B-138798, DEC. 16, 1959

B-138798: Dec 16, 1959

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TO MCCRORY ELECTRIC COMPANY: REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 14. WHICH WAS ENTERED INTO BY YOU WITH THE DEPARTMENT OF THE ARMY ON OCTOBER 07. YOUR ORIGINAL REQUEST FOR AN INCREASE IN THE CONTRACT PRICE WAS DENIED FOR THE REASONS SET FORTH IN OUR DECISION OF MARCH 16. IT IS NOTED THAT PERTINENT PARTS OF THAT DECISION WERE BROUGHT TO YOUR ATTENTION BY LETTER DATED APRIL 15. THE BASIC FACTS AS THEY APPEAR IN THE RECORDS OF OUR OFFICE ARE AS FOLLOWS. WHICH WAS ISSUED BY THE MOBILE ARMY ENGINEER DISTRICT. 003.50 WERE RECEIVED AND THE GOVERNMENT'S ESTIMATE FOR THE PROJECT WAS $99. NO AMOUNT WAS ENTERED FOR ITEM NO. 21A. THERE FOLLOWED A SERIES OF TELEPHONE CALLS AND CONFERENCES BETWEEN YOU AND THE GOVERNMENT CONTRACTING OFFICIALS WHEN YOUR ATTENTION WAS CALLED TO THE OMISSION FROM YOUR BID OF ITEM NO. 21A AND AT THOSE TIMES INQUIRY ALSO WAS MADE AS TO THE CORRECTNESS OF THAT PART OF YOUR BID OF $0.55 PER CUBIC YARD FOR THE EXCAVATION WORK AS REQUIRED UNDER ITEMS NOS. 2.

B-138798, DEC. 16, 1959

TO MCCRORY ELECTRIC COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 14, 1959, IN FURTHER REGARD TO YOUR REQUEST FOR REFORMATION OF CONTRACT NO. DA-01-076-ENG 4419, WHICH WAS ENTERED INTO BY YOU WITH THE DEPARTMENT OF THE ARMY ON OCTOBER 07, 1958, TO PERFORM CERTAIN CONSTRUCTION WORK AT THE COLUMBUS AIR FORCE BASE, MISSISSIPPI.

YOUR ORIGINAL REQUEST FOR AN INCREASE IN THE CONTRACT PRICE WAS DENIED FOR THE REASONS SET FORTH IN OUR DECISION OF MARCH 16, 1959, TO THE SECRETARY OF THE ARMY. IT IS NOTED THAT PERTINENT PARTS OF THAT DECISION WERE BROUGHT TO YOUR ATTENTION BY LETTER DATED APRIL 15, 1959, FROM THE CONTRACTING OFFICER, CORPS OF ENGINEERS, U.S. ARMY ENGINEER DISTRICT, MOBILE, ALABAMA.

THE BASIC FACTS AS THEY APPEAR IN THE RECORDS OF OUR OFFICE ARE AS FOLLOWS. IN RESPONSE TO THE INVITATION, WHICH WAS ISSUED BY THE MOBILE ARMY ENGINEER DISTRICT, YOU SUBMITTED A BID OFFERING TO PERFORM ALL OF THE WORK REQUIRED FOR A TOTAL CONSIDERATION OF $56,325.60. TWO OTHER BIDS OF $143,918 AND $149,003.50 WERE RECEIVED AND THE GOVERNMENT'S ESTIMATE FOR THE PROJECT WAS $99,398. IN EVALUATING THE BIDS, THE CONTRACTING OFFICER NOTICED THAT ALTHOUGH YOU HAD ACKNOWLEDGED RECEIPT OF ALL AMENDMENTS TO THE INVITATION, YOU FAILED TO ENTER ON THE UNIT PRICE SCHEDULE, ITEM NO. 21A, ADDED BY AMENDMENT NO. 2, AND QUANTITIES OF CERTAIN OTHER ITEMS CHANGED BY THAT AMENDMENT. THE CONTRACTING OFFICER CORRECTED THE CHANGED QUANTITIES AND THE EXTENDED PRICES FOR THE OTHER ITEMS WHICH INCREASED YOUR BID TO $72,734.60; HOWEVER, NO AMOUNT WAS ENTERED FOR ITEM NO. 21A. ON THE DAY OF THE OPENING OF BIDS AND THEREAFTER, THERE FOLLOWED A SERIES OF TELEPHONE CALLS AND CONFERENCES BETWEEN YOU AND THE GOVERNMENT CONTRACTING OFFICIALS WHEN YOUR ATTENTION WAS CALLED TO THE OMISSION FROM YOUR BID OF ITEM NO. 21A AND AT THOSE TIMES INQUIRY ALSO WAS MADE AS TO THE CORRECTNESS OF THAT PART OF YOUR BID OF $0.55 PER CUBIC YARD FOR THE EXCAVATION WORK AS REQUIRED UNDER ITEMS NOS. 2, 3, 18, 19 AND 30. UPON BEING ASSURED THAT YOU WERE SATISFIED TO PROCEED WITH THE WORK AT THE TOTAL BID PRICE, AS ADJUSTED, NOTWITHSTANDING THE OMISSION OF AN AMOUNT TO COVER ITEM NO. 21A, AND THAT THE PRICE OF $0.55 PER CUBIC YARD FOR THE EXCAVATION WORK AS QUOTED YOU BY A SUBCONTRACTOR, WAS SATISFACTORY TO YOU, AN AWARD OF CONTRACT NO. DA-01-076-ENG-4419 WAS MADE TO YOU ON OCTOBER 17, 1958, IN THE ADJUSTED AMOUNT OF $72,734.60. AFTER THE AWARD YOU FORMALLY ALLEGED AN ERROR IN YOUR BID WITH RESPECT TO ITEMS NOS. 21A AND 2, 3, 18, 19 AND 30, AND REQUESTED THAT RELIEF BE GRANTED IN THE FORM OF A REFORMATION OF THE CONTRACT.

