CALENDAR DAYS, WAS SUBMITTED BY THE ATLANTIC HARDWARE AND SUPPLY CORPORATION, NEW YORK, NEW YORK. THE THIRD LOW BID RECEIVED WAS FROM JUNKUNC BROTHERS, CHICAGO, ILLINOIS, WHICH QUOTED A PRICE OF $0.90 EACH, LESS A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 20 CALENDAR DAYS. THE BID OF LUMBER DEALERS, INC., BEING THE LOWEST RECEIVED, WAS ACCEPTED ON FEBRUARY 7, 1958, BY PURCHASE ORDER NO. DA-4/16433.

BY LETTER DATED FEBRUARY 15, 1958, CONFIRMING TELEPHONE CONVERSATION OF FEBRUARY 11, LUMBER DEALERS, INC., ACKNOWLEDGED RECEIPT OF THE PURCHASE ORDER AND ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICE QUOTED WAS BASED ON FURNISHING A PADLOCK WITH A DIE-CAST ZINC ALLOY CASE RATHER THAN A CASE OF SOLID BRASS AS REQUIRED BY THE INVITATION. THE ERROR INVOLVED WAS ACTUALLY MADE BY THE CONTRACTOR'S SUPPLIER, THE CHICAGO LOCK COMPANY.

IN SUPPORT OF THE ALLEGED ERROR AND REASONS THEREFOR, THE BIDDER AND ITS SUPPLIER STATE THAT THEY HAVE REGULARLY FURNISHED OTHER GOVERNMENT AGENCIES AND OTHER REGIONS OF THE FEDERAL SUPPLY SERVICE WITH DIE-CAST ZINC ALLOY, TYPE E.F. PADLOCKS UNDER FEDERAL SPECIFICATION FF-P-101C DATED APRIL 27, 1956, AND UNDER FSA STORES STOCK CATALOG NO. 5340-664 1319. WAS ALSO DEVELOPED THAT THE SECOND LOW BIDDER WAS QUOTING ON A DIE-CAST ZINC ALLOY PADLOCK AND THAT JUNKUNC BROTHERS IS THE ONLY MANUFACTURER WHICH MAKES AN E.F. TYPE PADLOCK WITH A SOLID BRASS CASE.

DUE TO THE CONTRACTOR'S INABILITY TO FURNISH A PADLOCK IN ACCORDANCE WITH THE DESCRIPTION SET FORTH IN THE INVITATION, ITS RIGHT TO PROCEED WAS TERMINATED FOR DEFAULT AND THE PADLOCKS WERE PURCHASED FROM JUNKUNC BROTHERS AT $0.90 EACH, WHICH RESULTED IN EXCESS COST TO THE GOVERNMENT OF $171.35. THE CONTRACTOR REQUESTS RELIEF FROM LIABILITY FOR SUCH EXCESS COSTS ON THE BASIS OF THE MISTAKE IN ITS BID.

THE REQUEST FOR RELIEF WAS DENIED ADMINISTRATIVELY UPON THE BASIS OF 19 COMP. GEN. 168, WHEREIN IT WAS STATED AT PAGE 171:

* * * THE BID WAS EXACTLY AS INTENDED BY THE BIDDER AND THE ACCEPTANCE WAS AS INTENDED BY THE CONTRACTING OFFICER, AND THERE WAS NO MISUNDERSTANDING ON THE PART OF EITHER PARTY TO THE CONTRACT AS TO THE EQUIPMENT TO BE FURNISHED OR THE PRICE TO BE PAID THEREFOR. THE FACT THAT THE CONTRACTOR RELIED IN THE PREPARATION OF ITS BID ON A QUOTATION FURNISHED BY ITS SUPPLIER, WHICH QUOTATION LATER PROVED TO BE ERRONEOUS, IS NOT SUFFICIENT TO AUTHORIZE RELIEF FROM THE OBLIGATIONS OF THE CONTRACT VOLUNTARILY ENTERED INTO WITH THE GOVERNMENT. * * *

