B-144777, JAN. 19, 1961

B-144777, JAN. 19, 1961

TO MR. R. E. FRANKS, CONTRACTING OFFICER, VETERANS ADMINISTRATION CENTER:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 9, 1961 (6015/134), WITH ENCLOSURES, RELATING TO A MISTAKE ALLEGED BY BAUMEISTER ASSOCIATES, INC., MILWAUKEE, WISCONSIN, TO HAVE BEEN MADE IN ITS BID UNDER INVITATION FOR BIDS DATED DECEMBER 2, 1960, ISSUED BY THE VETERANS ADMINISTRATION CENTER, WOOD, WISCONSIN, COVERING PROJECT NO. 61-2-1. IN VIEW OF THE FACTS SET FORTH IN YOUR LETTER AND THE ENCLOSURES, YOU REQUEST A DECISION BY OUR OFFICE AS TO THE ACTION TO BE TAKEN BY YOU IN THIS MATTER.

THE RECORD SHOWS THAT BY THE CITED INVITATION THE CHIEF OF THE SUPPLY DIVISION REQUESTED BIDS FOR WASHING AND PAINTING OF INTERIOR WALLS OF BUILDINGS 70, 77, AND 78 AT THE CENTER, IN ACCORDANCE WITH SPECIFICATIONS NO. 62-2-1A, THE BIDS TO BE OPENED AT 1:30 P.M., ON DECEMBER 20, 1960. SIX BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, THE LOWEST BEING THAT SUBMITTED BY BAUMEISTER ASSOCIATES, INC., AT THE BID PRICE OF $33,618. THE NEXT LOWEST BID WAS IN THE SUM OF $37,000, AND THE REMAINING FOUR BIDS RANGED IN PRICE FROM $43,460 TO $73,915. YOUR ENGINEERING DIVISION ESTIMATED THE COST OF THE JOB AT $41,600.

IT IS REPORTED THAT REPRESENTATIVES OF FIVE OF THE SIX BIDDERS WERE PRESENT AT THE BID OPENING, INCLUDING MR. JOSEPH BAUMEISTER, PRESIDENT OF BAUMEISTER ASSOCIATES, INC. UNDER DATE OF DECEMBER 23, 1960, MR. BAUMEISTER NOTIFIED THE ASSISTANT CHIEF OF THE SUPPLY DIVISION BY TELEPHONE OF AN ALLEGED ERROR IN HIS BID AND WAS INSTRUCTED TO SUBMIT HIS CLAIM OF ERROR IN WRITING. ALTHOUGH NOT SPECIFICALLY STATED IN YOUR LETTER, WE INFER FROM THE BIDDER'S EXTENSION OF TIME ALLOWED FOR ACCEPTANCE THAT NO AWARD HAD BEEN MADE AT THAT TIME. BY LETTER OF THE SAME DAY MR. BAUMEISTER SET FORTH THE FACTS RELATING TO THE ALLEGED ERROR, STATING THAT FIVE WINGS OF THE BUILDINGS INVOLVED APPEARED, FOR ALL PRACTICAL PURPOSES, TO BE IDENTICAL, AND THAT ACCORDINGLY THE AREA TO BE CLEANED AND PAINTED WAS ESTIMATED, ON THE BASIS OF ONE WING, WITH THE INTENTION OF MULTIPLYING BY FIVE. MR. BAUMEISTER ADVISED, HOWEVER, THAT IN THE HASTE TO PREPARE THE BID, THE "5" INSERTED IN THE WORKSHEET WAS NOT WRITTEN AS DISTINCTLY AS IT SHOULD HAVE BEEN AND THAT AS A CONSEQUENCE THE SINGLE ESTIMATE WAS MULTIPLIED BY THREE INSTEAD OF BY FIVE, AS INTENDED, RESULTING IN THE SUBMISSION OF A BID IN AN AMOUNT $8,100 LESS THAN IT SHOULD HAVE BEEN.

WITH HIS LETTER OF DECEMBER 23, 1960, MR. BAUMEISTER SUBMITTED THE ESTIMATING SHEETS ON WHICH THE BID OF DECEMBER 20, 1960, APPEARS TO HAVE BEEN BASED, WHICH APPEAR TO SUBSTANTIATE THE ALLEGATION OF ERROR.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID IS UPON THE BIDDER, WHO ORDINARILY MUST BEAR THE CONSEQUENCES OF AN ERROR IN THE BID UPON WHICH A CONTRACT IS BASED. HOWEVER, THAT RULE DOES NOT ENTITLE THE GOVERNMENT TO TAKE ADVANTAGE OF A BIDDER'S ERROR WHEN, AS IN THE INSTANT CASE, IT HAS BEEN ALLEGED AND SATISFACTORILY ESTABLISHED PRIOR TO AWARD. THE GENERAL RULE IS THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT. SEE NASON COAL COMPANY V. UNITED STATES, 64 CT.CL. 526; RESTATEMENT OF THE LAW OF CONTRACTS, SECTION 503; AND WILLISTON ON CONTRACTS, SECTION 1578. ALSO, SEE MOFFETT, HODGKINS AND CLARKE COMPANY V. ROCHESTER, 178 U.S. 373; KEMP V. UNITED STATES, 38 F.SUPP. 568; AND 17 COMP. GEN. 575, 576.

SINCE THE ERROR IN THIS CASE HAS BEEN ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD, THE BID OF BAUMEISTER ASSOCIATES, INC., SHOULD BE DISREGARDED IN MAKING AN AWARD.