IT APPEARS FROM YOUR LETTER OF OCTOBER 14, 1959, THAT YOU NOW CONTEND THAT BECAUSE OF THE CIRCUMSTANCES ATTENDING THE ERRORS IN YOUR BID IT SHOULD HAVE BEEN REJECTED AT THE TIME OF PENING; THAT PRIOR TO AWARD YOU HAD STATED YOU WOULD APPRECIATE THE OPPORTUNITY OF BEING RELIEVED OF SIGNING THE CONTRACT BUT THAT AT NO TIME PRIOR TO THE ACTUAL SIGNING DID REPRESENTATIVES OF THE CORPS OF ENGINEERS MAKE KNOWN TO YOU THE POSSIBILITY THAT IT COULD BE DONE. ALSO, YOUR APPEAR TO TAKE EXCEPTION TO THE FINAL PAYMENT FOR CERTAIN QUANTITIES AS INCLUDED IN FINAL ESTIMATE NO. 4, REFERRING TO, AMONG OTHERS, THE ASSESSMENT OF $300 LIQUIDATED DAMAGES, DELETION OF A CERTAIN CONTRACT PROVISION, ETC.

IN CASES OF THIS KIND THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER ERRORS ACTUALLY WERE MADE IN YOUR BID, BUT RATHER WHETHER THE ACCEPTANCE OF THE BID UNDER THE ATTENDING CIRCUMSTANCES RESULTED IN A BINDING CONTRACTUAL OBLIGATION. THERE CAN BE NO DOUBT THAT SINCE YOU ADMITTED HAVING RECEIVED AMENDMENT NO. 2 TO THE INVITATION, WHICH COVERED ITEM NO. 21A, THAT A BONA FIDE ERROR WAS MADE BY YOU IN OMITTING FROM YOUR BID AN AMOUNT TO COVER THE WORK REQUIRED BY THIS ITEM. HOWEVER, AS STATED IN OUR DECISION OF MARCH 16, 1959, THE RECORD BEFORE US SHOWS CLEARLY THAT WHEN THIS OMISSION WAS NOTICED BY THE CONTRACTING OFFICIALS OF THE CORPS OF ENGINEERS, IT WAS EXPRESSLY CALLED TO YOUR ATTENTION AND, AT THAT TIME, YOU WERE ADVISED THAT SINCE YOU HAD ACKNOWLEDGED RECEIPT OF AMENDMENT NO. 2 YOU WOULD BE REQUIRED TO INCLUDE THE WORK COVERED BY ITEM NO. 21A IN THE CONTRACT AT NO EXTRA CHARGE OR THAT YOU COULD ALLEGE A MISTAKE. THE RECORD FURTHER SHOWS THAT AFTER CONSIDERING THESE ALTERNATIVES YOU ADVISED THE GOVERNMENT CONTRACTING OFFICIALS THAT WHILE YOU DID NOT WANT ITEM NO. 21A AT NO CHARGE, YOU DID NOT WANT TO ALLEGE A MISTAKE AND YOU WOULD TAKE IT WITHOUT CHARGE. HENCE, IT IS CLEAR THAT, NOTWITHSTANDING YOUR CONTENTION TO THE CONTRARY, THE CORPS OF ENGINEERS FULLY APPRISED YOU PRIOR TO AWARD THAT YOU COULD CLAIM AN ERROR AT THAT TIME. IT IS DIFFICULT TO SEE HOW THE GOVERNMENT COULD HAVE ACTED MORE PROMPTLY OR MORE CLEARLY MADE YOUR RIGHTS KNOWN. UNDER THESE CIRCUMSTANCES, THE SUBSEQUENT ACCEPTANCE OF YOUR BID MUST BE HELD TO HAVE RESULTED IN A BINDING OBLIGATION, THERE BEING NO BASIS FOR DISREGARDING YOUR BID. YOUR RIGHTS TO RELIEF HERE WOULD APPEAR TO BE PRECLUDED BY THE PRINCIPLES OF LAW LAID DOWN IN THE CASES OF THE MASSMAN CONSTRUCTION COMPANY, A CORPORATION V. THE UNITED STATES, 102 C.CLS. 699, AND THE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYD V. O. D. WILSON CO., INC., 133 F.2D 399. DENYING RELIEF IN BOTH OF THESE CASES FOR THE AMOUNTS CLAIMED BY REASON OF ERRORS IN BIDS, THE COURTS STATED, IN EFFECT, THAT WHERE THE CONTRACTOR, AS WELL AS THE GOVERNMENT, IS FULLY AWARE OF THE MISTAKE IN ITS BID AT THE TIME THE CONTRACT WAS SIGNED AND THE SIGNING BY THE CONTRACTOR WAS NOT IN ANY WAY INDUCED BY UNCONSCIONABLE CONDUCT--- FRAUD, MISTAKE, DURESS, ETC.- -- ON THE PART OF THE GOVERNMENT OR BY ANY PROMISES FOR SUBSEQUENT RELIEF, THE CONTRACTOR CAN RECOVER NO MORE THAN THE CONTRACT PRICE. THE COURTS POINTED OUT THAT THE CONTRACTOR COULD NOT, ON ANY THEORY, CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NO CONTRACT.

