B-141134, DEC. 10, 1959

B-141134: Dec 10, 1959

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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 20. THE AMOUNT STATED TO BE DUE BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID ON WHICH CONTRACT NO. AF 25/600/-1080 WAS AWARDED. YOUR BID WAS ACCEPTED ON JUNE 11. THE RECORD INDICATES THAT BY LETTER WHICH WAS RECEIVED ON JULY 14. YOUR CLAIM FOR RELIEF WAS CONSIDERED UNDER THE PROVISIONS OF PUBLIC LAW 85-804. IT WAS ADMINISTRATIVELY DETERMINED THAT THE EVIDENCE FAILED TO SUPPORT A FINDING OF MUTUAL MISTAKE AND. YOU REQUESTED THAT YOU BE REIMBURSED THE AMOUNT OF THE ACTUAL FREIGHT CHARGES AND YOUR CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION FOR THE REASON THAT "THE PRICE QUOTED BY YOU WAS IN LINE WITH THE OTHER BIDS RECEIVED AND THE CONTRACTING OFFICER HAD NO REASON TO DOUBT THE CORRECTNESS OF THE BID.'.

B-141134, DEC. 10, 1959

TO MOORE BUSINESS FORMS, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 20, 1959, REQUESTING REVIEW OF SETTLEMENT DATED OCTOBER 5, 1959, WHICH DISALLOWED YOUR CLAIM FOR $1,442.20, THE AMOUNT STATED TO BE DUE BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID ON WHICH CONTRACT NO. AF 25/600/-1080 WAS AWARDED.

THE BASE PROCUREMENT OFFICE, OFFUTT AIR FORCE BASE, NEBRASKA, BY INVITATION NO. IFB 25-600-58-90 REQUESTED BIDS FOR FURNISHING, F.O.B. DESTINATIONS, 78,000 PADS OF SAC FORM 322, SPECIALIST JOB RECORD. RESPONSE YOU SUBMITTED A BID DATED JUNE 5, 1958, OFFERING TO FURNISH THE FORMS AT A PRICE OF $126 PER THOUSAND OR FOR A TOTAL PRICE OF $9,828. YOUR BID WAS ACCEPTED ON JUNE 11, 1958.

THE RECORD INDICATES THAT BY LETTER WHICH WAS RECEIVED ON JULY 14, 1958, YOU ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN YOUR BID IN THAT YOU HAD FAILED TO INCLUDE IN YOUR BID PRICE THE TRANSPORTATION CHARGES ON THE FORMS; AND THAT YOUR COST CLERK HAD PRICED THE ARTICLE F.O.B. ORIGIN, GREEN BAY, WISCONSIN, RATHER THAN F.O.B. DESTINATIONS, AS REQUIRED. YOU STATED THAT YOU HAD ESTIMATED THAT THE FREIGHT CHARGES ON THE FORMS WOULD BE $1,739.40. YOUR CLAIM FOR RELIEF WAS CONSIDERED UNDER THE PROVISIONS OF PUBLIC LAW 85-804, APPROVED AUGUST 28, 1958, AND IN MEMORANDUM OF DECISION DATED MARCH 20, 1059, IT WAS ADMINISTRATIVELY DETERMINED THAT THE EVIDENCE FAILED TO SUPPORT A FINDING OF MUTUAL MISTAKE AND, CONSEQUENTLY, RELIEF IN THE AMOUNT OF $1,442.20--- THE AMOUNT OF THE ACTUAL FREIGHT CHARGES--- COULD NOT BE GRANTED TO YOU.

IN A LETTER DATED APRIL 6, 1959, TO OUR OFFICE, YOU REQUESTED THAT YOU BE REIMBURSED THE AMOUNT OF THE ACTUAL FREIGHT CHARGES AND YOUR CLAIM WAS DISALLOWED BY OUR CLAIMS DIVISION FOR THE REASON THAT "THE PRICE QUOTED BY YOU WAS IN LINE WITH THE OTHER BIDS RECEIVED AND THE CONTRACTING OFFICER HAD NO REASON TO DOUBT THE CORRECTNESS OF THE BID.'

IT APPEARS TO BE YOUR CONTENTION THAT YOUR BID WAS DEFINITELY OUT OF LINE WITH THE OTHER BIDS SUBMITTED SO AS TO CONSTITUTE CONSTRUCTIVE NOTICE TO THE CONTRACTING OFFICER OF THE PROBABILITY OF ERROR.

