B-143044, JUN. 14, 1960

B-143044: Jun 14, 1960

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TO THE POSTMASTER GENERAL: REFERENCE IS MADE TO A LETTER DATED MAY 27. WHO IS ALSO THE CONTRACTING OFFICER. PROPOSALS WERE OPENED ON APRIL 15. THE PROPOSALS WERE SUMMARIZED ON THE ABSTRACT AS FOLLOWS: TABLE BIDDER BID KEITH O. WILL 58. HE WAS NOTIFIED ON APRIL 19. ENNEN WAS REQUESTED TO FURNISH HIS WORKSHEETS AND OTHER EVIDENCE TO SUBSTANTIATE HIS CLAIM OF ERROR. "I FEEL AT THIS TIME IN ALL FAIRNESS TO THE OTHER BIDDERS AND THE POST OFFICE DEPT I SHOULD AND WILL WITHDRAW MY BID.'. IT IS STATED BY THE GENERAL COUNSEL THAT THE CLAIM OF ERROR IS SUBSTANTIATED BY THE DEPARTMENT'S CONCLUSION THAT THE CONTRACTOR'S COSTS WOULD BE MORE THAN THE AMOUNT OF HIS BID. WHICH WERE MADE PART OF THE ADVERTISEMENT.

B-143044, JUN. 14, 1960

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER DATED MAY 27, 1960 (12-K-2), WITH ENCLOSURES, FROM THE GENERAL COUNSEL, REQUESTING OUR DECISION AS TO WHETHER THE CONTRACTING OFFICER MAY PROPERLY PERMIT MR. KEITH O. ENNEN TO WITHDRAW HIS BID SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR STAR ROUTE SERVICE AND PROCEED WITH THE AWARD OF A CONTRACT TO THE NEXT LOWEST BIDDER, ALBERT G. MACKLIN.

ON MARCH 10, 1960, THE DISTRIBUTION AND TRAFFIC MANAGER, WHO IS ALSO THE CONTRACTING OFFICER, SAN FRANCISCO, CALIFORNIA, REQUESTED PROPOSALS FOR FURNISHING SERVICE ON STAR ROUTE NO. 05539-T, SANTA MONICA TO LOS ANGELES, CALIFORNIA, FOR THE PERIOD APRIL 30, 1960, TO JUNE 30, 1962. PROPOSALS WERE OPENED ON APRIL 15, 1960, AND THE PROPOSALS WERE SUMMARIZED ON THE ABSTRACT AS FOLLOWS:

TABLE

BIDDER BID

KEITH O. ENNEN $49,920.00

ALBERT G. MACKLIN 57,470.00

DAVID J. WILL 58,433.00

BILLY L. SMITH 59,983.00

CARL F. BELONGIA 63,970.00

JOHN R. PISARIK 64,850.00

OLIVER BLACKSTEN 68,143.40

EARL HAERING 73,033.00

DEWITT TRANSFER AND STORAGE CO. 73,400.00

WINFRED WILLIAM GIESE 77,320.20

SINCE MR. ENNEN SUBMITTED THE LOWEST BID, HE WAS NOTIFIED ON APRIL 19, 1960, THAT HIS BID HAD BEEN ACCEPTED. ON APRIL 20, 1960, MR. ENNEN TELEPHONED THE CONTRACTING OFFICER AND ADVISED HIM OF A $10,000 ERROR IN HIS BID. MR. ENNEN WAS REQUESTED TO FURNISH HIS WORKSHEETS AND OTHER EVIDENCE TO SUBSTANTIATE HIS CLAIM OF ERROR. THEREAFTER, MR. ENNEN FURNISHED HIS WORKSHEETS ON APRIL 22 WITHOUT ANY EXPLANATION AS TO HOW THE ERROR OCCURRED AND WITHOUT REQUESTING WITHDRAWAL OR CORRECTION OF HIS BID. ON MAY 2, 1960, THE CONTRACTING OFFICER PURPORTED TO RESCIND THE NOTICE OF ACCEPTANCE BY "NOTICE OF CONTRACT ROUTE SERVICE ORDER," POD FORM 5440-E, AND ADVISED MR. ENNEN TO FURNISH INFORMATION AS TO HOW THE ERROR OCCURRED. ON MAY 9, MR. ENNEN ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

"IN REGARDS TO YOUR LETTER OF MAY 2, 1960, ABOUT THE ERROR OF $10,000.00 ON THE BID, I JUST DON-T KNOW HOW IT HAPPENED, I AM VERY SORRY ABOUT IT, AND I AM SURE I DIDN-T DO IT ON PURPOSE.

"I FEEL AT THIS TIME IN ALL FAIRNESS TO THE OTHER BIDDERS AND THE POST OFFICE DEPT I SHOULD AND WILL WITHDRAW MY BID.'

IT IS STATED BY THE GENERAL COUNSEL THAT THE CLAIM OF ERROR IS SUBSTANTIATED BY THE DEPARTMENT'S CONCLUSION THAT THE CONTRACTOR'S COSTS WOULD BE MORE THAN THE AMOUNT OF HIS BID.

THE INSTRUCTIONS TO BIDDERS, WHICH WERE MADE PART OF THE ADVERTISEMENT, PROVIDED IN PART AS FOLLOWS:

"24. THE POSTMASTER GENERAL RESERVES THE RIGHT TO RESCIND THE ACCEPTANCE OF A PROPOSAL AT ANY TIME BEFORE THE SIGNING ON BEHALF OF THE UNITED STATES OF THE FORMAL CONTRACT WITHOUT THE ALLOWANCE OF ANY INDEMNITY TO THE ACCEPTED BIDDER.'

ALSO, PARAGRAPH 5 OF THE NOTICE OF ACCEPTANCE CONTAINS LANGUAGE TO THE SAME EFFECT.

IN VIEW OF THESE PROVISIONS, IT WOULD APPEAR THAT A BINDING OBLIGATION WAS NOT CONTEMPLATED UNTIL THE EXECUTION OF THE FORMAL WRITTEN CONTRACT. ACCORDINGLY, HAVING REGARD FOR THE FACT THAT NEITHER PARTY HAS SIGNED THE FORMAL CONTRACT, TOGETHER WITH THE FACT THAT YOUR DEPARTMENT HAS DETERMINED THAT THE ERROR HAS BEEN SUBSTANTIATED ON THE BASIS THAT MR. ENNEN'S COST OF PERFORMING THE CONTRACT WOULD BE MORE THAN THE AMOUNT OF HIS BID, WE HAVE NO OBJECTION TO PERMITTING MR. ENNEN TO WITHDRAW HIS BID.