B-141491, DEC. 31, 1959

B-141491: Dec 31, 1959

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 11. OUR DECISION WAS REQUESTED AS TO WHETHER THE REQUESTED RELIEF MAY BE GRANTED IN THIS CASE. THE INVITATIONS WERE ISSUED TO FORTY PROSPECTIVE BIDDERS AND 43 BIDS WERE RECEIVED. THERE WERE OTHER LOW BIDS AT THE UNIT PRICES OF $0.38. A CONTRACT WAS AWARDED TO ESTRICH AND COMPANY ON THE BASIS THAT THAT CONCERN WAS THE LOWEST BIDDER. IT IS REPORTED IN THE LETTER OF DECEMBER 11. THE CONTRACTING OFFICER STATED THAT THE FILE REVEALS NO REQUEST FOR CONFIRMATION OF THE BID AND THAT IT IS DOUBTFUL THERE WAS ANY SUCH REQUEST. THE CONTRACTING OFFICER EXPRESSED THE OPINION THAT THE ALLEGED MISTAKE WAS PURELY A UNILATERAL ONE ON THE PART OF THE CONTRACTOR.

B-141491, DEC. 31, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 11, 1959, WITH ENCLOSURES, FROM COLONEL CHARLES A. SANFORD, CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, RELATING TO A MISTAKE IN BID ALLEGED BY ESTRICH AND COMPANY, PHILADELPHIA, PENNSYLVANIA, UNDER CONTRACT NO. DA-01-021-ORD 11047, DATED OCTOBER 27, 1958, ISSUED BY THE U.S. ARMY ORDNANCE MISSILE COMMAND, ARMY ROCKET AND GUIDED MISSILE AGENCY, REDSTONE ARSENAL, ALABAMA. OUR DECISION WAS REQUESTED AS TO WHETHER THE REQUESTED RELIEF MAY BE GRANTED IN THIS CASE.

THE RECORD SHOWS THAT BY INVITATION FOR BIDS NO. IDP-X-ORD-01-021-59 10075, DATED SEPTEMBER 19, 1958, THE ARMY ROCKET AND GUIDED MISSILE AGENCY REQUESTED BIDS--- TO BE OPENED ON OCTOBER 20, 1958--- FOR FURNISHING 4,623 EACH STUD, MAIN FIN FED STK NR 1420-535-6982 (Y077). THE INVITATIONS WERE ISSUED TO FORTY PROSPECTIVE BIDDERS AND 43 BIDS WERE RECEIVED, THE LOWEST BEING THAT SUBMITTED BY ESTRICH AND COMPANY AT A UNIT PRICE OF $0.341, OR FOR A TOTAL OF $1,576.44. THERE WERE OTHER LOW BIDS AT THE UNIT PRICES OF $0.38, $0.52, $0.57, AND $0.59. UNDER DATE OF OCTOBER 27, 1958, A CONTRACT WAS AWARDED TO ESTRICH AND COMPANY ON THE BASIS THAT THAT CONCERN WAS THE LOWEST BIDDER.

THE RECORD SHOWS FURTHER THAT BY LETTER OF OCTOBER 29, 1958, THE CONTRACTOR ADVISED THAT IT HAD MADE A MISTAKE IN ITS BID BY OMITTING THE COST OF MATERIAL WHICH IT COMPUTED AT $0.143 PER UNIT, AND REQUESTED PERMISSION TO WITHDRAW ITS BID. BY LETTER OF NOVEMBER 4, 1958, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT AWARD OF THE CONTRACT HAD BEEN MADE BY LETTER OF OCTOBER 27, 1958, AND THAT PERFORMANCE THEREUNDER WOULD BE REQUIRED. IT IS REPORTED IN THE LETTER OF DECEMBER 11, 1959, THAT PERFORMANCE UNDER THIS CONTRACT HAS BEEN COMPLETED AND THAT THE CONTRACTOR HAS BEEN PAID ALL BUT $552.72 OF THE CONTRACT PRICE.

IN A COMMUNICATION DATED APRIL 20, 1959, THE CONTRACTING OFFICER STATED THAT THE FILE REVEALS NO REQUEST FOR CONFIRMATION OF THE BID AND THAT IT IS DOUBTFUL THERE WAS ANY SUCH REQUEST, DUE TO THE NARROW SPREAD IN THE BIDS RECEIVED. THE CONTRACTING OFFICER EXPRESSED THE OPINION THAT THE ALLEGED MISTAKE WAS PURELY A UNILATERAL ONE ON THE PART OF THE CONTRACTOR, AND THAT THE GOVERNMENT, NOT HAVING ACTUAL OR CONSTRUCTIVE NOTICE OF A POSSIBLE MISTAKE, CONTRIBUTED IN NO WAY TO ANY HARDSHIP CREATED BY THE MISTAKE. THEREFORE, THE CONTRACTING OFFICER RECOMMENDED THAT RELIEF NOT BE GRANTED IN THIS CASE, IT BEING POINTED OUT BY HIM THAT IF THE REQUESTED RELIEF IS GRANTED IT WOULD INCREASE THE CONTRACT PRICE TO A POINT WHERE IT WOULD BE HIGHER THAN THAT SUBMITTED BY THE NEXT LOWEST BIDDER.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE INVITATION ISSUED IN THE PRESENT CASE WAS CLEAR AND UNAMBIGUOUS AS TO THE NEEDS OF THE GOVERNMENT. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND THEREFORE DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 103 C.CLS. 249, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505. SEE, ALSO, 20 COMP. GEN. 652, AND 26 ID. 415.

THE PRESENT RECORD APPEARS TO CLEARLY ESTABLISH THAT THE ACCEPTANCE OF THE BID IN THIS CASE WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD--- AND IN SUCH CIRCUMSTANCES, 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.

UPON ACCEPTANCE OF THE BID IN THIS CASE, THE RIGHT VESTED IN THE GOVERNMENT TO RECEIVE PERFORMANCE STRICTLY IN ACCORDANCE WITH ITS TERMS, AND, IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER THAT RIGHT WITHOUT ADEQUATE CONSIDERATION. SEE UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.ID. 141, CERTIORARI DENIED, 280 U.S. 574.

ACCORDINGLY, WE CONCLUDE THAT ON THE BASIS OF THE PRESENT RECORD THERE APPEARS TO BE NO LEGAL BASIS FOR INCREASING THE CONSIDERATION SPECIFIED IN THE INSTANT CONTRACT.