B-145332, APR. 6, 1961

B-145332: Apr 6, 1961

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B. HATCH CONSTRUCTION COMPANY: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28. A-2-89 (60) WAS ISSUED BY THE BUREAU OF LAND MANAGEMENT ON MARCH 2. FIVE BIDS WERE RECEIVED. THE ENGINEER'S ESTIMATE FOR ITEM NO. 8 WAS $3 PER 1. THE CONTRACT ASSISTANT WHO PRESIDED AT THE BID OPENING HAS REPORTED THAT WHEN ITEM NO. 8 OF YOUR BID WAS READ SOME OF THE BIDDERS QUESTIONED THE EXTENSION TOTAL. THAT YOU WERE INFORMED AT THE TIME THAT THE UNIT PRICE GOVERNED. THAT UPON LEAVING THE OFFICE YOU STATED THAT IF THE PERSON WHO QUOTED YOU PRICE OF $1.95 HAD BID TOO LOW IT WAS YOUR VIEW THAT YOUR COMPANY WOULD HAVE TO COMPENSATE HIM FURTHER. TO THE BUREAU YOU FORMALLY ALLEGED ERROR IN THE UNIT PRICE OF ITEM NO. 8 AND CONTENDED THAT YOUR UNIT PRICE ON THIS ITEM SHOULD HAVE BEEN $19.50 INSTEAD OF $1.95.

B-145332, APR. 6, 1961

TO E. B. HATCH CONSTRUCTION COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28, AND YOUR ATTORNEY'S LETTER OF MARCH 7, 1961, REQUESTING REVIEW OF SETTLEMENT OF FEBRUARY 15, 1961, WHICH DISALLOWED YOUR CLAIM FOR $2,554.75 REPRESENTING AN ADDITIONAL CHARGE FOR 145 UNITS OF 1,000 GALLONS EACH OF WATER FURNISHED BY YOUR COMPANY UNDER ITEM NO. 8, APPLICATION OF WATER BY SPRINKLING, OF CONTRACT NO. 14-004-1241 DATED APRIL 1, 1960.

INVITATION TO BID NO. A-2-89 (60) WAS ISSUED BY THE BUREAU OF LAND MANAGEMENT ON MARCH 2, 1960, AND REQUESTED BIDS, TO BE OPENED ON MARCH 18, FOR CONSTRUCTION OF THE HOLE-IN-THE-WALL DROP STRUCTURE CONSISTING OF 9 ITEMS. FIVE BIDS WERE RECEIVED, YOUR COMPANY'S BID IN THE APPARENT FACE AMOUNT OF $24,496 FOR THE ENTIRE PROJECT BEING THE LOWEST. ITEM NO. 8, PART I OF THE BID SCHEDULE, CALLED FOR APPLICATION OF WATER BY SPRINKLING BASED UPON AN ESTIMATED QUANTITY OF 400 1,000 GALLON UNITS. YOUR COMPANY'S BID ON THIS ITEM QUOTED A UNIT PRICE OF $1.95 AND A TOTAL EXTENDED PRICE OF $7,800 ON THE ESTIMATED QUANTITY OF 400 UNITS. THE OTHER BIDDERS OFFERED UNIT PRICES ON THIS ITEM RANGING FROM $2.50 TO $7, AND THE ENGINEER'S ESTIMATE FOR ITEM NO. 8 WAS $3 PER 1,000 GALLONS BASED UPON ACTUAL COSTS ON SIMILAR HAULS IN THE SAME AREA.

THE CONTRACT ASSISTANT WHO PRESIDED AT THE BID OPENING HAS REPORTED THAT WHEN ITEM NO. 8 OF YOUR BID WAS READ SOME OF THE BIDDERS QUESTIONED THE EXTENSION TOTAL; THAT SHE IMMEDIATELY VERIFIED SAME IN THE PRESENCE OF ALL SPECTATORS AND CORRECTED THE EXTENSION IN THE ABSTRACT OF BIDS TO SHOW $780 INSTEAD OF $7,800; THAT YOU WERE INFORMED AT THE TIME THAT THE UNIT PRICE GOVERNED; AND THAT FOLLOWING THE ABSTRACTING OF BIDS ONE OF THOSE PRESENT COMMENTED THAT THE PERSON WHO BID $1.95 ON ITEM NO. 8 WOULD LOSE HIS SHIRT. THE CONTRACT ASSISTANT FURTHER REPORTED THAT YOU THEN SPOKE UP AND STATED THAT YOU HAD RECEIVED TWO BIDS ON ITEM NO. 8, ONE FOR $1.75 AND THE OTHER FOR $1.95; THAT YOU ACCEPTED THE LATTER OFFER; AND THAT UPON LEAVING THE OFFICE YOU STATED THAT IF THE PERSON WHO QUOTED YOU PRICE OF $1.95 HAD BID TOO LOW IT WAS YOUR VIEW THAT YOUR COMPANY WOULD HAVE TO COMPENSATE HIM FURTHER.

