B-142895, JUN. 7, 1960

B-142895, JUN. 7, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MAY 11, 1960, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE KEYSTONE BOLT AND NUT CORP. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA- 28-024-ORD.6368 IS BASED.

THE HARITAN ARSENAL, METUCHEN, NEW JERSEY, BY INVITATION NO. ORD-28 024- 60-322, REQUESTED BIDS FOR FURNISHING CERTAIN HARDWARE ITEMS UNDER ITEMS 1 THROUGH 9, INCLUSIVE. IN RESPONSE THE KEYSTONE BOLT AND NUT CORP. SUBMITTED A BID DATED FEBRUARY 15, 1960, IN PART, AS FOLLOWS:

CHART "ITEM NO. SUPPLIES OR SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

2 FSN 5340-550-1435

ORDNANCE PART NUMBER MS35692-2204

NUT, SLOTTED, HEXAGON, STEEL, 1-3/8-60:D-2B,

3-1/16 INCH WIDTH, 1-11/64 INCH THICKNESS

FEDERAL SPECIFICATION FF-N-836 (9/16/55)

GROUP B, TYPE I, STYLE 3

MILITARY STANDARD MS35692 (3/12/56)

(SHEET 1 AND 3)

31.53 850.50

LEVEL B 2,700 MACH -----------------------

F.O.B. DESTINATION C"

THE BID OF THE KEYSTONE BELT AND NUT CORP. WAS ACCEPTED AS TO ITEM 2 ON MARCH 16, 1960.

BY LETTER DATED MARCH 31, 1960, THE KEYSTONE BELT AND NUT CORP. ADVISED THAT IT HAD MADE AN ERROR IN ITS BID ON ITEM 2 IN THAT IT HAD BASED ITS BID PRICE ON THE STEEL NUT BEING MANUFACTURED OF GRADE 1 OR GRADE 2 STEEL, RATHER THAN GRADE 5 STEEL, AS REQUIRED; AND THAT THE CORRECT PRICE FOR THE GRADE 5 STEEL NUT IS $115.73 PER HUNDRED. IN ITS LETTER, IN WHICH IT REQUESTED CANCELLATION OF THE CONTRACT, THE CORPORATION STATED THAT WHEN IT QUOTED ON THE STEEL NUTS IT CHECKED THE DIMENSIONS AND FOUND THAT THEY WERE STANDARD, AND THEREBY ITS QUOTATION WAS BASED ON A COMMERCIAL STEEL NUT MANUFACTURED OF GRADE 1 OR 2 STEEL. WITH ITS LETTER THE CORPORATION SUBMITTED A PHOTOSTATIC COPY OF A QUOTATION DATED MARCH 24, 1960, RECEIVED FROM ITS SUPPLIER, AUTOMATIC SCREW MACHINE PRODUCTS CO., IN WHICH THE CORPORATION WAS QUOTED A PRICE OF $97.04/C FOR THE QUANTITY OF 2,700 EACH MS35692-2204- - THE PART REQUIRED BY THE SPECIFICATIONS. IN A LETTER DATED APRIL 13, 1960, THE CORPORATION STATED THAT IT HAD NOT RECEIVED SHEET 3 OF MILITARY STANDARD MS35692 WITH THE BID INVITATION AND THAT ITS BID WAS BASED SOLELY ON THE INFORMATION CONTAINED ON SHEET 1 OF SUCH MILITARY STANDARD FROM WHICH IT ASSUMED THAT A STEEL NUT MANUFACTURED OF GRADE 3 STEEL WAS REQUIRED. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS ORIGINAL WORKSHEET, WHICH APPEARS TO BE PAGE 2 OF THE INVITATION AND A PRICE LIST OF THE MANUFACTURER WHO WAS GOING TO FURNISH THE STANDARD NUT ON WHICH ITS BID PRICE WAS BASED.

THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT THE STEEL NUTS TO BE FURNISHED WERE TO BE IN ACCORDANCE WITH MILITARY STANDARD MS35692, SHEETS 1 AND 3, AND IT INDICATED THAT THE ORDNANCE PART NUMBER WAS MS35692-2204. SHEET 3 OF THE MILITARY STANDARD INDICATED THAT THE REFERRED-TO ORDNANCE PART NUMBER COVERED A STEEL NUT MANUFACTURED OF GRADE 5 STEEL. ALTHOUGH THE CORPORATION CONTENDS THAT IT WAS NOT FURNISHED SHEET 3 OF THE MILITARY STANDARD, IT IS OF LITTLE CONSEQUENCE WHETHER SUCH SHEET WAS ATTACHED TO THE INVITATION TO BID. WHILE THE CORPORATION CONTENDS ITS BID WAS SUBMITTED ON THE BASIS OF THE STEEL NUT BEING MANUFACTURED OF GRADE 1 OR GRADE 2 STEEL, NOTHING WAS INSERTED IN THE BID, OR OTHERWISE SHOWN AT THE TIME THE BID WAS SUBMITTED, TO INDICATE SUCH AN INTENTION. CONSEQUENTLY, IT WAS TO BE ASSUMED THAT THE BID WAS SUBMITTED ON THE BASIS OF FURNISHING STEEL NUTS CONFORMING TO THE REQUIREMENTS OF THE SPECIFICATIONS REFERRED TO THEREIN, AND IT APPEARS THAT THE BID WAS ACCEPTED ON THAT BASIS. IT IS CLEAR THAT ANY ERROR MADE BY THE CORPORATION IN ITS BID WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND THEREFORE DOES NOT ENTITLE THE CORPORATION TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN ET AL V. UNITED STATES, 56 F.SUPP. 505, 507. ALSO, SEE 20 COMP. GEN. 652; 27 ID. 718; ID. 724.

IT IS REPORTED THAT THE FOUR OTHER BIDS ON ITEM 2, ON THE BASIS OF A PRICE PER HUNDRED, WERE IN THE AMOUNTS OF $70, $108, $129.70, AND $160, AND IT IS REPORTED THAT THE STEEL NUTS COVERED BY ITEM 2 WERE PREVIOUSLY PROCURED AT A PRICE OF $30.68 PER HUNDRED--- $0.82 LESS THAN THE PRICE QUOTED BY THE CORPORATION. THE CONTRACTING OFFICER REPORTS THAT HE WAS NOT AWARE OF THE POSSIBILITY OF ERROR PRIOR TO AWARD AND IN VIEW OF THE WIDE RANGE OF BIDS RECEIVED AND THE PRICE PREVIOUSLY PAID FOR THAT ITEM, WE FIND NO BASIS FOR CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF ERROR. SO FAR AS THE PRESENT RECORD SHOWS THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE CORPORATION UNTIL AFTER AWARD. ALTHOUGH, AFTER AWARD, THE CORPORATION FURNISHED CERTAIN DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE CORPORATION IN COMPUTING ITS BID PRICE. THE ACCEPTANCE OF THE BID, IN THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313; AND AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD, THERE APPEARS NO LEGAL BASIS FOR RELIEVING THE KEYSTONE BOLT AND NUT CORP. FROM LIABILITY FOR FURNISHING THE TYPE OF STEEL NUTS REQUIRED BY THE SPECIFICATIONS AT ITS BID PRICE, OR FOR INCREASING THE CONSIDERATION THEREFOR.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT DATED APRIL 15, 1960, ARE RETURNED.