B-139892, JUL. 17, 1959

B-139892: Jul 17, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 10. ONLY TWO BIDS WERE RECEIVED. 675 (REEL DEPOSIT $37) ON ITEM NO. 1 FROM WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS PATENTLY DISPROPORTIONATE TO THE ONLY OTHER BID. - RECEIVED ON THAT ITEM SINCE IT WAS 62 PERCENT THEREOF. THAT WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS. THAT THE LOW BID OF WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS THEN ACCEPTED BY HIM AND AWARD OF CONTRACT NO. DA-44-008-ENG-1268 WAS ISSUED AUGUST 19. ADVICE BY ITS SUPPLIER THAT THEY WERE UNABLE TO FURNISH THE ASBESTOS VARNISHED AND LEAD CABLE AS REQUIRED SINCE THEY WERE NOT LICENSED TO MANUFACTURE THAT TYPE OF CABLE. THE CONTRACTOR STATED ALSO THAT AT THE TIME IT WAS REQUESTED TO VERIFY ITS BID THE EXACT DOLLAR AMOUNT OF THE DIFFERENCE BETWEEN ITS BID AND THE OTHER BID ON ITEM NO. 1 "NATURALLY" WAS NOT CALLED TO ITS ATTENTION.

B-139892, JUL. 17, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 10, 1959, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS) CONCERNING AN ERROR IN BID WESTINGHOUSE ELECTRIC SUPPLY COMPANY, WASHINGTON, D.C., ALLEGED AFTER AWARD OF CONTRACT NO. DA-44-008-ENG-1268 BASED ON THE BID.

BY INVITATION TO BID NO. ENG-44-008-59-1, ISSUED JULY 8, 1958, THE PURCHASING AND CONTRACTING OFFICE, FORT BELVOIR, VIRGINIA, SOLICITED BIDS FOR FURNISHING TWO ITEMS OF CABLE TO BE DELIVERED F.O.B. FORT BELVOIR, VIRGINIA. IN RESPONSE THERETO, ONLY TWO BIDS WERE RECEIVED, THE AGGREGATE LOW BID OF $1,876.48 FOR BOTH ITEMS BEING FROM WESTINGHOUSE ELECTRIC SUPPLY COMPANY WHICH INCLUDED A PRICE OF $1,675 (REEL DEPOSIT $37) ON ITEM NO. 1 DESCRIBED IN THE INVITATION, AS FOLLOWS:

"CABLE; ASBESTOS--- VARNISHED COMBRIC INSULATED POWER CABLE, 3 CONDUCTOR STRANDED, BURIAL TYPE, AVML-LEAD SHEATHED, A.W.G. 2/0 600 VOLT (MINIMUM 440 VOLT) 120 AMP, 110 DEGREES C, TO BE IN 1 (ONE) PIECE 1000 FEET LONG.'

THE CONTRACTING OFFICER REPORTS THAT THE BID OF $1,675 (REEL DEPOSIT $37) ON ITEM NO. 1 FROM WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS PATENTLY DISPROPORTIONATE TO THE ONLY OTHER BID--- $2,771 (ITEM 1 REEL DEPOSIT $60/ --- RECEIVED ON THAT ITEM SINCE IT WAS 62 PERCENT THEREOF; THAT WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS, THEREFORE, PROMPTLY REQUESTED TO VERIFY ITS PROPOSAL IN ITEM NO. 1, BEING ADVISED AT THE TIME THAT ITS PRICE SEEMED VERY LOW; THAT THE COMPANY IMMEDIATELY VERIFIED AND CONFIRMED ITS BID; AND THAT THE LOW BID OF WESTINGHOUSE ELECTRIC SUPPLY COMPANY WAS THEN ACCEPTED BY HIM AND AWARD OF CONTRACT NO. DA-44-008-ENG-1268 WAS ISSUED AUGUST 19, 1958, IN THE AGGREGATE AMOUNT OF $1,876.48 COVERING BOTH ITEMS NOS. 1 AND 2.

