B-149366, JUL. 24, 1962

B-149366, JUL. 24, 1962

TO MR. B. P. BELLPORT:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 3, 1962 (D-150), WITH ENCLOSURES, RELATING TO A MISTAKE ALLEGED BY THE CONTROL PANEL CORPORATION, 4431 WEST DIVISION STREET, CHICAGO 51, ILLINOIS, TO HAVE BEEN MADE IN ITS BID SUBMITTED PURSUANT TO INVITATION FOR BIDS NO. DS 5782, ISSUED BY THE BUREAU OF RECLAMATION UNDER DATE OF APRIL 27, 1962. IN VIEW OF THE FACTS SET FORTH IN YOUR LETTER OF JULY 3, 1962,AND THE ENCLOSURES THERETO, OUR DECISION IS REQUESTED WHETHER THE BID OF THE CONTROL PANEL CORPORATION SHOULD BE CONSIDERED FOR AWARD AND, IF SO, ON WHAT PRICE BASIS.

THE RECORD SHOWS THAT BY THE CITED INVITATION FOR BIDS THE BUREAU OF RECLAMATION REQUESTED BIDS FOR FURNISHING DUPLEX CONTROL BOARD SECTIONS AND CARRIER-CURRENT TRANSMITTER-RECEIVER SETS FOR THE PINNACLE PEAK SUBSTATION AND UNMOUNTED EQUIPMENT FOR THE MESA AND PRESCOTT SUBSTATIONS, TRANSMISSION DIVISION, COLORADO RIVER STORAGE AND PARKER-DAVIS PROJECTS, ARIZONA, THE BIDS TO BE OPENED AT 2 P.M., M.S.T., ON MAY 29, 1962, AT THE DENVER FEDERAL CENTER. THE ABSTRACT OF BIDS SHOWS THAT FIVE BIDS WERE RECEIVED WHICH QUOTED PRICES, FOR THE PURPOSE OF COMPARISON, RANGING FROM A LOW OF $95,921 SUBMITTED BY THE CONTROL PANEL CORPORATION OF CHICAGO, ILLINOIS, TO A HIGH OF $163,677.50 SUBMITTED BY THE GENERAL ELECTRIC COMPANY, DENVER, COLORADO. THE SECOND LOW BIDDER WAS THE WESTINGHOUSE ELECTRIC CORPORATION AT THE BID PRICE OF $99,862.75. THE SCHEDULE INCLUDED IN THE INVITATION FOR BIDS DIVIDED THE REQUIRED EQUIPMENT INTO FIVE DIFFERENT ITEMS, CALLING FOR SEPARATE PRICES ON EACH, AND PROVIDED THAT NO BID WOULD BE CONSIDERED FOR ONLY A PART OF THAT SCHEDULE.

BY LETTER DATED JUNE 11, 1962, THE CONTROL PANEL CORPORATION, AFTER HAVING BEEN INFORMED THAT IT WAS THE LOW BIDDER, ADVISED YOUR OFFICE THAT A MISTAKE HAD BEEN MADE IN THE BID SUBMITTED BY THAT CONCERN, AND IN SUPPORT OF THE ALLEGED ERROR ENCLOSED COPIES OF ITS ORIGINAL WORK SHEETS, ETC. THE LOW BIDDER REQUESTED TO BE ADVISED AS TO WHETHER THE BID COULD BE WITHDRAWN OR THE PRICE ALTERED SO AS TO CORRECT THE ALLEGED ERROR. THE ASSISTANT COMMISSIONER AND CHIEF ENGINEER REPLIED BY LETTER OF JUNE 19, 1962, TO THE EFFECT THAT HE WAS WITHOUT AUTHORITY TO PERMIT THE WITHDRAWAL OR PRICE ALTERATION OF A BID AFTER THE BID OPENING, SUCH MATTERS BEING WITHIN THE JURISDICTION OF OUR OFFICE. BY A FURTHER LETTER DATED JUNE 26, 1962, THE CONTROL PANEL CORPORATION REQUESTED WITHDRAWAL OF ITS BID, THERE BEING ATTACHED TO THE LETTER A SWORN STATEMENT REGARDING THE ALLEGED ERROR, AS WELL AS CERTIFIED COPIES OF FIVE WORK OR COMPUTATION SHEETS SHOWING HOW THE ERROR OCCURRED.

IT WAS STATED IN YOUR LETTER THAT YOU HAVE NO REASON TO DOUBT THAT AN ERROR OF $10,000 WAS MADE IN THE COMPUTATION OF THE INTENDED BID PRICE FOR ITEM 1, BUT THAT YOU DOUBT THE SUFFICIENCY OF THE EVIDENCE SUBMITTED TO ESTABLISH THE EXACT BID PRICE INTENDED BY THE BIDDER INASMUCH AS THE ERROR MIGHT WELL HAVE AFFECTED OTHER FACTORS SUCH AS ADMINISTRATIVE OVERHEAD, MANUFACTURING AND SELLING OVERHEAD, AND NET PROFIT, ALL OF WHICH APPEAR TO BE REFLECTED IN THE BIDDERS QUOTED PRICE OF $62,341 FOR ITEM 1. YOU THEN POINTED OUT THAT IF THE ALLEGED ERROR OF $10,000 IS ALLOWED, AND THE BID PRICE INCREASED ACCORDINGLY, THE BID OF THE CONTROL PANEL CORPORATION WOULD BECOME THE SECOND LOW BID AND THEREFORE NOT APPROPRIATE FOR AWARD PURPOSES.

AN EXAMINATION OF THE WORK SHEETS SUBMITTED BY THE LOW BIDDER APPEARS TO ESTABLISH CLEARLY THE EXISTENCE OF A MISTAKE IN ITS BID. WE REFER TO THE ITEMS AGGREGATING $53,581, APPEARING AS A PART OF THE BID FOR ITEM 1, BUT WHICH WERE TOTALED AS $43,581, OBVIOUSLY BECAUSE OF AN ERROR IN ADDITION.

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. OUR OFFICE HAS HELD, HOWEVER, THAT THAT RULE DOES NOT ENTITLE THE GOVERNMENT TO TAKE ADVANTAGE OF A BIDDER'S ERROR WHERE 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 ESTABLISHED PRIOR TO AWARD, THE BID OF THE CONTROL PANEL CORPORATION SHOULD BE DISREGARDED IN MAKING AN AWARD.