B-140591, SEP. 18, 1959

B-140591: Sep 18, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED AUGUST 26. BECAUSE OF A MISTAKE ALLEGED AFTER AWARD IN ITS BID ON WHICH THE CONTRACT IS BASED. UNIT PRICE BIDS WERE REQUESTED. EACH BIDDER WAS REQUIRED TO INDICATE THE NUMBER OF RACKS FOR WHICH IT WOULD ACCEPT AN AWARD. SHOW THAT "35 HOLDERS" WERE TO BE FURNISHED WITH EACH RACK. ADJUSTABLE MAGAZINE HOLDERS WILL BE FURNISHED. WHEN THE ADJUSTABLE HOLDERS ARE USED. YOUR BID IS INTERPRETED THAT RACK INCLUDES 35 ADJUSTABLE MAGAZINE HOLDERS. AS TO THAT ITEM BY ONE OF THE FIRM'S REPRESENTATIVES WAS IN ERROR. THAT HE SHOULD HAVE WIRED THAT THE BID WAS BASED UPON "FURNISHING OUR STANDARD NO. 460M RACK. IN SUPPORT OF ITS CLAIM OF ERROR CERTIFIED COPIES WERE FORWARDED OF THE FIRM'S WORKSHEETS ON WHICH ITS ORIGINAL BID PRICE WAS COMPUTED AND OF A LETTER DATED APRIL 9.

B-140591, SEP. 18, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 26, 1959, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), CONCERNING A REQUEST OF SEITZ AND GEORGE OFFICE EQUIPMENT CO., DAYTON, OHIO, FOR AN INCREASE IN THE PRICE OF ITEM NO. 21 ON CONTRACT NO. O.I. 8649-59Q, BECAUSE OF A MISTAKE ALLEGED AFTER AWARD IN ITS BID ON WHICH THE CONTRACT IS BASED.

BY INVITATION NO. QM 33-031-59-585 ISSUED MARCH 23, 1959, AND AMENDMENT NO. 1, THE QUARTERMASTER PURCHASING AGENCY, COLOMBUS GENERAL DEPOT, SOLICITED BIDS FROM 23 FIRMS FOR FURNISHING CERTAIN ITEMS OF EQUIPMENT IN ACCORDANCE WITH THE SPECIFICATIONS AND CONDITIONS OF THE INVITATION FOR SHIPMENT ON OR BEFORE JULY 31, 1959, TO THE TRANSPORTATION OFFICER, BROOKLYN ARMY TERMINAL, BROOKLYN, NEW YORK. ITEM NO. 21 CALLED FOR A TOTAL QUANTITY OF 51 MAGAZINE RACKS, DESCRIBED IN THE INVITATION, AS FOLLOWS:

"RACK, MAGAZINE, WOOD, LIGHT FINISH, APPROX. 48 INCHES WIDE, 22 INCHES DEEP, 60 INCHES HIGH, 7 SLOPED DISPLAY SHELVES. CATALOG NO/7757.1, LIBRARY BUREAU OF REMINGTON RAND, OR EQUAL.'

UNIT PRICE BIDS WERE REQUESTED, AND EACH BIDDER WAS REQUIRED TO INDICATE THE NUMBER OF RACKS FOR WHICH IT WOULD ACCEPT AN AWARD. THE SPECIFICATIONS OF CATALOG NO. 7757.1, LIBRARY BUREAU OF REMINGTON RAND, REFERRED TO IN THE DESCRIPTION, SHOW THAT "35 HOLDERS" WERE TO BE FURNISHED WITH EACH RACK.

THE ABSTRACT OF BIDS DISCLOSES THAT SIX FIRMS SUBMITTED BIDS, F.O.B. ORIGIN, ON ITEM NO. 21, AS FOLLOWS:

MINIMUM

NO. OF

BIDDER UNITS UNIT PRICE

------ ------- ---------- COLE FURNITURE AND EQUIPMENT CO. 46 $199.80 WALKERBILT WOODWORK, INC. 51

218.00 MAX BLAU AND SONS 50 136.00 BRO DART INDUSTRIES 51 300.00 REMINGTON RAND DIV. OF SPERRY

360.00 SEITZ AND GEORGE OFFICE EQUIPMENT CO. 51 125.27

SEITZ AND GEORGE OFFICE EQUIPMENT CO. IN ITS BID OFFERED TO FURNISH 51 RACKS AT A PRICE OF $125.27 EACH, OR A TOTAL OF $6,388.77, AND DESCRIBED THE ITEM IN THE FOLLOWING MANNER:

