B-141677, FEB. 19, 1960

B-141677: Feb 19, 1960

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 LETTER DATED JANUARY 8. TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF CONTRACT NO. WAS ACCEPTED ON AUGUST 27. IT IS REPORTED THAT ON OCTOBER 29. WHEREAS THE BID PRICE WAS BASED ON OIL-FILLED (FLAMMABLE) COOLING MEDIUM. THE CONTRACTOR CONFIRMED THE ALLEGED ERROR AND SUBMITTED EVIDENCE WHICH INDICATES THAT THE BID PRICE WOULD HAVE BEEN $1. 324 IF THE SECOND LOW BID RECEIVED IN RESPONSE TO THE INVITATION WAS AN ACCEPTABLE BID. THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID. WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENTS OF THE GOVERNMENT.

B-141677, FEB. 19, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JANUARY 8, 1960, FROM THE CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY STERLING RADIO PRODUCTS, INC., TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF CONTRACT NO. DA-41-184- AIV-314 DATED AUGUST 27, 1959.

BY INVITATION FOR BIDS NO. AIV-41-184-60-ENG-1, ISSUED ON JULY 10,1959, THE PURCHASING AND CONTRACTING OFFICE, CAMP WOLTERS, MINERAL WELLS, TEXAS, REQUESTED BIDS FOR FURNISHING THREE

"TRANSFORMERS 150 KVA PLATFORM MOUNTING, 7200/12400 Y--- 240/480 VOLT, W/STANDARD TAPS--- SINGLE PHASE--- 60 CYCLE, OUTDOOR, LIQUID COOLED WITH NON FLAMMABLE COOLING MEDIUM. ROOF TYPE PRIMARY BUSHINGS, STUD TYPE SECONDARY BUSHINGS COMPLETE WITH COOLING MEDIUM BUT WITHOUT HANGERS.'

IN RESPONSE TO THE INVITATION, STERLING RADIO PRODUCTS, INC., SUBMITTED A BID DATED JULY 24, 1959, OFFERING TO FURNISH TRANSFORMERS MANUFACTURED BY PRECISION TRANSFORMER CORPORATION, PER ATTACHED DESCRIPTION, FOR A PRICE OF $1,110 EACH, OR A TOTAL OF $3,330. THE FOUR OTHER BIDS RECEIVED QUOTED PRICES OF $1,324, $1,836, $1,836, AND $1,836.98, EACH. THE BID OF STERLING RADIO PRODUCTS, INC., BEING THE LOWEST RECEIVED, WAS ACCEPTED ON AUGUST 27, 1959.

IT IS REPORTED THAT ON OCTOBER 29, 1959, THE CONTRACTING OFFICER CALLED THE CONTRACTOR REQUESTING A DEFINITE DELIVERY DATE AND THAT DURING THE COURSE OF THE CONVERSATION THE CONTRACTOR'S MANAGER OF THE GOVERNMENT CONTRACT DIVISION NOTED THAT THE SPECIFICATIONS REQUIRED NON-FLAMMABLE LIQUID FOR COOLING, WHEREAS THE BID PRICE WAS BASED ON OIL-FILLED (FLAMMABLE) COOLING MEDIUM, AND STATED THAT HE HAD ORDERED THE LATTER TYPE FROM THE MANUFACTURER. HE ADVISED THAT THE TRANSFORMERS HAD BEEN SHIPPED BY THE MANUFACTURER ON OCTOBER 28, 1959, AND THAT HE WOULD ATTEMPT TO DIVERT THE SHIPMENT BACK TO THE FACTORY FOR CORRECTION. SUBSEQUENTLY, THE CONTRACTOR CONFIRMED THE ALLEGED ERROR AND SUBMITTED EVIDENCE WHICH INDICATES THAT THE BID PRICE WOULD HAVE BEEN $1,390 EACH BUT FOR THE ERROR. THE CONTRACTOR ALSO STATES THAT HE INCURRED ADDITIONAL COSTS IN HAVING THE TRANSFORMERS RETURNED TO THE MANUFACTURER FOR CORRECTION. THE CONTRACTOR REQUESTS THAT IT BE GRANTED AN INCREASE TO A PRICE OF $1,390 EACH, OR TO $1,324 IF THE SECOND LOW BID RECEIVED IN RESPONSE TO THE INVITATION WAS AN ACCEPTABLE BID. THE RECORD SHOWS THAT THE SECOND LOW BIDDER HAS CONFIRMED THAT HIS BID PRICE OF $1,324 COVERED A TRANSFORMER IN ACCORDANCE WITH THE REQUIREMENTS OF THE SPECIFICATION.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENTS OF THE GOVERNMENT. THE WORDS "NON FLAMMABLE" WERE UNDERLINED. THE DIFFERENCE BETWEEN THE LOW BID AND THE OTHER BIDS RECEIVED IS NOT SUFFICIENT IN AND OF ITSELF TO WARRANT CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE LOW BID. THUS, THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. IN THE CIRCUMSTANCES, IT MUST BE HELD THAT THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS DUE SOLELY TO THE NEGLIGENCE OR OVERSIGHT OF THE BIDDER, AND WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, AFFORDS NO BASIS FOR GRANTING RELIEF TO THE CONTRACTOR. SEE ODGEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; SALIGMAN V. UNITED STATES, 56 F.SUPP. 505.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR INCREASING, BY ANY AMOUNT, THE CONSIDERATION SPECIFIED IN CONTRACT NO. DA-41-184-AIV- 314 AWARDED TO STERLING RADIO PRODUCTS, NC., ON AUGUST 27, 1959.