WITH RESPECT TO THE ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID OF $0.55 A CUBIC YARD FOR ITEMS NOS. 2, 3, 18, 19 AND 30, AGAIN THE RECORD SHOWS CLEARLY THAT PRIOR TO AWARD THE CORPS OF ENGINEERS MADE INQUIRY AS TO WHETHER THE LOW PRICE OF $0.55 A CUBIC YARD FOR THE EXCAVATION WORK WAS CORRECT. IN FACT, YOU ADMITTED IN YOUR LETTER DATED OCTOBER 14, 1959, THAT A SECOND REQUEST FOR VERIFICATION OF THIS PART OF YOUR BID WAS DIRECTED TO YOU BY THE CORPS OF ENGINEERS. NOTWITHSTANDING SUCH REPEATED REQUESTS FOR VERIFICATION, YOU ADVISED THAT YOU DID NOT ACTUALLY DEVELOP THE PRICE OF $0.55 PER CUBIC YARD BUT SINCE IT WAS QUOTED TO YOU BY A RELIABLE SUBCONTRACTOR, THE PRICE AS BID WAS SATISFACTORY TO YOU. UPON RECEIPT OF THIS INFORMATION, YOUR BID WAS ACCEPTED. IT IS CLEAR HERE ALSO THAT YOU WERE GIVEN EVERY OPPORTUNITY TO ALLEGE ANY ERROR WHICH MIGHT HAVE BEEN MADE IN YOUR BID OF ITEMS NOS. 2, 3, 18, 19 AND 30 PRIOR TO THE ACCEPTANCE THEREOF. YOUR RIGHTS AS TO ANY ERROR ALLEGED TO HAVE BEEN MADE SHOULD HAVE BEEN JUST AS OBVIOUS TO YOU AS YOUR RIGHT TO CLAIM AN ERROR WITH RESPECT TO ITEM NO. 21A, WHICH WAS FULLY EXPLAINED TO YOU BY THE CORPS OF ENGINEERS. SINCE NO ERROR WAS ALLEGED BY YOU AS TO ITEMS NOS. 2, 3, 18, 19 AND 30 PRIOR TO AWARD AND, SINCE YOU INDICATED CLEARLY THAT THE BID WAS CORRECT AND THAT YOU WERE WILLING TO STAND BY IT, THE ACCEPTANCE THEREOF MUST BE HELD TO HAVE BEEN MADE IN GOOD FAITH.

WITH RESPECT TO YOUR EXCEPTIONS TO THE PAYMENT UNDER FINAL ESTIMATE NO. 4, IN THE ABSENCE OF EVIDENCE TO THE CONTRARY, IT MUST BE ASSUMED THAT THE FINAL ESTIMATE WAS PREPARED IN ACCORDANCE WITH THE APPLICABLE CONTRACT PROVISIONS. IT IS REPORTED THAT LIQUIDATED DAMAGES FOR TWO DAYS AT $150 A DAY WERE ASSESSED SINCE THE CONTRACT WAS FIXED FOR COMPLETION ON APRIL 15, 1959, BUT WAS NOT ACCEPTABLE TO THE GOVERNMENT UNTIL APRIL 17, 1959. SINCE THERE IS NOTHING TO INDICATE THAT THE DELETED PROVISIONS TO WHICH YOU REFER WERE NOT INTENTIONALLY DELETED FROM THE SUBJECT CONTRACT, THERE IS NO BASIS FOR CONSIDERING ANY CLAIM PREDICATED ON SUCH DELETED PROVISIONS.

FOR THESE REASONS WE FIND NO JUSTIFICATION FOR ANY DEPARTURE FROM THE CONCLUSION REACHED IN OUR DECISION OF MARCH 16, 1959.