B-142269, MAR. 24, 1960

B-142269, MAR. 24, 1960

TO LOUISIANA STEEL COMPRESS COMPANY, INC:

REFERENCE IS MADE TO A LETTER DATED MARCH 3, 1960, FROM THEO. CANGELONI, ESQ., REQUESTING RECONSIDERATION OF OFFICE SETTLEMENT DATED FEBRUARY 3, 1960, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF THE AMOUNT OF $1,353.98, REPRESENTING THE DIFFERENCE BETWEEN YOUR BID PRICE OF $1,386.66 UPON WHICH CONTRACT NO. AF 01/601/S-3679 DATED JUNE 9, 1959, WAS BASED, AND $32.68 WHICH YOU ALLEGEDLY INTENDED TO BID BUT FOR AN ERROR IN BID.

INVITATION FOR BIDS NO. G1-601-S-59-68 WAS ISSUED ON MAY 15, 1959, BY THE BATON ROUGE AIR FORCE STATION FOR THE SALE OF 43 ITEMS OF SURPLUS PROPERTY. ITEM 41 CONSISTED OF 3,440 UNITS OF "ARM ASSY, ROCKER INTAKE VALVE," DENOMINATED AS UNUSED HAVING A TOTAL COST OF $18,576 AND HAVING AN APPROXIMATE GROSS WEIGHT OF 3,200 POUNDS. ON JUNE 9, 1959, BIDS WERE OPENED AND IT APPEARED THAT YOU BID $0.4031 EACH ON ITEM 41 AND THE BERGMAN SUPPLY COMPANY BID $0.033 EACH FOR SUCH ITEM. INASMUCH AS YOU WERE THE HIGHEST BIDDER ON ITEM 41, AMONG OTHERS, YOU WERE AWARDED THE CONTRACT. ON JUNE 25, 1959, YOU ALLEGED ERROR AS TO ITEM 41 AND REQUESTED CORRECTION OF YOUR CONTRACT. IT WAS CONTENDED THAT YOU BASED YOUR BID ON A WEIGHT OF 31.4 POUNDS FOR EACH UNIT INSTEAD OF 3 1/4 POUNDS EACH AS INTENDED. ON SUCH BASIS YOU SHOULD HAVE BID $0.0095 EACH OR A TOTAL OF $32.68 FOR THE LOT. THE ERROR WAS EXPLAINED BY YOU IN LETTER OF JUNE 29, 1959, WHEREIN YOU SUBMITTED YOUR WORK SHEET IN SUPPORT OF YOUR ALLEGATION OF ERROR.

CONCEDING THE FACT THAT AN ERROR WAS MADE IN YOUR BID, WE ARE UNABLE TO CONCLUDE THAT YOUR CLAIM IS LEGALLY FOR ALLOWANCE. IN THE CIRCUMSTANCES OF THE INSTANT CASE, THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER YOU MADE AN ERROR IN YOUR BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE GOVERNMENT'S ACCEPTANCE OF YOUR 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. 905, 507; MOFFOTT, SODGKINS AND CLARINO COMPANY V. ROCHESTER, 178 U.S. 373.

HERE, NO ACTUAL OR CONSTRUCTIVE NOTICE OF YOUR UNILATERAL ERROR CAME TO THE GOVERNMENT'S ATTENTION BEFORE IT ACCEPTED THE BID. IN THIS REGARD, WHERE ONLY TWO VARIANT BIDS ARE RECEIVED, NO FAIR COMPARISON OF THE BIDS CAN BE MADE, SINCE THERE IS NOT MORE REASON FOR CONSIDERING THE HIGH BID TOO HIGH THAN THERE IS FOR CONSIDERING THE LOW BID TOO LOW. THUS, THERE IS NO BASIS FOR CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID. AS WAS STATED IN THE CASE OF UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 688, AFFIRMED 253 F.2D 956:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER. SALIGMAN V. UNITED STATES, SUPRA.

"AS STATED IN HYDE PARK CLOTHES V. UNITED STATES, 1949, 84 F.SUPP. 589, 592, 114 CT.CL. 424:

"* * * 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 OF THE FOREGOING AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF YOUR BID WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS YOURS ALONE. FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163.

ACCORDINGLY, THE SETTLEMENT OF FEBRUARY 3, 1960, IS SUSTAINED.

CONCERNING YOUR ATTORNEY'S REQUEST FOR INFORMATION AS TO THE USUAL APPEAL PROCEDURES IN THE EVENT WE SUSTAINED OUR PRIOR ACTION, YOU ARE ADVISED THAT THERE IS NO PROCEDURE PROVIDED BY LAW FOR APPEAL TO THE UNITED STATES COURTS FROM DECISIONS OF OUR OFFICE RENDERED UNDER 31 U.S.C. 71. HOWEVER, YOUR ATTENTION IS INVITED TO THE PROVISIONS OF 28 U.S.C. 1346 AND 1491 PERTAINING TO SUITS AGAINST THE UNITED STATES WHICH ARE COGNIZABLE IN THE DISTRICT COURTS AND THE COURT OF CLAIMS OF THE UNITED STATES.