B-145608, MAY 4, 1961

B-145608: May 4, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER (R11.2) DATED APRIL 14. N63068S-48779 WAS BASED. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED THE CONTRACTOR. WAS ACCEPTED BY THE CONTRACTING OFFICER ON JANUARY 26. THAT ITEM WITH SEVERAL OTHER ITEMS WAS AWARDED TO THE BIDDER ON CONTRACT NO. A PHOTOSTATIC COPY OF ITS ORIGINAL BID SHOWING A QUOTATION ON ITEM NO. 21 WAS FURNISHED THE BIDDER. 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 KRAUSE- AIRCO BID WAS ERRONEOUS AS TO ITEM NO. 21.

B-145608, MAY 4, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2) DATED APRIL 14, 1961, WITH ENCLOSURES, FROM THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING A MISTAKE KRAUSE-AIRCO, NORTH HOLLYWOOD, CALIFORNIA, ALLEGED IT MADE IN ITS BID ON WHICH ITEM NO. 21 OF SALES CONTRACT NO. N63068S-48779 WAS BASED. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED THE CONTRACTOR.

BY SALES INVITATION NO. B-104-61-63068 THE CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 133 ITEMS OF SURPLUS PROPERTY LISTED AND DESCRIBED THEREIN.

IN RESPONSE TO THE INVITATION KRAUSE-AIRCO SUBMITTED A BID OFFERING TO PURCHASE A NUMBER OF THE ADVERTISED ITEMS, INCLUDING ITEM NO. 21 HERE IN QUESTION. THE BID SHOWED A UNIT PRICE OF $0.58 FOR "ANY OR ALL" OF THE 174 UNITS COMPRISING ITEM NO. 21 AND AN EXTENDED TOTAL OF $84.10. THE RECORD SHOWS THAT, IN ACCORDANCE WITH CLAUSE 18 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE BID INVITATION, WHICH PROVIDED IN CASE OF ERROR IN THE EXTENSION OF PRICES THAT UNIT PRICES WOULD GOVERN, THE CONTRACTING OFFICER CORRECTED THE TOTAL EXTENDED PRICE FOR ITEM NO. 21 TO $100.92 FOR THE 174 UNITS AT $0.58 EACH. THE BID OF KRAUSE-AIRCO ON ITEM NO. 21, BEING THE ONLY BID RECEIVED ON THAT ITEM, WAS ACCEPTED BY THE CONTRACTING OFFICER ON JANUARY 26, 1961, AND THAT ITEM WITH SEVERAL OTHER ITEMS WAS AWARDED TO THE BIDDER ON CONTRACT NO. N63068S 48779 FOR A TOTAL PRICE OF $877.11.

UPON RECEIPT OF NOTIFICATION OF THE AWARD KRAUSE-AIRCO ADVISED THE CONTRACTING OFFICER BY LETTER DATED FEBRUARY 2, 1961, THAT IT HAD NOT BID ON ITEM NO. 21. THEREUPON, A PHOTOSTATIC COPY OF ITS ORIGINAL BID SHOWING A QUOTATION ON ITEM NO. 21 WAS FURNISHED THE BIDDER, AT WHICH TIME THE CONTRACTING OFFICER ADVISED THAT 20 PERCENT, OR $20.18, OF THE PURCHASE PRICE OF ITEM NO. 21 WOULD BE RETAINED FROM ITS DEPOSIT PENDING DECISION ON THE CLAIM. IN LETTER OF MARCH 8, 1961, TO THE CONTRACTING OFFICER THE BIDDER STATED THAT APPARENTLY AN ERROR HAD BEEN MADE IN "TRANSPOSING THE WRONG ITEM NUMBER TO THE BID SUBMITTED," AND ASKED TO BE RELEASED FROM AWARD OF ITEM NO. 21. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE BIDDER FORWARDED ITS WORKSHEETS CONSISTING OF THE BIDDER'S SUMMARY SHEET OF THE SALES INVITATION AND A COPY OF PAGE 21 OF THE CATALOG OF ITEMS.

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 KRAUSE- AIRCO BID WAS ERRONEOUS AS TO ITEM NO. 21.

WHILE IT MAY BE THAT KRAUSE-AIRCO 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. 39 COMP. GEN. 36.

WHILE THE CONTRACTOR'S WORKSHEET TENDS TO SUPPORT ITS CLAIM OF ERROR, THERE IS NOTHING IN THE BID ITSELF TO SUGGEST THAT ITS QUOTATION ON ITEM NO. 21 WAS NOT AS INTENDED. KRAUSE-AIRCO 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 KRAUSE-AIRCO 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 GRANTING THE RELIEF REQUESTED BY KRAUSE-AIRCO UNDER SALES CONTRACT NO. N63068S 48779.