BY LETTER DATED MARCH 24, 1960, TO THE BUREAU YOU FORMALLY ALLEGED ERROR IN THE UNIT PRICE OF ITEM NO. 8 AND CONTENDED THAT YOUR UNIT PRICE ON THIS ITEM SHOULD HAVE BEEN $19.50 INSTEAD OF $1.95. YOU ASSERTED THAT THE ERROR OCCURRED IN "MISPLACING THE DECIMAL MAKING THE BID APPEAR TO BE $1.95 PER UNIT INSTEAD OF $19.50" AND THAT THE TOTAL BID PRICE OF $7,800 REPRESENTED THE CORRECT BID AS EVIDENCED BY YOUR WORK SHEETS STATED TO HAVE BEEN USED IN THE PREPARATION OF YOUR BID. YOU STATED THAT YOU OBTAINED A BID FROM A SUBCONTRACTOR BY THE NAME OF H. J. WIMMER IN THE AMOUNT OF $7,000 ($17.50 PER 1,000 GALLONS) AND THAT YOU BASED YOUR BID UPON ITEM NO. 8 UPON MR. WIMMER'S QUOTATION. IT IS NOTED FROM OUR RECORDS, HOWEVER, THAT YOU PROCURED THE WATER FROM MR. M. J. GORDON FOR $1.50 PER 1,000 GALLONS. IN REPLY OF APRIL, 1960, YOU WERE ADVISED THAT ON THE BASIS OF THE SHOWING MADE THE CONTRACTING OFFICER HAD REJECTED YOUR CONTENTION THAT THE UNIT PRICE ON ITEM NO. 8 OF YOUR BID WAS IN ERROR AND THAT HE HAD ACCEPTED YOUR BID OF $17,476 (TOTAL ITEMS 1 THROUGH 9) ON BID NO. A-2-Z-89 (60). THEREAFTER, THE FORMAL CONTRACT WAS EXECUTED BY YOUR COMPANY FOR THAT AMOUNT. IT IS ADMINISTRATIVELY REPORTED THAT ONLY 145 1,000-GALLON UNITS OF WATER WERE USED IN CONSTRUCTION OF THE PROJECT WHICH WAS COMPLETED ON JULY 15, 1960.

ON JULY 19, 1960, A FINAL PAYMENT VOUCHER WAS SUBMITTED TO YOUR COMPANY FOR SIGNATURE. ITEM NO. 8 WAS SHOWN ON THE VOUCHER AS 145 1,000-GALLON UNITS AT $1.95, OR A TOTAL OF $282.75. THE SIGNED VOUCHER WAS RETURNED TO THE BUREAU BY YOUR LETTER OF JULY 19, 1960, WHEREIN YOU ADVISED THE BUREAU THAT WHILE YOU HAD SIGNED THE VOUCHER SUBMITTED TO YOUR COMPANY FOR EXECUTION YOU ASSERTED THAT THERE WAS AN ERROR IN THE AMOUNT DUE UNDER ITEM NO. 8 IN THAT FOR THIS ITEM YOU WERE BEING PAID A TOTAL AMOUNT OF $282.75 COMPUTED AT $1.95 PER 1,000 GALLON UNIT WHEREAS THE CORRECT AMOUNT SHOULD HAVE BEEN $2,827.50 COMPUTED ON THE BASIS OF $19.50 PER 1,000- GALLON UNIT FOR 145 UNITS.

YOU NOW CONTEND THAT BEFORE SIGNING THE CONTRACT YOU BROUGHT THE MATTER OF THE "APPARENT ERROR" TO THE ATTENTION OF THE SOLICITOR, BUREAU OF LAND MANAGEMENT, SALT LAKE CITY, AND THAT HE DICTATED A LETTER FOR YOU, ADDRESSED TO THE BUREAU OF LAND MANAGEMENT WHEREIN YOU MADE REQUEST FOR $19.50 PER 1,000 GALLONS. YOU STATE THAT THE SOLICITOR THEN INSTRUCTED YOU AND YOUR PARTNER TO GO AHEAD AND BOND THE JOB FOR THE FULL AMOUNT OF THE BID; THAT THE SOLICITOR STATED THAT HE COULD SEE THE ERROR; AND THAT YOUR COMPANY WAS ENTITLED TO THE FULL AMOUNT OF YOUR BID, OR $19.50 PER 1,000 GALLONS.

HOWEVER, REGARDLESS OF YOUR REPRESENTATIONS CONCERNING THE LETTER OF MARCH 24, 1960, THE LETTER OF APRIL 1, 1960, TO YOU, REFERRED TO ABOVE, WAS A CLEAR AND DEFINITE DENIAL OF YOUR REQUEST FOR CORRECTION OF THE ERROR ALLEGED BY YOU IN THE UNIT PRICE. THE FORMAL CONTRACT FORWARDED TO YOUR COMPANY AT THAT TIME WHEREIN IT AGREED TO PERFORM THE WORK FOR THE PRICE OF $17,476, BASED ON THE UNIT PRICE OF $1.95 FOR ITEM 8, WAS EXECUTED BY YOUR COMPANY APPARENTLY WITHOUT ANY FURTHER PROTEST OR RESERVATION, AND RETURNED TO THE BUREAU, WITH PERFORMANCE AND PAYMENT BONDS IN THE AMOUNTS OF 25 AND 50 PERCENT OF THE CONTRACT PRICE OF $17,476. THUS, IT CLEARLY APPEARS THAT YOUR COMPANY DID NOT ENTER INTO THE CONTRACT UNDER ANY UNDERSTANDING THAT YOUR CLAIM ON ACCOUNT OF ERROR WOULD BE FAVORABLE CONSIDERED AT A LATER DATE.

