B-140596, SEP. 18, 1959

B-140596: Sep 18, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED AUGUST 26. TO HAVE BEEN MADE IN ITS BID SUBMITTED PURSUANT TO INVITATION NO. BIDS WERE REQUESTED. THE BID WAS ACCEPTED AND A CONTRACT AWARDED TO WEBSTER ON DECEMBER 12. STATING THAT IT HAD FAILED TO INCLUDE CHARGES OF $13.44 MBF FOR FREIGHT WHICH SHOULD HAVE MADE ITS BID READ $158.44 MBF INSTEAD OF $145 MBF F.O.B. BID AND THE NEXT LOWEST BIDDERS IS INSUFFICIENT TO HAVE BEEN APPARENT OR OBVIOUS AT TIME OF BID EVALUATION AND AWARD OF THE CONTRACT. AS EVIDENCED BY THE ABSTRACT OF BIDS FOR THE ITEMS ON WHICH THE MISTAKE WAS ALLEGED. A PRICE DIFFERENTIAL OF $15.00 TO $50.00 PER THOUSAND FEET BOARD MEASURE OR MORE IS NOT UNCOMMON FOR ITEMS OF CLEAR GRADE LUMBER.

B-140596, SEP. 18, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED AUGUST 26, 1959, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR ALLEGED BY WEBSTER LUMBER MILLS, INC., TO HAVE BEEN MADE IN ITS BID SUBMITTED PURSUANT TO INVITATION NO. ENG-35-026-59-113, ISSUED NOVEMBER 26, 1958, BY THE U.S. ARMY ENGINEER DISTRICT, PORTLAND, OREGON.

BY THE AFOREMENTIONED INVITATION, BIDS WERE REQUESTED--- TO BE OPENED DECEMBER 11, 1958--- FOR THE PURCHASE OF TWO ITEMS OF LUMBER FOR DELIVERY F.O.B. NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. IN RESPONSE THERETO, WEBSTER LUMBER MILLS, INC., SUBMITTED A BID OFFERING TO FURNISH THE TWO ITEMS AT A PRICE OF $145 PER FBM. THE BID WAS ACCEPTED AND A CONTRACT AWARDED TO WEBSTER ON DECEMBER 12, 1958.

AFTER RECEIPT OF THE NOTICE OF AWARD, THE CONTRACTOR, ON DECEMBER 16, 1958, NOTIFIED THE CONTRACTING OFFICER BY TELEPHONE THAT IT HAD MADE AN ERROR IN ITS BID. BY LETTER OF DECEMBER 18, 1958, THE CONTRACTOR CONFIRMED ITS ALLEGATION OF ERROR, STATING THAT IT HAD FAILED TO INCLUDE CHARGES OF $13.44 MBF FOR FREIGHT WHICH SHOULD HAVE MADE ITS BID READ $158.44 MBF INSTEAD OF $145 MBF F.O.B. DESTINATION.

IN A STATEMENT DATED DECEMBER 30, 1958, THE CONTRACTING OFFICER REPORTS THAT---

"3. THE DIFFERENCE IN PRICE BETWEEN WEBSTER LUMBER MILLS INC. BID AND THE NEXT LOWEST BIDDERS IS INSUFFICIENT TO HAVE BEEN APPARENT OR OBVIOUS AT TIME OF BID EVALUATION AND AWARD OF THE CONTRACT. AS EVIDENCED BY THE ABSTRACT OF BIDS FOR THE ITEMS ON WHICH THE MISTAKE WAS ALLEGED, A PRICE DIFFERENTIAL OF $15.00 TO $50.00 PER THOUSAND FEET BOARD MEASURE OR MORE IS NOT UNCOMMON FOR ITEMS OF CLEAR GRADE LUMBER. THE CONTRACTOR'S LETTER OF 18 DECEMBER 1958 INDICATES THAT AN ERROR MAY HAVE BEEN MADE; HOWEVER, THE DATA FURNISHED IS NOT CONSIDERED TO CONCLUSIVELY SUBSTANTIATE THAT AN ERROR WAS ACTUALLY MADE.'

IN 20 COMP. GEN. 652 IT IS STATED:

"THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKES ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362.'

IN THE INSTANT MATTER, IT IS CLEAR THAT SUCH ERROR AS MAY HAVE BEEN MADE WAS NOT MUTUAL AND, SINCE THE BID PRICE OF $145 MBF IS WITHIN A FEW DOLLARS OF THE GOVERNMENT'S REPORTED ESTIMATE OF $150 TO $170 PER MBF DELIVERED TO DESTINATION, THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. NEITHER WAS THE ALLEGED ERROR INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ACCORDINGLY, THE ESTABLISHED RULE ABOVE QUOTED IS FOR APPLICATION HERE. THE ACCEPTANCE OF THE BID CONSUMMATED A BINDING AND VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 55; 26 COMP. GEN. 415; 29 ID. 323.

IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING NO OFFICER OF THE GOVERNMENT HAS THE AUTHORITY TO GIVE AWAY OR SURRENDER A RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT. 14 COMP. GEN. 468; 20 ID. 703 AND COURT CASES CITED.

FOR THE REASONS ABOVE SET FORTH, THERE APPEARS NO VALID BASIS FOR ANY ADJUSTMENT IN THE CONTRACT PRICE.

WITH THE EXCEPTION OF THE TWO STATEMENTS OF THE CONTRACTING OFFICER, THE PAPERS ARE RETURNED.