"RACK, MAGAZINE, WOOD, LIGHT FINISH, APPROX. 48 INCHES WIDE, 22 INCHES DEEP, 60 INCHES HIGH, 7 SLOPED DISPLAY SHELVES, OR EQUAL. 460M MYRTLE DESK COMPANY, LIBRARY DIV.' AND FORWARDED WITH ITS BID AN EXCERPT OF THREE PAGES FROM ITS SUPPLIER'S BROCHURE ILLUSTRATING AND DESCRIBING CATALOG NO. 460M, EIGHT SECTION MAGAZINE RACK--- OFFERED IN ITS BID AS EQUAL TO THE REMINGTON RANK RACK CATALOG NO. 7757.1. THE BROCHURE DESCRIPTION CONTAINS THE PROVISION THAT "WHEN SPECIFIED AND ORDERED, ADJUSTABLE MAGAZINE HOLDERS WILL BE FURNISHED, 35 PER CASE. THESE SHALL BE OF A TAN HEAVY GAUGE STEEL. WHEN THE ADJUSTABLE HOLDERS ARE USED, THE COMPARTMENT BOTTOMS SHALL BE OMITTED.'

THE CONTRACTING OFFICER REPORTS THAT WHEN EVALUATING BIDS ON ITEM NO. 21 HE SUSPECTED THAT THE LOW BID OF SEITZ AND GEORGE OFFICE EQUIPMENT CO. MIGHT NOT INCLUDE ADJUSTABLE MAGAZINE HOLDERS WITH THE RACKS AND, ON APRIL 16, 1959, HE DISPATCHED THE FOLLOWING TELEGRAM TO THE BIDDER:

"REGARDING IFB QM 33-031-59-585, ITEM 21. YOUR BID IS INTERPRETED THAT RACK INCLUDES 35 ADJUSTABLE MAGAZINE HOLDERS. REQUEST CONFIRMATION.'

IN REPLY, THE CONTRACTING OFFICER RECEIVING A TELEGRAM DATED APRIL 17, 1959, FROM THE BIDDER, AS FOLLOWS:

"REGARDING IFB-QM-33-031-59-585 ITEM 21 INCLUDES 35 ADJUSTABLE MAGAZINE HOLDERS.'

THEREAFTER, THE CONTRACTING OFFICER ACCEPTED THE SEITZ BID ON ITEM NO. 21, AT THE UNIT BID PRICE OF $125.27 AND A TOTAL PRICE OF $6,388.77 FOR 51 RACKS. AFTER THE AWARD, BY LETTER DATED JUNE 4, 1959, TO THE CONTRACTING OFFICER, THE PRESIDENT OF THE CONTRACTOR FIRM REFERRED TO THEIR DISCUSSION OF THE DAY BEFORE CONCERNING ITEM NO. 21, AND AGAIN STATED THAT THE TELEGRAPHICS CONFIRMATION ON APRIL 17, 1959, AS TO THAT ITEM BY ONE OF THE FIRM'S REPRESENTATIVES WAS IN ERROR, AND THAT HE SHOULD HAVE WIRED THAT THE BID WAS BASED UPON "FURNISHING OUR STANDARD NO. 460M RACK, AS LISTED IN OUR BID, WITHOUT THE OPTIONAL METAL HOLDERS.' THE FIRM'S PRESIDENT STATED ALSO THAT THE ADDITIONAL AMOUNT FOR 35 HOLDERS FOR EACH OF THE 51 RACKS WOULD BE $43.75 AND THAT WOULD GIVE A NEW UNIT PRICE OF $169.02. FURTHER STATED THAT THE ADDITIONAL COST OF $1.25 PER HOLDER, OR $43.75 PER RACK, REPRESENTS THE ACTUAL COST OF THESE OPTIONAL ITEMS WITH NO MARKUP WHATEVER, AND THAT THE TOTAL ACTUAL INCREASED COST FOR THE 51 RACKS WOULD BE $2,231.25. IN A LETTER DATED AUGUST 12, 1959, THE CONTRACTOR EXPLAINED HOW IT ARRIVED AT ITS ORIGINAL UNIT BID PRICE OF $125.27 (MANUFACTURER'S PRICE $110.24 PLUS MARKUP OF TEN PERCENT ($11.03) PLUS $4 EACH FOR EXPORT PACKING) FOR A QUANTITY OF 51 OF THE NO. 46OM MAGAZINE RACK WITHOUT THE OPTIONAL ADDITIONAL HOLDERS. IN SUPPORT OF ITS CLAIM OF ERROR CERTIFIED COPIES WERE FORWARDED OF THE FIRM'S WORKSHEETS ON WHICH ITS ORIGINAL BID PRICE WAS COMPUTED AND OF A LETTER DATED APRIL 9, 1959, FROM ITS SUPPLIER, THE MYRTLE DESK COMPANY, QUOTING A UNIT PRICE OF $110.24, F.O.B. FACTORY, FOR SUPPLYING A QUANTITY OF 51 OF ITS NO. 46OM STYLE RACK.