IN CASES OF THIS KIND THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT RATHER WHETHER THE ACCEPTANCE OF THE BID UNDER THE ATTENDING CIRCUMSTANCES RESULTED IN A BINDING CONTRACTUAL OBLIGATION. WHILE IN THE PRESENT INSTANCE YOUR TOTAL BID PRICE FOR ITEM NO. 8 WAS STATED IN YOUR BID AS $7,800 THE UNIT PRICE WAS STATED AS $1.950. UPON BID OPENING THE DISCREPANCY WAS CALLED TO YOUR ATTENTION SINCE IT WAS READILY APPARENT THAT THE CONTRACT COST OF 400 UNITS AT $1.95 PER UNIT WOULD RESULT IN A TOTAL OF $780 INSTEAD OF $7,800 AS STATED IN YOUR BID. THE CONTRACT ASSISTANT, IN YOUR PRESENCE AND APPARENTLY WITHOUT ANY OBJECTION OR PROTEST ON YOUR PART, CORRECTED THE EXTENDED TOTAL TO READ $780 FOR THIS ITEM. THE ONLY COMMENT ATTRIBUTED TO YOU AT THAT TIME WAS THAT IF THE MAN WHO QUOTED YOU THE PRICE OF $1.95 HAD BID TOO LOW YOU PROBABLY WOULD HAVE TO PAY HIM AN ADDITIONAL AMOUNT. WHILE IT IS TRUE THAT PRIOR TO THE EXECUTION OF THE CONTRACT YOUR COMPANY HAD ALLEGED ERROR IN THE UNIT PRICE OF ITEM NO. 8, YOU WERE SPECIFICALLY ADVISED IN THE REPLY OF APRIL 1 BY THE AREA ADMINISTRATIVE OFFICER THAT THE CONTRACTING OFFICER HAD DETERMINED THAT THE EVIDENCE OF ERROR SUBMITTED BY YOUR COMPANY DID NOT JUSTIFY YOUR CLAIM AND THAT THEREFORE YOUR PROPOSAL OF $17,476 HAD BEEN ACCEPTED. SO FAR AS THE RECORD SHOWS THE CONTRACT WAS THEN SIGNED BY YOUR COMPANY WITHOUT ANY FURTHER OBJECTION OR RESERVATION. UNDER THESE CIRCUMSTANCES, THE ACCEPTANCE OF YOUR BID MUST BE HELD TO HAVE RESULTED IN A BINDING OBLIGATION, AND YOUR EXECUTION OF THE CONTRACT WAS INCONSISTENT WITH ANY RESERVATION OF RIGHTS TO CLAIM MORE THAN THE CONTRACT RATES. YOUR RIGHTS TO RELIEF APPEAR TO BE PRECLUDED BY THE PRINCIPLES OF LAW LAID DOWN IN THE CASES OF MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699, CERTIORARI DENIED 325 U.S. 866 AND BOARD OF TRUSTEES ETC. V. O. D. WILSON CO., INC., 133 F.2D 399. IN DENYING RELIEF IN BOTH OF THESE CASES FOR THE AMOUNTS CLAIMED BY REASON OF ERRORS IN BIDS, THE COURTS STATED, IN EFFECT, THAT WHERE THE CONTRACTOR, AS WELL AS THE GOVERNMENT, IS FULLY AWARE OF A MISTAKE IN ITS BID AT THE TIME THE CONTRACT WAS SIGNED AND THE SIGNING BY THE CONTRACTOR WAS NOT IN ANY WAY INDUCED BY UNCONSCIONABLE CONDUCT--- FRAUD, MISTAKE, DURESS, ETC.- - ON THE PART OF THE GOVERNMENT OR BY ANY PROMISES FOR SUBSEQUENT RELIEF, THE CONTRACTOR CAN RECOVER NO MORE THAN THE CONTRACT PRICE. THE COURTS POINTED OUT THAT THE CONTRACTOR COULD NOT, ON ANY THEORY, CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NO CONTRACT.

ACCORDINGLY, THE SETTLEMENT OF FEBRUARY 15, 1961, IS SUSTAINED.

WITH RESPECT TO YOUR REQUEST FOR PERMISSION TO BRING THE CLAIM BEFORE A COURT FOR DECISION ON THE MERITS YOU ARE ADVISED THAT THERE IS NO REQUIREMENT THAT THIS OFFICE CONSENT TO SUITS AS A PREREQUISITE TO THE FILING THEREOF IN MATTERS OF THIS KIND AND THAT SO FAR AS THIS OFFICE IS CONCERNED YOU ARE AT LIBERTY TO TAKE SUCH ACTION IN THE COURTS AS YOU DESIRE.