WHILE IT IS TRUE THAT AN ERROR IN A SUPPLIER'S QUOTATION IS NOT SUFFICIENT, BY ITSELF, TO AUTHORIZE RELIEF FROM A CONTRACT ENTERED INTO ON THE BASIS OF THAT QUOTATION, THE FACT THAT THE ERROR MAY BE DUE TO THE CONTRACTOR'S SUPPLIER IS NOT TO BE CONSIDERED AS A BAR TO RELIEF IF THE ATTENDANT CIRCUMSTANCES ARE SUCH THAT IT CANNOT BE SAID THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR. THE FACT THAT THE ERROR WAS MADE BY THE CONTRACTOR'S SUPPLIER PROPERLY CAN BE USED ONLY AS AN ADDITIONAL REASON TO SHOW THAT THE ACCEPTANCE WAS IN GOOD FAITH IN CASES WHERE THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. THE REASON FOR THIS IS THAT THE CONTRACTING OFFICER, IN THE ABSENCE OF OTHER CIRCUMSTANCES, MAY NOT BE CHARGED WITH CONSTRUCTIVE NOTICE OF THE SUPPLIER'S ERRORS WHEN THE CONTRACTOR ITSELF, WHO IS A REGULAR DEALER IN SUCH SUPPLIES, DID NOT SEE FIT TO QUESTION THE CORRECTNESS OF ITS SUPPLIER'S QUOTATION PRIOR TO QUOTING SUCH PRICE TO THE GOVERNMENT.

IT IS ALSO TRUE, AS WAS ALSO STATED IN 19 COMP. GEN. 168 AT PAGE 170 THAT

THE ESTABLISHED RULE IS THAT TO AUTHORIZE RELIEF FROM A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER ACCEPTANCE, THE EVIDENCE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE AND THAT IT WAS MUTUAL OR SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER, AT THE TIME OF ACCORDANCE, KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. * *

IN THE INSTANT CASE THE REFERENCED SPECIFICATION FF-P-101C DATED APRIL 27, 1956, PROVIDES IN PART AS FOLLOWS:

1.2.1 TYPES AND SIZES.--- PADLOCKS SHALL BE OF THE FOLLOWING TYPES AND SIZES, WITHOUT CHAIN UNLESS SPECIFIED WITH CHAIN (SEE 6.2).

TYPE EF--- DISK OR BLADE TUMBLER MECHANISM, 10 OR MORE DISK OR BLADE- TUMBLERS. SOLID BRASS, STEEL, OR DIE-CAST CASE; STEEL SHACKLE; SIZES 1, 1 1/2, 1 3/4, AND 2 INCHES.

3. REQUIREMENTS

3.1 PADLOCKS SHALL CONFORM TO ALL THE APPLICABLE REQUIREMENTS SPECIFIED IN THIS AND REFERENCED SPECIFICATIONS. UNLESS OTHERWISE INDICATED, VARIATIONS IN MATERIAL, CONSTRUCTION, AND APPEARANCE PERMITTED UNDER THESE REQUIREMENTS ARE AT THE OPTION OF THE SUPPLIER; THE SELECTION OF TYPE, SIZE, AND OTHER VARIATIONS AS INDICATED, IS THE PREROGATIVE OF THE PURCHASER.

3.2.1 METALS.--- THE METALS USED IN THE MANUFACTURE OF THE PADLOCKS AND KEYS SHALL BE OF THE SAME CHEMICAL COMPOSITION AND HARDNESS NORMALLY USED BY THE MANUFACTURER IN THE MANUFACTURE OF SPECIFIC TYPES OF PADLOCKS SPECIFIED IN THE PROCUREMENT DOCUMENT. WHERE BRASS IS SPECIFIED HEREIN, BRONZE MAY BE FURNISHED. THE METALS SHALL BE UNIFORM IN QUALITY AND CONDITION, SOUND, AND FREE FROM BLOW HOLES, SCALE, CRACKS AND OTHER INJURIOUS DEFECTS.

THE DESCRIPTION CONTAINED IN STORES STOCK CATALOG FOR ITEM 5340-665 1319, WHICH COVERS A 1 1/2-INCH WIDE PADLOCK, IS:

DISC- OR BLADE-TUMBLER PADLOCKS. GENERAL PURPOSE LOCK WITH SOLID CASE OF BRASS OR DIE-CAST ZINC ALLOY AND HARDENED STEEL SHACKLE. WITH KEYS; WITHOUT CHAIN. TYPE EF, FED. SPEC. FF-P-101C.

