B-143216, AUG. 18, 1960

B-143216: Aug 18, 1960

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TO SHIFFER-LINDSAY SOFT WATER CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 14. REQUESTING CANCELLATION OF INFORMAL CONTRACT NO. 168 WHICH WAS AWARDED TO YOUR COMPANY ON MAY 24. AN INVITATION TO BID ON THE PROJECT WAS ISSUED ON APRIL 28. TWO BIDS WERE RECEIVED AND OPENED ON MAY 19. AWARD WAS MADE TO YOU AS THE LOWEST BIDDER. CLAIMING THAT THE BID PROPERLY SHOULD HAVE BEEN IN THE AMOUNT OF $1. YOU ALSO CONTEND THAT INSTALLATION OF THE LINDSAY UNIT CONTEMPLATED BY YOUR BID IS NOT POSSIBLE SINCE IT FITS ONLY A 3/4- INCH WATER LINE. THE EXISTING FACILITY AT THE STATION IS A 2-INCH LINE. WHILE YOUR BID WAS SUBSTANTIALLY LOWER THAN THE ONLY OTHER BID RECEIVED. THE ONLY BASIS FOR FAIR COMPARISON ARE THE AMOUNTS OF TWO WIDELY VARIANT BIDS.

B-143216, AUG. 18, 1960

TO SHIFFER-LINDSAY SOFT WATER CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 14, 1960, REQUESTING CANCELLATION OF INFORMAL CONTRACT NO. 168 WHICH WAS AWARDED TO YOUR COMPANY ON MAY 24, 1960, FOR THE FURNISHING AND INSTALLATION OF A WATER SOFTENER AT BUILDING 23-A, U.S. NAVY SUPPLY DEPOT, MECHANICSBURG, PENNSYLVANIA, IN STRICT ACCORDANCE WITH SPECIFICATION NO. 168/60.

PRIOR TO THE ISSUANCE OF AN INVITATION FOR BIDS ON THIS PROJECT, A REPRESENTATIVE OF YOUR COMPANY EXAMINED THE PROPOSED SPECIFICATION AND INFORMALLY ASSURED THE OFFICER IN CHARGE OF CONSTRUCTION THAT YOUR COMPANY COULD FURNISH AND INSTALL THE REQUIRED WATER SOFTENER UNIT FOR $740. THE BASIS OF SUCH ASSURANCE, THE GOVERNMENT ESTIMATED THE COST OF THIS PROJECT TO BE $800. AN INVITATION TO BID ON THE PROJECT WAS ISSUED ON APRIL 28, 1960, REFERRING TO SPECIFICATION NO. 168/60. TWO BIDS WERE RECEIVED AND OPENED ON MAY 19, 1960, AND IT APPEARED THAT YOU SUBMITTED A BID IN THE AMOUNT OF $740, AND THAT EVERSOFT WATER COND., INC., SUBMITTED A BID IN THE AMOUNT OF $1,898.90. ACCORDINGLY, AWARD WAS MADE TO YOU AS THE LOWEST BIDDER. HOWEVER, WE UNDERSTAND THAT NO WORK HAS BEEN ACCOMPLISHED UNDER THE CONTRACT.

ON JUNE 10, 1960, YOU ALLEGED AN ERROR IN YOUR BID IN THAT YOU UNDERBID IN THE AMOUNT OF $740, CLAIMING THAT THE BID PROPERLY SHOULD HAVE BEEN IN THE AMOUNT OF $1,480. YOU ALSO CONTEND THAT INSTALLATION OF THE LINDSAY UNIT CONTEMPLATED BY YOUR BID IS NOT POSSIBLE SINCE IT FITS ONLY A 3/4- INCH WATER LINE, WHEREAS, THE EXISTING FACILITY AT THE STATION IS A 2-INCH LINE.

WHILE YOUR BID WAS SUBSTANTIALLY LOWER THAN THE ONLY OTHER BID RECEIVED, IT HAS BEEN HELD THAT WHERE, AS HERE, THE ONLY BASIS FOR FAIR COMPARISON ARE THE AMOUNTS OF TWO WIDELY VARIANT BIDS, THERE IS NO MORE REASON FOR CONSIDERING THAT THE LOW BID WAS TOO LOW THAN THERE IS FOR CONSIDERING THAT A MISTAKE WAS MADE BY THE HIGH BIDDER IN QUOTING A PRICE TOO HIGH. 20 COMP. GEN. 286. FURTHER, THE FACT THAT THE GOVERNMENT'S ESTIMATE WAS $800 DID NOT AFFORD THE CONTRACTING OFFICER ANY REAL BASIS FOR COMPARING BIDS, ESPECIALLY SINCE SUCH ESTIMATE WAS BASED UPON YOUR OWN ASSURANCE THAT THE JOB COULD BE DONE FOR $740. UNDER SUCH CIRCUMSTANCES, WE FIND NO BASIS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF AN ERROR IN YOUR BID.

MOREOVER, THE FACT THAT YOUR EQUIPMENT IS ADAPTABLE ONLY TO A 3/4 INCH WATER LINE IS NO BASIS FOR RELIEVING YOU OF YOUR OBLIGATIONS UNDER THE CONTRACT. PARAGRAPH 2.1D OF THE CONTRACT SPECIFICATIONS PROVIDES THAT INSTALLATION OF THE SOFTENER UNIT IS TO BE MADE IN A 2 INCH WATER LINE. SINCE THE WRITTEN CONTRACT IS PRESUMED TO EMBODY ALL THE UNDERSTANDINGS OF THE PARTIES THERETO, NO LEGAL BASIS EXISTS TO EXCUSE RESPONSIBILITY THEREUNDER BECAUSE YOU NOW FIND THAT YOU ARE UNABLE TO COMPLY WITH THE CONTRACT REQUIREMENTS.

WE, THEREFORE, ARE REQUIRED TO CONCLUDE THAT INFORMAL CONTRACT NO. 168 MAY NOT BE CANCELED WITHOUT LIABILITY TO THE GOVERNMENT FOR ANY DAMAGES THAT IT MAY INCUR IN THE EVENT YOU DEFAULT IN THE PERFORMANCE OF THE CONTRACT.