THE CONTRACTING OFFICER IN HIS REPORT DATED JULY 15, 1959, AND HIS SUPPLEMENTAL REPORT DATED AUGUST 14, 1959, CONCERNING, THE TRANSACTION STATES THAT, BASED ON THE PRESENT RECORD, IT IS NOW HIS VIEW THAT SEITZ AND GEORGE OFFICE EQUIPMENT CO. DID MAKE A MISTAKE IN THAT IT FAILED TO INCLUDE THE ADJUSTABLE MAGAZINE HOLDERS IN ITS ORIGINAL BID PRICE; HOWEVER, HE BELIEVES THAT, AFTER REQUESTING THE BIDDER TO CONFIRM ITS BID SPECIFICALLY AS TO WHETHER THE CONTRACTING OFFICER'S INTERPRETATION WAS CORRECT THAT THE COMPANY'S BID ON ITEM NO. 21 INCLUDED 35 ADJUSTABLE MAGAZINE HOLDERS AND IN VIEW OF THE CLARITY WITH WHICH THE COMPANY CONFIRMED ITS BID, HE WAS JUSTIFIED IN ASSUMING THE BID TO BE CORRECT. THEREFORE, THE CONTRACTING OFFICER RECOMMENDS THAT RELIEF BE DENIED TO THE CONTRACTOR.

THE GENERAL RULE IS THAT AWARD OF A CONTRACT FOLLOWING VERIFICATION OF A BID UPON REQUEST OF THE CONTRACTING OFFICER PRECLUDES ANY ASSUMPTION THAT THE CONTRACTING OFFICER ACTED IN BAD FAITH AND RESULTS IN A BINDING CONTRACT.

IN THE INSTANT CASE, THE SPECIFICATIONS WERE CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENT THAT 35 MAGAZINE HOLDERS WERE TO BE INCLUDED WITH EACH RACK. THE CONTRACTOR ALONE WAS RESPONSIBLE FOR THE PREPARATION OF ITS BID, AND ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID OR IN ITS CONFIRMATION THEREOF UPON REQUEST OF THE CONTRACTING OFFICER PRIOR TO ACCEPTANCE OF THE BID AND AWARD OF THE CONTRACT WAS DUE SOLELY TO ITS NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR WAS UNILATERAL AND NOT MUTUAL. THE RECORD ESTABLISHES THAT THE GOVERNMENT DID ALL THAT WAS REQUIRED OF IT TO ASCERTAIN THE CORRECTNESS OF THE BID WHEN SEITZ AND GEORGE OFFICE EQUIPMENT CO. WAS REQUESTED TO CONFIRM THAT ITS BID DID INCLUDE FURNISHING THE MAGAZINE HOLDERS AS CALLED FOR BY THE SPECIFICATIONS THAT THE CONTRACTING OFFICER CONSIDERED THE BID CORRECT AND PROPER FOR AWARD. HAD HE THEREAFTER NOT AWARDED THE CONTRACT TO SEITZ AND GEORGE OFFICE EQUIPMENT CO., AS THE LOWEST RESPONSIBLE BIDDER, HE WOULD HAVE BEEN DERELICT IN HIS DUTY TO THE GOVERNMENT. SEE OUR DECISION, B 139035, DATED APRIL 30, 1959, AND THE COURT CASES CITED THEREIN.

THE ACCEPTANCE, AFTER CONFIRMATION, OF THE BID ON ITEM NO. 21 OF SEITZ AND GEORGE OFFICE EQUIPMENT CO. WAS IN ENTIRE GOOD FAITH AND, NO ERROR HAVING BEEN ALLEGED PRIOR THERETO, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

IN THE CIRCUMSTANCES, NO LEGAL BASIS EXISTS FOR PAYMENT TO THE CONTRACTOR OF ANY AMOUNT IN ADDITION TO ITS BID PRICE FOR THE EQUIPMENT FURNISHED UNDER ITEM NO. 21 OF CONTRACT NO. O.I. 8649-59Q.