WITH RESPECT TO THE CONTRACTOR'S CONTENTION THAT HE HAS REGULARLY FURNISHED EF TYPE PADLOCKS WITH DIE-CAST CASE TO OTHER GSA REGIONAL OFFICES AND TO OTHER GOVERNMENT AGENCIES THE CONTRACTING OFFICER STATES --

* * * WHEN THIS PADLOCK WAS FIRST ADDED TO STOCK ABOUT THREE OR FOUR YEARS AGO, WE FOUND THAT IF THE PURCHASE DESCRIPTION REMAINED " SOLID CASE OF BRASS OR DIE-CAST ZINC ALLOY," ALL BIDS WOULD BE ON THE DIE CAST ZINC ALLOY AS THIS TYPE IS ABOUT 10-15 CENTS CHEAPER. IN THIS REGION WE STRUCK OUT "OR DIE-CAST ZINC ALLOY" BECAUSE OF OUR SALES IN THE COASTAL AREAS AND TO TROPICAL OVERSEAS STATIONS IN WHICH ADDED RUST RESISTANCE IS DESIRABLE. THE CONTRACTING OFFICER'S OPTION TO SPECIFY A PARTICULAR MATERIAL FOR THE CASE IS INCLUDED IN PARA. 3.1 OF THE APPLICABLE SPECIFICATION. ( ITALICS SUPPLIED.)

UNDER THE FEDERAL SPECIFICATION THE TYPE OF MATERIAL, UNLESS OTHERWISE INDICATED, IS AT THE OPTION OF THE SUPPLIER. IN VIEW THEREOF THERE WOULD APPEAR TO BE A QUESTION AS TO WHETHER THE TERMS OF THE INVITATION HERE INVOLVED ARE SUFFICIENTLY CLEAR TO MODIFY THE TERMS OF THE FEDERAL SPECIFICATION TO REQUIRE A CASE OF SOLID BRASS ONLY. IT IS BELIEVED THAT WHERE AN OPTION PERMITTED TO THE SUPPLIER IS BEING RESTRICTED THE LANGUAGE USED IN THE INVITATION SHOULD BE MOST CLEAR--- IN THIS CASE, FOR INSTANCE, AFTER GIVING THE FEDERAL SPECIFICATION NUMBER THE WORDS "EXCEPT SOLID CASE OF BRASS ONLY IS REQUIRED" OR SOME SIMILAR LANGUAGE SHOULD HAVE BEEN USED AND THE RESTRICTION SHOULD HAVE BEEN UNDERSCORED TO BRING ATTENTION THERETO. THIS NEED FOR CLARITY WOULD NOT APPEAR SO NECESSARY WHERE THE FEDERAL SPECIFICATION PROVIDES FOR ALTERNATES AT THE OPTION OF THE BUYER, SINCE IN SUCH A CASE A REFERENCE TO THE FEDERAL SPECIFICATION WITHOUT SPECIFYING THE CHOICE OF MATERIAL WOULD NOT BE COMPLETE AND IT WOULD BE ESSENTIAL FOR THE BIDDER TO ASCERTAIN THE TYPE OF MATERIAL DESIRED.

MOREOVER UNDER STORES STOCK CATALOG NO. 5340-664-1319 THE REQUISITIONING AGENCY HAS NO ELECTION WHATSOEVER AS TO CHOICE BETWEEN A CASE OF SOLID BRASS OR DIE-CAST ZINC ALLOY AND IF THE STATEMENT BY THE CONTRACTING OFFICER QUOTED ABOVE IS CORRECT, WHICH APPEARS TO BE THE CASE, AS A PRACTICAL MATTER THE 1319 PADLOCK IS GOING TO HAVE A CASE OF DIE-CAST ZINC ALLOY.

IN THE CIRCUMSTANCES PARTICULARLY SINCE THE STORES STOCK CATALOG NUMBER WAS ALSO GIVEN WE ARE OF THE OPINION THAT THE INVITATION WAS NOT CLEAR AS TO WHAT THE BIDDER WAS REQUIRED TO FURNISH, BUT WAS SUFFICIENTLY AMBIGUOUS TO HAVE CONTRIBUTED SUBSTANTIALLY TO THE ERROR. FURTHERMORE, THE CONTRACTING AGENCY WAS AWARE OF THE FACT THAT, UNLESS RESTRICTED, A PADLOCK WITH A DIE-CAST CASE WOULD BE FURNISHED UNDER THE EF TYPE AND THAT FROM PRIOR EXPERIENCE IT WAS KNOWN THAT THE ONLY MANUFACTURER WHO COULD FURNISH THE EF TYPE PADLOCK WITH THE CASE OF SOLID BRASS WAS JUNKUNC BROTHERS.

FOR THE FOREGOING REASONS WE DO NOT BELIEVE THAT THE ACCEPTANCE OF THE BID INVOLVED CONSUMMATED A VALID AND BINDING CONTRACT REQUIRING LUMBER DEALERS, INC., TO FURNISH EF TYPE PADLOCKS WITH A CASE OF SOLID BRASS. FOLLOWS, THEREFORE, THAT LUMBER DEALERS, INC., SHOULD BE RELIEVED OF ALL LIABILITY UNDER PURCHASE ORDER NO. DA-4/16433.