AFTER AWARD, WESTINGHOUSE ELECTRIC SUPPLY COMPANY IN LETTER DATED SEPTEMBER 23, 1958, TO THE CONTRACTING OFFICER REQUESTED THAT ITS CONTRACT BE CANCELED, BECAUSE OF AN ERRONEOUS QUOTATION ON THE MATERIAL COVERED BY ITEM NO. 1 ALLEGED BY ITS SUPPLIER, CRESCENT INSULATED WIRE AND CABLE COMPANY, AND ADVICE BY ITS SUPPLIER THAT THEY WERE UNABLE TO FURNISH THE ASBESTOS VARNISHED AND LEAD CABLE AS REQUIRED SINCE THEY WERE NOT LICENSED TO MANUFACTURE THAT TYPE OF CABLE. HOWEVER, IN A LATER LETTER DATED OCTOBER 3, 1958, TO THE CONTRACTING OFFICER, THE CONTRACTOR ADVISED THAT IT HAD MADE AN AGREEMENT WITH ANACONDA WIRE AND CABLE COMPANY WHEREBY THEY WOULD APPLY CABLE AS REQUIRED BY ITEM NO. 1 FOR A TOTAL PRICE OF $2,700; THAT IT WOULD DO EVERYTHING TO EXPEDITE PROMPT FULFILLMENT OF THE CONTRACT; AND THAT ANY CONSIDERATION WHICH MIGHT BE GIVEN IT WOULD BE APPRECIATED. IN LETTERS DATED OCTOBER 21 AND 23, 1958, THE CONTRACTOR AGAIN ALLEGED THAT AN ERROR HAD BEEN MADE, EXPLAINED THE CIRCUMSTANCES OF THE ERROR, AND REQUESTED AN INCREASE IN ITS CONTRACT PRICE OF $1,025 ON ITEM NO. 1. THE CONTRACTOR STATED ALSO THAT AT THE TIME IT WAS REQUESTED TO VERIFY ITS BID THE EXACT DOLLAR AMOUNT OF THE DIFFERENCE BETWEEN ITS BID AND THE OTHER BID ON ITEM NO. 1 "NATURALLY" WAS NOT CALLED TO ITS ATTENTION, BUT AS IT WAS AWARE THAT ITS SUPPLIER HAD DELIBERATELY QUOTED A PRICE APPROXIMATELY $300 LOWER THAN THE STANDARD PRICE FOR VARNISHED CAMBRIC AND LEAD CABLE IT ASSUMED THAT THIS DIFFERENCE ACCOUNTED FOR THE INQUIRY; AND THAT IT WAS NOT UNTIL AFTER THE AWARD AND ITS ORDER HAD REACHED THE FACTORY THAT THE SUPPLIER REALIZED THEIR ERROR AND ADVISED IT THEREOF. WESTINGHOUSE ELECTRIC SUPPLY COMPANY STEADFASTLY MAINTAINED THAT IN ITS TELEPHONE CONVERSATION WITH ITS SUPPLIER'S LOCAL REPRESENTATIVE "ASBESTOS" CABLE WAS ORDERED. THE CONTRACTOR PLEADED THAT SINCE IT DID NOT MAKE THE ORIGINAL ERROR ITS REQUEST FOR AN INCREASE IN THE CONTRACT SHOULD BE CONSIDERED IN ORDER THAT IT MIGHT NOT REALIZE SUCH A LARGE LOSS ON THE TRANSACTION AND, IN SUPPORT OF ITS REQUEST, SUBMITTED A CERTIFIED STATEMENT BY THE REPRESENTATIVE OF ITS ORIGINAL SUPPLIER TO THE EFFECT THAT THE ERROR WAS MADE IN HIS OFFICE AND NOT BY WESTINGHOUSE ELECTRIC SUPPLY COMPANY, AND COPIES OF ITS PURCHASE ORDER TO ANACONDA WIRE AND CABLE COMPANY AND OF THE LATTER'S QUOTATION FOR SUPPLYING THE CABLE MEETING THE CONTRACT REQUIREMENTS.

THE CONTRACTOR'S PROPOSAL IS FOR MODIFICATION OF THE CONTRACT BY INCREASING THE CONTRACT PRICE ON ITEM NO. 1 TO $2,700, PLUS $37 REEL DEPOSIT, AND THE AGGREGATE CONTRACT PRICE FOR BOTH ITEMS NOS. 1 AND 2 TO $2,901.48.

IN THE PRESENT CASE, THERE WAS NO MUTUAL MISTAKE. IN FACT, THE RECORD ESTABLISHES THAT THERE WAS NO MISTAKE, AS SUCH, IN THE BID OF WESTINGHOUSE ELECTRIC SUPPLY COMPANY, ITS BID AND THE ACCEPTANCE THEREOF BEING EXACTLY AS INTENDED. THE ALLEGED MISTAKE WAS ONE ON THE PART OF THE CONTRACTOR'S SUPPLIER ONLY WHICH, UNDER THE CIRCUMSTANCES, AFFORDS NO GROUND FOR RELIEF. SEE 31 COMP. GEN. 479. MOREOVER, THE CONTRACTING OFFICER, IN HIS REPORT COVERING THE CONTRACT TRANSACTIONS, STATES THAT NOTWITHSTANDING ITS ALLEGATION OF MISTAKE AND REQUEST FOR RELIEF, WESTINGHOUSE ELECTRIC SUPPLY COMPANY HAD FULLY AND SATISFACTORILY PERFORMED THE CONTRACT. IN THIS CONNECTION, SEE THE CASE OF BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON CO., INC., 133 F.2D 399, WHEREIN THE COURT STATED THAT THE APPELLEE COULD NOT PERFORM THE CONTRACT AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE.

WHILE WE NOTE THE RECOMMENDATIONS OF THE CONTRACTING OFFICER AND OF THE LEGAL DIVISION (ENGINEERS) FOR MODIFICATION OF THE CONTRACT, YET AN EXAMINATION OF THE FACTS IN THIS CASE WOULD NOT SEEM TO WARRANT US AUTHORIZING SUCH MODIFICATION, PARTICULARLY IN VIEW OF THE VERIFICATION OF THE BID BY THE CONTRACTOR PRIOR TO AWARD AND, ALSO, SINCE THERE WAS ONLY ONE OTHER BID.

ACCORDINGLY, CONTRACT NO. DA-44-008-ENG-1268 MAY NOT BE REFORMED TO INCREASE THE PRICE STATED THEREIN.