B-141557, JAN. 11, 1960

B-141557: Jan 11, 1960

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER OF DECEMBER 22. FOURTEEN BIDS WERE RECEIVED ON ITEM NO. 1. WAS ISSUED TO THE CORPORATION. THEREAFTER A PARTIAL REFUND OF ITS BID DEPOSIT WAS MADE AND THE BALANCE OF $116. EQUAL TO 20 PERCENT OF THE PURCHASE (BID) PRICE WAS RETAINED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 18 OF THE GENERAL SALES TERMS AND CONDITIONS MADE A PART OF THE CONTRACT. THE REQUEST FOR RELIEF WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE TENDING TO SHOW HOW THE MISTAKE WAS MADE. WHICH WAS REGULAR ON ITS FACE. WAS ACCEPTED IN GOOD FAITH WITHOUT KNOWLEDGE OF ERROR. SINCE THE ITEM WAS NOT SCRAP MATERIAL THE DIFFERENCE BETWEEN THE BIDS RECEIVED WAS NOT SUFFICIENTLY GREAT TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE KNOWLEDGE OF THE MISTAKE NOW ALLEGED TO HAVE BEEN MADE.

B-141557, JAN. 11, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER OF DECEMBER 22, 1959, WITH ENCLOSURES, FILE R11.2 L8) L8/NT4-28, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO WHETHER THE DUMONT MANUFACTURING CORPORATION, SAN RAFAEL, CALIFORNIA, SHOULD BE DENIED THE RELIEF IT REQUESTED IN CONNECTION WITH THE PERFORMANCE OF CONTRACT N228S- 42532, DATED OCTOBER 2, 1959.

BY INVITATION NO. B-60-60-228, THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, SOUGHT OFFERS TO PURCHASE CERTAIN SURPLUS PROPERTY, IDENTIFIED AS MACHINE TOOLS. FOURTEEN BIDS WERE RECEIVED ON ITEM NO. 1, RANGING FROM $87.99 TO THE HIGH BID OF $580 SUBMITTED BY THE ABOVE NAMED CORPORATION. UNDER DATE OF OCTOBER 2, 1959, AWARD OF CONTRACT NO. N228S-42532, WAS ISSUED TO THE CORPORATION, AND THEREAFTER A PARTIAL REFUND OF ITS BID DEPOSIT WAS MADE AND THE BALANCE OF $116, EQUAL TO 20 PERCENT OF THE PURCHASE (BID) PRICE WAS RETAINED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 18 OF THE GENERAL SALES TERMS AND CONDITIONS MADE A PART OF THE CONTRACT.

BY LETTER DATED OCTOBER 16, 1959, THE PURCHASER ALLEGED THAT IT HAD INTENDED TO BID ON ITEMS NOS. 2 AND 3, INSTEAD OF ITEMS NOS. 1 AND 2, AS SET FORTH IN ITS PROPOSAL. THE REQUEST FOR RELIEF WAS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE TENDING TO SHOW HOW THE MISTAKE WAS MADE. THE CONTRACTOR FURTHER STATED THAT IT HAS NO USE FOR THE LATHE PURCHASED UNDER ITEM NO. 1 AND REQUESTED THAT ITS CONTRACT BE CANCELLED AND ITS DEPOSIT BE REFUNDED.

THE REFERRED-TO PARAGRAPH 18 OF THE CONTRACT PROVIDES THAT IF THE PURCHASER FAILS TO PAY THE BALANCE OF THE PURCHASE PRICE AND REMOVE THE GOODS PURCHASED, THE GOVERNMENT MAY ELECT TO RETAIN THE MATERIAL, AND ASSESS AS LIQUIDATED DAMAGES, A SUM EQUAL TO 20 PERCENT OF THE PURCHASE (BID) PRICE. THE CLAIMANT'S BID, WHICH WAS REGULAR ON ITS FACE, WAS ACCEPTED IN GOOD FAITH WITHOUT KNOWLEDGE OF ERROR, AND SINCE THE ITEM WAS NOT SCRAP MATERIAL THE DIFFERENCE BETWEEN THE BIDS RECEIVED WAS NOT SUFFICIENTLY GREAT TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE KNOWLEDGE OF THE MISTAKE NOW ALLEGED TO HAVE BEEN MADE. CLEARLY, THE ERROR WAS DUE TO THE NEGLIGENCE OR CARELESSNESS OF THE BIDDER AND WAS IN NO WAY INDUCED BY THE GOVERNMENT.

SINCE THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD, THE ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS OF THE PARTIES. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313. UNILATERAL MISTAKES AFFORD NO LEGAL BASIS FOR THE GRANTING OF ANY REDRESS. OGDEN AND DOUGHERTY V. UNITED STATES, 192 C.CLS. 249. ACCORDINGLY, WE ARE COMPELLED UNDER THE LAW TO DENY THE BIDDER'S REQUEST.

IN THE CIRCUMSTANCES, THE PURCHASER SHOULD BE CALLED UPON TO REMOVE THE PROPERTY IN ACCORDANCE WITH THE TERMS OF THE PURCHASE. IN THE EVENT OF DEFAULT THE GOVERNMENT'S RIGHTS AS SET FORTH IN PARAGRAPH 18 OF THE CONTRACT SHOULD BE INVOKED.