B-148726, MAY 22, 1962

B-148726: May 22, 1962

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED APRIL 20. THE INVITATION WAS ISSUED BY THE UNITED STATES ARMY CHEMICAL PROCUREMENT DISTRICT. BIDS WERE OPENED JANUARY 5. AWARD WAS MADE TO MTD RESEARCH FOR ITEMS 1. THE CONTRACTOR ALLEGED THAT ITS BID ON ITEM 3 WAS IN ERROR DUE TO A MISUNDERSTANDING IN SECURING A VERBAL QUOTATION OF $665 FROM GARDNER LABORATORY. WHEREAS THE CORRECT QUOTATION FROM GARDNER SHOULD HAVE BEEN $1. THE CONTRACTOR'S CLAIM FOR THE DIFFERENCE OF $875 IS SUPPORTED BY A LETTER FROM GARDNER LABORATORY VERIFYING THAT THE ERRONEOUS QUOTATION WAS MADE AND STATING THAT THE INITIAL PRICE DID NOT INCLUDE THE COST OF A PHOTOMETRIC UNIT WHICH WAS A NECESSARY COMPONENT OF ITEM 3.

B-148726, MAY 22, 1962

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED APRIL 20, 1962, FROM THE CHIEF, CONTRACTS DIVISION, IN BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS), REQUESTING A DECISION AS TO WHETHER THE APPLICATION OF MTD RESEARCH AND DEVELOPMENT CORPORATION FOR RELIEF DUE TO A MISTAKE IN BID UNDER INVITATION NO. CML-30-070-61-97 MAY BE GRANTED.

THE INVITATION WAS ISSUED BY THE UNITED STATES ARMY CHEMICAL PROCUREMENT DISTRICT, NEW YORK, NEW YORK, AND ITEM 3 COVERED A LIGHT TRANSMISSION AND HAZE METER. BIDS WERE OPENED JANUARY 5, 1961, WITH TWO BIDS BEING RECEIVED FOR ITEM 3, CLAIMANT'S LOW BID OF $1,123.77 AND ANOTHER BID OF $1,800. AWARD WAS MADE TO MTD RESEARCH FOR ITEMS 1, 2 AND 3 BY PURCHASE ORDER NO. NY 1-888, DATED FEBRUARY 13, 1961.

BY LETTER DATED MARCH 13, 1961, THE CONTRACTOR ALLEGED THAT ITS BID ON ITEM 3 WAS IN ERROR DUE TO A MISUNDERSTANDING IN SECURING A VERBAL QUOTATION OF $665 FROM GARDNER LABORATORY, INC., MANUFACTURER OF THE UNIT, WHEREAS THE CORRECT QUOTATION FROM GARDNER SHOULD HAVE BEEN $1,540. THE CONTRACTOR'S CLAIM FOR THE DIFFERENCE OF $875 IS SUPPORTED BY A LETTER FROM GARDNER LABORATORY VERIFYING THAT THE ERRONEOUS QUOTATION WAS MADE AND STATING THAT THE INITIAL PRICE DID NOT INCLUDE THE COST OF A PHOTOMETRIC UNIT WHICH WAS A NECESSARY COMPONENT OF ITEM 3.

AS STATED IN THE "FINDINGS AND DETERMINATION" OF THE CHIEF CHEMICAL OFFICER DATED SEPTEMBER 13, 1961, IT IS A WELL-ESTABLISHED RULE THAT A BIDDER MUST BEAR THE CONSEQUENCES OF A MISTAKE IN AN ACCEPTED BID UNLESS THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE THEREOF. COMP. GEN. 724, 727.

THERE WAS NO ACTUAL NOTICE OF ERROR PRIOR TO THE AWARD AND IT DOES NOT APPEAR THAT THERE WAS ANYTHING ON THE FACE OF THE BID WHICH WOULD CAUSE THE CONTRACTING OFFICER TO SUSPECT THAT AN ERROR HAD BEEN MADE. THIS ITEM HAD NOT PREVIOUSLY BEEN PURCHASED BY THE PROCURING OFFICE AND IF THE CONTRACTOR DID NOT QUESTION THE QUOTATION OF ITS SUPPLIER, IT CANNOT REASONABLY BE ARGUED THAT THE CONTRACTING OFFICER SHOULD HAVE QUESTIONED THE BID PRICE. FURTHERMORE, THE CONTRACTING OFFICER HAS STATED THAT HE DID NOT NOTICE ANYTHING ABOUT THE BID WHICH WOULD INDICATE THAT AN ERROR MIGHT HAVE BEEN MADE.

FROM THE FOREGOING IT SEEMS CLEAR THAT SUCH MISTAKE AS MAY HAVE BEEN MADE WAS DUE SOLELY TO A MISUNDERSTANDING BETWEEN THE CONTRACTOR AND ITS SUPPLIER, THAT THE GOVERNMENT DID NOT CONTRIBUTE TO THE ERROR IN ANY WAY AND THAT THE BID WAS ACCEPTED IN GOOD FAITH, THEREBY CONSUMMATING A VALID CONTRACT OBLIGATING THE CONTRACTOR TO FURNISH THE ITEMS AT THE PRICES QUOTED. ACCORDINGLY, THERE IS NO LEGAL BASIS FOR THE PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE. 27 COMP. GEN. 724, SUPRA, AND CASES THERE CITED.