THERE WAS NOTHING ON THE FACE OF YOUR BID TO INDICATE THAT IT WAS OTHER THAN AS INTENDED. THE CONTRACTING OFFICER HAS REPORTED THAT HE HAD NO REASON TO SUSPECT AN ERROR IN YOUR BID BECAUSE THE PRICE PREVIOUSLY PAID FOR SIMILAR FORMS HAD BEEN PROGRESSIVELY DECREASING IN THE LAST FIVE PROCUREMENTS COVERING A PERIOD OF EIGHTEEN MONTHS. THE LAST PROCUREMENT OF THE FORMS IN QUESTION WAS MADE AT A PRICE OF $167.40 PER THOUSAND. IS NOTED FROM THE ABSTRACT OF BIDS FOR THE SUBJECT INVITATION THAT EACH OF THE NEXT TWO LOWEST BIDDERS ON THE FORMS QUOTED A PRICE LOWER THAN THE PRICE PAID FOR THE LAST PROCUREMENT OF THE FORMS. THUS, THE ACTION OF THOSE TWO BIDDERS TENDS TO SHOW A DOWNWARD TREND IN THE PRICE OF THE FORMS. IN VIEW OF THE FOREGOING, THERE WOULD APPEAR NO BASIS FOR ASSUMING THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN PLACED ON NOTICE OF A PROBABLE ERROR IN YOUR BID. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF YOUR BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED BY YOU UNTIL AFTER AWARD. THE ACCEPTANCE OF YOUR BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 249 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON YOU. AS STATED BY THE COURT OF CLAIMS OF THE UNITED STATES IN THE CASE OF FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163:

"* * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IF THEY FAIL TO DO SO, AS PLAINTIFF DID IN THIS CASE, THE GOVERNMENT CANNOT FOR THAT REASON BE HELD FOR THE RESULTING LOSS.'

SUCH ERROR AS WAS MADE IN YOUR BID WAS DUE SOLELY TO YOUR OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN YOUR BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE YOU TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507, WHEREIN THE COURT SAID:

"* * * ORDINARILY NO RELIEF WILL BE GRANTED TO A PARTY TO AN EXECUTORY CONTRACT IN THE CASE OF A UNILATERAL MISTAKE. IN SUCH CASE WHEN A BID HAS BEEN ACCEPTED THE BIDDER WHO HAS MADE A MISTAKE WILL BE BOUND AND MUST BEAR THE CONSEQUENCES THEREOF.'

IN YOUR LETTER REQUESTING REVIEW YOU STATE THAT IN VIEW OF OUR DECISION IN A RECENT CASE INVOLVING A MISTAKE ALLEGED BY THE MCGREGOR CARBON FORMS COMPANY YOU SHOULD BE GRANTED THE RELIEF REQUESTED. YOU POINT OUT THAT THERE WAS A DIFFERENCE OF 19 PERCENT BETWEEN YOUR BID AND THE NEXT LOWEST BID ON THE FORMS AND THAT IN THE MCGREGOR CARBON FORMS COMPANY CASE, IN WHICH RELIEF WAS GRANTED, THE DIFFERENCE BETWEEN THE TWO LOWEST BIDDERS WAS 18.6 PERCENT. IN THAT REGARD, YOU ARE ADVISED THAT OUR OFFICE HAS NEVER ADOPTED OR FOLLOWED ANY PERCENTAGE FORMULA FOR DETERMINING WHETHER A BID IS SO FAR OUT OF LINE WITH OTHERS AS TO CONSTITUTE CONSTRUCTIVE NOTICE OF PROBABLE ERROR. OUR RECORDS SHOW THAT THE MCGREGOR CARBON FORMS COMPANY WAS GRANTED RELIEF, TO THE EXTENT OF CANCELLATION OF THE AWARD, BECAUSE OF AN ERROR MADE IN ITS BID TO THE UNITED STATES GOVERNMENT PRINTING OFFICE UNDER JACKET NO. 523663, COVERING THE PRODUCTION OF 1,000,000 COPIES OF A CERTAIN FORM. IN THAT CASE--- DECISION OF OCTOBER 8, 1959, B-140892, TO THE PUBLIC PRINTER--- THE CONTRACTING OFFICER ADMITTED THAT HAD HE TAKEN THE TIME TO PROPERLY EVALUATE THE BIDS RECEIVED ON THE FORMS, HE WOULD HAVE QUESTIONED THE PRICE QUOTED BY THE MCGREGOR CARBON FORMS COMPANY IN ITS BID PRIOR TO ACCEPTANCE. HERE THE SITUATION IS ENTIRELY DIFFERENT IN THAT THE CONTRACTING OFFICER DID TAKE THE TIME TO REVIEW THE PROCUREMENT HISTORY OF THE ITEM BEING PROCURED SO THAT HE COULD PROPERLY EVALUATE THE BIDS RECEIVED UNDER THE SUBJECT INVITATION.