B-139939, AUG. 21, 1959

B-139939: Aug 21, 1959

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TO KEY WEST ELECTRICAL REPAIR CO.: FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 16 AND JULY 2. TWO BIDS WERE RECEIVED IN THE RESPECTIVE AMOUNTS OF $665 AND $855. SINCE YOUR BID WAS THE LOWEST IT WAS ACCEPTED AND AWARD OF INFORMAL CONTRACT NO. 18- 59 WAS ISSUED TO YOU UNDER DATE OF JUNE 12. IT IS ADMINISTRATIVELY REPORTED THAT THE WORK WAS COMMENCED ON JUNE 22. EXPLAINING THAT "THE WORK SHEETS WERE. DISPOSED OF AFTER THE CONTRACT WAS MAILED.'. YOU STATED THAT YOUR INTENDED UNIT PRICE WAS COMPUTED AT $665. THAT THROUGH A TYPING ERROR IN THE PREPARATION OF THE BID FROM THE AMOUNT OF $665 WAS ENTERED AS YOUR TOTAL BID PRICE FOR THE TWO GENERATORS INSTEAD OF $1. YOU STATED THAT THE REPAIRS ON THE TWO GENERATORS WERE NEARLY COMPLETED AND THAT YOU DID NOT WISH TO BE RELIEVED FROM THE CONTRACT BUT DESIRED AN ADJUSTMENT IN THE WHOLE CONTRACT PRICE.

B-139939, AUG. 21, 1959

TO KEY WEST ELECTRICAL REPAIR CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS DATED JUNE 16 AND JULY 2, 1959, CONCERNING YOUR CLAIM FOR RELIEF UNDER INFORMAL CONTRACT NO. 18 59 WITH THE UNITED STATES NAVAL STATION, KEY WEST, FLORIDA.

IN RESPONSE TO A REQUEST FOR BIDS--- TO BE OPENED JUNE 9, 1959--- FOR SUPPLYING ALL LABOR AND MATERIALS TO "REWIND ARMATURES AND INSTALL LEADS ON STATERS OF TWO GENERATOR UNITS, U.S. NAVAL STATION, KEY WEST, FLA.' TWO BIDS WERE RECEIVED IN THE RESPECTIVE AMOUNTS OF $665 AND $855. SINCE YOUR BID WAS THE LOWEST IT WAS ACCEPTED AND AWARD OF INFORMAL CONTRACT NO. 18- 59 WAS ISSUED TO YOU UNDER DATE OF JUNE 12, 1959. IT IS ADMINISTRATIVELY REPORTED THAT THE WORK WAS COMMENCED ON JUNE 22, 1959, AND THAT YOU ESTIMATE THE COMPLETION DATE TO BE AUGUST 17, 1959.

AFTER AWARD AND PRIOR TO COMMENCEMENT OF THE WORK, YOU STATED ORALLY TO THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN YOUR BID, BUT YOU FURNISHED NO DOCUMENTARY PROOF THEREOF, EXPLAINING THAT "THE WORK SHEETS WERE, PER USUAL, DISPOSED OF AFTER THE CONTRACT WAS MAILED.' IN YOUR LETTERS OF JUNE 16 AND JULY 2, IN EXPLANATION OF THE ALLEGED ERROR, YOU STATED THAT YOUR INTENDED UNIT PRICE WAS COMPUTED AT $665, A TOTAL OF $1,330 FOR THE TWO GENERATORS, BUT THAT THROUGH A TYPING ERROR IN THE PREPARATION OF THE BID FROM THE AMOUNT OF $665 WAS ENTERED AS YOUR TOTAL BID PRICE FOR THE TWO GENERATORS INSTEAD OF $1,330, AS INTENDED. IN YOUR LETTER OF JUNE 16, YOU REQUESTED TO BE RELEASED FROM THE CONTRACT; HOWEVER, IN YOUR LETTER DATED JULY 2, YOU STATED THAT THE REPAIRS ON THE TWO GENERATORS WERE NEARLY COMPLETED AND THAT YOU DID NOT WISH TO BE RELIEVED FROM THE CONTRACT BUT DESIRED AN ADJUSTMENT IN THE WHOLE CONTRACT PRICE.

THE QUESTION FOR CONSIDERATION HERE IS NOT WHETHER YOU MADE A MISTAKE IN YOUR BID, AN ALLEGED, BUT WHETHER THE ACCEPTANCE OF YOUR BID CONSUMMATED A VALID AND BINDING CONTRACT. THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

WHILE IT MAY BE THAT YOU MADE A MISTAKE IN YOUR BID, AS ALLEGED, BY YOUR OWN ADMISSION SUCH ERROR WAS THE RESULT OF YOUR CARELESSNESS OR OVERSIGHT IN THE PREPARATION OF YOUR BID AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS WAS MADE, THEREFORE, WAS UNILATERAL AND NOT MUTUAL. THE OFFICER IN CHARGE OF CONSTRUCTION AT THE KEY WEST NAVAL STATION REPORTS THAT THERE WAS NOTHING IN YOUR BID TO INDICATE TO HIM THAT A MISTAKE WAS MADE AND, IN VIEW OF THE SMALL DIFFERENCE BETWEEN YOUR BID AND THE ONLY OTHER BID RECEIVED, HE DID NOT SUSPECT AN ERROR IN YOUR BID PRIOR TO AWARD OF THE CONTRACT.

THUS, SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF YOUR BID, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, WAS IN GOOD FAITH AND RESULTED IN A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

IN THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS FOR AUTHORIZING ANY ADJUSTMENT IN THE PRICE STIPULATED IN INFORMAL CONTRACT NO. 18-59.