B-145149, MAR. 7, 1961

B-145149: Mar 7, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER (R11.2) DATED FEBRUARY 20. N63068S-48364 WAS BASED. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED. WAS ACCEPTED ON JANUARY 3. AWARD WAS MADE TO THE COMPANY ON CONTRACT NO. APPEARS TO BE SUBSTANTIATED BY THE WORKSHEET BUT THAT IT IS NOT ASCERTAINABLE FROM EITHER THE INVITATION OR THE BID ITSELF. THAT AT THE TIME THE AWARD WAS MADE HE NEITHER KNEW NOR SHOULD HAVE KNOWN BECAUSE OF THE AMOUNT OR OTHERWISE THAT THE HACKETT BID WAS ERRONEOUS AS TO EITHER ITEM NO. 30 OR ITEM NO. 37. THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER THE COMPANY MADE A MISTAKE IN ITS BID BUT WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT.

B-145149, MAR. 7, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER (R11.2) DATED FEBRUARY 20, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING A MISTAKE ALLEGED BY HACKETT INDUSTRIAL EQUIPMENT COMPANY, RICHMOND, CALIFORNIA, IN ITS BID ON WHICH AWARD OF ITEMS NOS. 30 AND 37 OF SALES CONTRACT NO. N63068S-48364 WAS BASED. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED.

BY BID INVITATION NO. B-88-61-63068 DATED DECEMBER 9, 1960, OAKLAND CONSOLIDATED SURPLUS SALES OFFICE SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 47 ITEMS OF SURPLUS PROPERTY DESCRIBED THEREIN. HACKETT INDUSTRIAL EQUIPMENT COMPANY SUBMITTED A BID WITH QUOTATIONS ON A NUMBER OF THE ADVERTISED ITEMS, INCLUDING ITEMS NOS. 30 AND 37. THAT COMPANY'S BID ON THOSE TWO ITEMS, BEING THE HIGHEST, WAS ACCEPTED ON JANUARY 3, 1961, AND AWARD WAS MADE TO THE COMPANY ON CONTRACT NO. N63068S-48364 OF ITEM NO. 30 AT ITS UNIT BID PRICE OF $51.57, OR A TOTAL OF $154.71, AND OF ITEM NO. 37 AT $187.50. UPON RECEIPT OF NOTICE OF AWARD HACKETT INDUSTRIAL EQUIPMENT COMPANY BY LETTER OF JANUARY 9, 1961, ADVISED THE SURPLUS SALES OFFICE THAT IN PREPARING ITS BID SHEET FOR SUBMISSION IT INADVERTENTLY PLACED THE AMOUNTS IT INTENDED TO BID FOR ITEM NO. 31 ON THE LINE OPPOSITE ITEM NO. 30 AND, ALSO, THE AMOUNT IT INTENDED TO BID FOR ITEM NO. 38 ON THE LINE OPPOSITE ITEM NO. 37. THE COMPANY HAS STATED THAT IT INSPECTED THE MATERIAL AT THE NAVAL AIR STATION, ALAMEDA, PRIOR TO SUBMITTING ITS BID AND AT THAT TIME PLACED ON A COPY OF PAGE 5 OF THE BID INVITATION AS A WORKSHEET THE AMOUNTS IT DESIRED TO BID ON THOSE ITEMS. THE COMPANY FORWARDED THE WORKSHEET IN SUPPORT OF ITS ALLEGATION OF ERROR AND REQUESTED TO BE RELEASED FROM AWARD OF BOTH ITEMS NOS. 30 AND 37.

THE CONTRACTING OFFICER IN HIS STATEMENT OF FACTS STATES THAT THE EXISTENCE OF THE MISTAKE, AS ALLEGED, APPEARS TO BE SUBSTANTIATED BY THE WORKSHEET BUT THAT IT IS NOT ASCERTAINABLE FROM EITHER THE INVITATION OR THE BID ITSELF, AND THAT AT THE TIME THE AWARD WAS MADE HE NEITHER KNEW NOR SHOULD HAVE KNOWN BECAUSE OF THE AMOUNT OR OTHERWISE THAT THE HACKETT BID WAS ERRONEOUS AS TO EITHER ITEM NO. 30 OR ITEM NO. 37.

WHILE IT MAY BE THAT THE HACKETT INDUSTRIAL EQUIPMENT COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED, THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER THE COMPANY MADE A MISTAKE IN ITS BID BUT WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT. ACCEPTANCE OF A BID CONSUMMATES A VALID AND BINDING CONTRACT UNLESS THE OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. MOFFETT, HODGKINS AND CLARK COMPANY V. ROCHESTER, 178 U.S. 373.

WHILE THE COMPANY'S WORKSHEET TENDS TO SUPPORT ITS CLAIM OF ERROR, THERE IS NOTHING IN THE BID ITSELF TO SUGGEST THAT ITS QUOTATIONS ON THOSE ITEMS WERE NOT AS INTENDED. HACKETT INDUSTRIAL EQUIPMENT COMPANY DID NOT ALLEGE ERROR IN ITS BID UNTIL AFTER AWARD OF THE CONTRACT AND THE RECORD DOES NOT INDICATE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OTHERWISE OF THE PROBABILITY OF ERROR IN THE BID. CONSEQUENTLY, IT MUST BE HELD THAT THE CONTRACTING OFFICER WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR AND THAT HIS ACCEPTANCE OF THE BID OF HACKETT INDUSTRIAL EQUIPMENT COMPANY WAS IN GOOD FAITH. SUCH ACCEPTANCE, THEREFORE, RESULTED IN A VALID AND BINDING CONTRACT AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER OR AGENT OF THE GOVERNMENT IS AUTHORIZED TO WAIVE. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

IN THESE CIRCUMSTANCES, THERE IS NO LEGAL BASIS FOR RELIEVING HACKETT INDUSTRIAL EQUIPMENT COMPANY FROM ITS OBLIGATIONS UNDER SALES CONTRACT NO. N63068S-48364.