B-140619, SEP. 11, 1959
Highlights
TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED AUGUST 28. IS BASED. THE OTHER BIDS RECEIVED WERE $378. THE LOW BID OF $378 SUBMITTED BY THE HAJOCA CORPORATION WAS REJECTED BY THE CONTRACTING OFFICER BECAUSE THE BID WAS SIGNED BY THE CHIEF CLERK INSTEAD OF THE MANAGER OF THE COMPANY. WAS ACCEPTED APRIL 22. NOLAND'S BID WAS BASED ON A PRICE QUOTED TO IT BY THE ARMSTRONG FURNACE COMPANY. ERROR WAS NOT APPARENT ON THE FACE OF THE BID. SINCE THE LOWER BID WAS RECEIVED THERE APPEARS NO REASON TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID. IT FOLLOWS THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS IN GOOD FAITH. THAT IS A MATTER WHICH DOES NOT INVOLVE THE GOVERNMENT AND THE CONTRACTOR MUST ASSUME THE CONSEQUENCES OF THE ERROR OR LOOK TO ITS SUPPLIER FOR ADJUSTMENT IN THIS MATTER. 6 COMP.
B-140619, SEP. 11, 1959
TO THE SECRETARY OF THE ARMY:
REFERENCE IS MADE TO A LETTER DATED AUGUST 28, 1959, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR NOLAND COMPANY, INC., ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT (OFFICE IDENTIFICATION NUMBER 44), DATED APRIL 22, 1959, IS BASED.
BY INVITATION NO. 09-057-59-47, ISSUED MARCH 9, 1959, THE PURCHASING AND CONTRACTING OFFICE, FORT GORDON, GEORGIA, REQUESTED BIDS, TO BE OPENED APRIL 15, 1959, FOR THE FURNISHING OF FORCED WARM AIR FURNACES, COMPLETE WITH FAN. NOLAND COMPANY, INC., OFFERED TO SUPPLY THE FURNACES FOR $411.70 PER UNIT. THE OTHER BIDS RECEIVED WERE $378, $596, $611 AND $806 PER UNIT. THE LOW BID OF $378 SUBMITTED BY THE HAJOCA CORPORATION WAS REJECTED BY THE CONTRACTING OFFICER BECAUSE THE BID WAS SIGNED BY THE CHIEF CLERK INSTEAD OF THE MANAGER OF THE COMPANY. THEREFORE, THE NEXT LOW BID OF NOLAND COMPANY, INC., WAS ACCEPTED APRIL 22, 1959.
NOLAND'S BID WAS BASED ON A PRICE QUOTED TO IT BY THE ARMSTRONG FURNACE COMPANY. AFTER OPENING OF BIDS AND AWARD OF CONTRACT, ARMSTRONG ADVISED NOLAND BY TELEGRAM THAT THE PRICE PREVIOUSLY QUOTED DID NOT INCLUDE THE BLOWER AND THAT THERE WOULD BE AN ADDITIONAL CHARGE OF $194 FOR EACH BLOWER. ON MAY 11, 1959, NOLAND ADVISED THE CONTRACTING OFFICER OF THE ERROR AND REQUESTED THAT THEIR CONTRACT PRICE BE INCREASED FROM $411.70 TO $605.70 FOR EACH UNIT.
THE CONTRACTING OFFICER STATES IN EFFECT THAT HE HAD NO REASON TO SUSPECT ANY ERROR IN THE BID AT THE TIME OF AWARD. ERROR WAS NOT APPARENT ON THE FACE OF THE BID, AND SINCE THE LOWER BID WAS RECEIVED THERE APPEARS NO REASON TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID. IT FOLLOWS THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS IN GOOD FAITH--- NO ERROR HAVING PREVIOUSLY BEEN ALLEGED --- AND THAT THIS CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS 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.
IF THE CONTRACTOR SUBMITTED A BID BASED UPON AN ERRONEOUS QUOTATION FROM ITS SUPPLIER, THAT IS A MATTER WHICH DOES NOT INVOLVE THE GOVERNMENT AND THE CONTRACTOR MUST ASSUME THE CONSEQUENCES OF THE ERROR OR LOOK TO ITS SUPPLIER FOR ADJUSTMENT IN THIS MATTER. 6 COMP. GEN. 504; 18 ID. 28.
SINCE THE ERROR UPON WHICH THE REQUEST FOR RELIEF IS BASED WAS UNILATERAL, NOT MUTUAL, AND THE BID WAS ACCEPTED IN GOOD FAITH WITHOUT NOTICE OF ANY DEFECT IN THE BID, THE CONTRACTOR IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATIONS UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. ..END :