B-141773, AUG. 17, 1960

B-141773, AUG. 17, 1960

TO RILEY, REED, MURPHY AND MCATEE:

BY LETTER DATED JULY 27, 1960, YOU REQUEST THAT WE RECONSIDER OUR DECISION OF FEBRUARY 9, 1960, WHEREIN WE HELD THAT THE ACCEPTANCE OF THE BID OF YOUNG AND GREENAWALT SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 14-34-59 RESULTED IN A VALID AND BINDING CONTRACT NOTWITHSTANDING THE ALLEGATION OF ERROR IN BID SUBSEQUENT TO AWARD OF THE CONTRACT.

THE BASIS OF YOUR REQUEST FOR RECONSIDERATION IS AS FOLLOWS:

"PARAGRAPH 8 OF THE SPECIAL CONDITIONS OF THE INVITATION PROVIDED "AWARD OF BID. AWARD OF THIS BID WILL BE MADE ON AN "ALL OR NONE" BASIS FOR EACH INDIVIDUAL ITEM. IF THE BIDDER WILL ACCEPT ONLY PART OF AN ITEM OR WILL ONLY ACCEPT THE COMPLETE BID (ALL ITEMS) ON AN "ALL OR NONE" BASIS, HE MUST SO INDICATE.' THROUGH AN UNFORTUNATE TYPOGRAPHICAL ERROR YOUNG AND GREENAWALT DID NOT INDICATE THEIR BID TO BE ON AN "ALL OR NONE" CONDITION.

"ON DECEMBER 16, 1959 O. G. BROWN, REGIONAL SUPPLY OFFICER, INDICATED IN HIS COMMUNICATION WITH YOU THAT IT WAS THE FEELING OF HIS OFFICE THAT YOUNG AND GREENAWALT DID INADVERTENTLY AND UNINTENTIONALLY OMIT THE CONDITION OF "ALL OR NONE" FROM THEIR BID AND RECOMMENDED THAT IF POSSIBLE THE CONTRACT BE RESCINDED WITH NO EXCESS COST BEING CHARGED TO YOUNG AND GREENAWALT.'

UPON REVIEW OF THE MATTER, WE ARE UNABLE TO CONCLUDE THAT THE AWARD AS MADE WAS LEGALLY DEFECTIVE BECAUSE OF THE BID ERROR ALLEGED AFTER AWARD. IN THE CIRCUMSTANCES OF THE INSTANT CASE, 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 GOVERNMENT'S ACCEPTANCE OF THE BID. THE RULE IS WELL SETTLED THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE OFFICER ACCEPTING THE BID WAS ON NOTICE--- EITHER ACTUAL OR CONSTRUCTIVE--- OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE SALIGMAN V. UNITED STATES, 56 F.SUPP. 505, 507; MOFFETT, HODGKINS AND CLARKE COMPANY V. ROCHESTER,178 U.S. 373. HERE, NO ACTUAL OR CONSTRUCTIVE NOTICE OF THE UNILATERAL ERROR CAME TO THE GOVERNMENT'S ATTENTION BEFORE IT ACCEPTED THE BID. IN THAT CONNECTION, IT WAS REPORTED TO OUR OFFICE BY THE DEPARTMENT OF AGRICULTURE THAT:

"THE CONTRACTING OFFICER MADE THE AWARD IN GOOD FAITH, AND EVEN AFTER THE CLAIM OF ERROR BY THE COMPANY HE DID NOT CONSIDER THE EVIDENCE WARRANTED RELEASE OF THE COMPANY FROM ITS CONTRACT. HOWEVER, IT WAS LATER NOTED THAT YUBA SOUTHWEST FABRICATORS AGREED TO FURNISH THE MATERIAL UNDER ITEM 1 ONLY AT A PRICE OF $540.00 ABOVE YOUNG AND GREENAWALT'S BID. THIS IS ALMOST IDENTICAL TO YOUNG AND GREENAWALT'S CLAIM THAT THEY WOULD LOSE $537.00 IF FORCED TO DELIVER ITEM 1 ONLY, AND STRONGLY SUPPORTS THEIR CLAIM OF ERROR. IT IS NOW THE CONTRACTING OFFICER'S OPINION THAT YOUNG AND GREENAWALT DID UNINTENTIONALLY OMIT STATING THEIR BID WAS SUBJECT TO AWARD OF ALL OR NONE, * * *.'

HENCE, IT MAY NOT BE SAID THAT THE CONTRACTING OFFICER WAS ON NOTICE, ACTUAL OR CONSTRUCTIVE, PRIOR TO AWARD, OF THE POSSIBILITY OF ERROR IN THE BID. AS WAS STATED IN HYDE PARK CLOTHES V. UNITED STATES, 84 F.SUPP. 589, 592:

"* * * THERE IS NOTHING IN THE CIRCUMSTANCES OF THIS CASE INDICATING THAT THE GOVERNMENT EITHER KNEW OR HAD REASON TO KNOW THAT THE BIDDER HAD MADE A MISTAKE. THERE WAS NO FRAUD OR CONCEALMENT ON THE PART OF THE GOVERNMENT, THE CONTRACT WAS VALID ON ITS FACE * * *.'

IN VIEW THEREOF, AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID--- WHICH WAS REGULAR ON ITS FACE--- WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.