B-144188, DEC. 7, 1960

B-144188, DEC. 7, 1960

TO SKYWAY AIR PARTS CO.:

YOUR LETTER OF SEPTEMBER 28, 1960, REQUESTS RECONSIDERATION OF OUR SETTLEMENT OF AUGUST 22, 1960, DISALLOWING YOUR CLAIM FOR A REFUND UNDER CONTRACT NO. 40-604-S-60-75, DATED MAY 24, 1960.

THE CONTRACTING OFFICER STATED THAT THREE BIDS WERE RECEIVED ON ITEM 20 OF SALES INVITATION NO. 40-604-S-60-4. THE BIDS, OPENED AT 10:00 A.M., MAY 24, 1960, INCLUDED YOUR BID OF $321.99, A BID OF $42.42 AND A BID OF $23. ITEM 20 CONSISTED OF APPROXIMATELY 880 PLAIN SELF-ALIGNING BEARINGS, SOUTHWESTERN PROD. P/N BLR 5000 G OR EQUAL, HAVING AN ACQUISITION COST OF $880. YOUR BID WAS 36.54 PERCENT OF ACQUISITION COST AND THE CONTRACTING OFFICER STATED THAT SUCH PERCENTAGE WAS NOT AN UNUSUALLY HIGH BID FOR BEARINGS AND HE SAW NO REASON FOR QUESTIONING IT. AFTER YOU RECEIVED THE AWARD FOR ITEM 20, YOU CALLED THE CONTRACTING OFFICER TO ADVISE THAT YOU INADVERTENTLY ENTERED THE FIGURE $321.99 INSTEAD OF $32.99 FOR ITEM 20. YOU REPEATED YOUR ALLEGATION OF ERROR BY LETTER OF JUNE 2, 1960, TO THE CONTRACTING OFFICER, AND ON JULY 1, 1960, FURNISHED A NOTARIZED COPY OF YOUR LETTER. YOU DID NOT FURNISH ANY EVIDENCE TO SUPPORT YOUR STATEMENT REGARDING AN ERROR IN THE BID.

THE CONTRACTING OFFICER RECOMMENDED THAT NO RELIEF BE GRANTED AND THAT YOU SHOULD BE REQUIRED TO FULFILL THE CONTRACT. BY SETTLEMENT DATED AUGUST 22, 1960, OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM FOR RELIEF UNDER THE CONTRACT.

YOUR LETTER OF SEPTEMBER 28, 1960, REQUESTING RECONSIDERATION OF OUR SETTLEMENT, FURNISHED NO ADDITIONAL INFORMATION REGARDING YOUR CLAIM OTHER THAN YOUR DISAGREEMENT WITH THE CONTRACTING OFFICER'S STATEMENT THAT A BID OF 36 PERCENT OF ACQUISITION COST WAS NOT UNUSUALLY HIGH FOR BEARINGS. YOU STATED THAT BEARINGS MANUFACTURED BY SOUTHWEST DO NOT BRING SUCH A RETURN.

WITH RESPECT TO YOUR STATEMENT THAT YOU WILL EXPECT AN ADJUSTMENT FOR MERCHANDISE RECEIVED UNDER SPOT BID SALE 61-13X IF OUR SETTLEMENT REGARDING ITEM 20 OF CONTRACT NO. 40-604-S-60-75 IS SUSTAINED, YOU HAVE FURNISHED NO INFORMATION TO SHOW THAT THESE TWO SEPARATE TRANSACTIONS SHOULD BE CONSIDERED TOGETHER. IF YOU WISH TO PRESENT A CLAIM REGARDING SPOT BID SALE 61-13X, IT WILL BE CONSIDERED SEPARATELY ON ITS OWN MERITS. YOU SHOULD FURNISH OUR CLAIMS DIVISION WITH A COMPLETE STATEMENT OF THE FACTS AND CIRCUMSTANCES UNDER WHICH THE CLAIM AROSE, THE AMOUNT CLAIMED, AND ANY DOCUMENTARY EVIDENCE SUPPORTING THE CLAIM. THE CLAIM SHOULD IDENTIFY THE CONTRACTING AGENCY BY NAME AND THE CONTRACT BY DATE AND NUMBER.

UNDER THE LEGAL PRINCIPLES APPLICABLE TO YOUR ALLEGATION OF ERROR IN YOUR BID ON ITEM 20, CONTRACT NO. 40-604-S-60-75, THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER YOU MADE AN ERROR, BUT WHETHER ACCEPTANCE OF YOUR BID BY THE GOVERNMENT RESULTED IN A VALID AND BINDING CONTRACT. THE RULE IS WELL ESTABLISHED THAT WHERE A BIDDER HAS MADE A MISTAKE IN SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, THE BIDDER MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON NOTICE--- EITHER ACTUAL OR CONSTRUCTIVE--- OF CIRCUMSTANCES WHICH WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE ELLICOTT MACHINE COMPANY V. UNITED STATES, 44 CT.CL. 127; AMERICAN WATER SOFTENER COMPANY V. UNITED STATES, 50 CT.CL. 209.

YOUR BID FOR ITEM 20 WAS CLEAR AND UNAMBIGUOUS AND THERE WAS NOTHING ON ITS FACE TO INDICATE TO THE CONTRACTING OFFICER THAT THERE WAS A POSSIBILITY OF ERROR. IF YOU FAILED TO ENTER THE BID YOU INTENDED FOR ITEM 20, THAT FAILURE WAS DUE TO YOUR OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. EVEN IF WE ACCEPT AS A FACT YOUR STATEMENT THAT AN ERROR WAS MADE, THAT FACT WOULD NOT ENTITLE YOU TO RELIEF.

EXPERIENCE HAS SHOWN THAT A WIDE RANGE OF BIDS MAY BE EXPECTED IN THE SALE OF GOVERNMENT SURPLUS PROPERTY. THE VALUE OF THE SURPLUS PROPERTY TO EACH BIDDER DEPENDS ON THE USE INTENDED OR THE CHANCE OF RESALE, AND MERE DIFFERENCE IN THE PRICES BID WOULD NOT PUT THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED ON NEW EQUIPMENT. SEE 17 COMP. GEN. 601; 28 ID. 550.

ALTHOUGH YOU HAVE STATED THAT YOU DO NOT BELIEVE THAT BEARINGS MANUFACTURED BY SOUTHWEST BRING A RETURN OF 36 PERCENT OF ACQUISITION COST, THE CONTRACTING OFFICER FOUND THAT YOUR BID WAS NOT UNUSUALLY HIGH AND OUR OFFICE FOLLOWS THE POLICY OF ACCEPTING THE REPORT OF THE ADMINISTRATIVE AGENCY WHEN THERE IS A DISPUTE OF FACT. 16 COMP. GEN. 1105. SINCE THE CONTRACTING OFFICER FOUND NO REASON TO QUESTION YOUR BID, HIS ACCEPTANCE IN GOOD FAITH RESULTED IN A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313.

ON THE PRESENT RECORD, THERE IS NO LEGAL BASIS FOR CANCELING THE CONTRACT OR FOR AUTHORIZING ANY ADJUSTMENT IN THE CONTRACT PRICE FOR ITEM 20. THE SETTLEMENT OF OUR CLAIMS DIVISION WAS CORRECT AND MUST BE SUSTAINED.