B-150980, MAR. 21, 1963

B-150980: Mar 21, 1963

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 INTERIOR: REFERENCE IS MADE TO LETTER DATED MARCH 5. FOR RESCISSION OR CORRECTION OF CONTRACT NO. 14-06-D-4781 ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID UPON WHICH SAID CONTRACT IS BASED. SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. WAS IN THE LUMP SUM AMOUNT OF $54. THE SECOND LOW BID WAS IN THE LUMP-SUM OF $56. THE GOVERNMENT'S ESTIMATE OF THE COST WAS $60. BEING THE LOWEST RECEIVED WAS ACCEPTED ON JANUARY 14. 831 WAS INADVERTENTLY OMITTED WHEN THE TOTAL MATERIAL COST WAS CARRIED FORWARD AND ENTERED ON WORKSHEET NO. 2. ORIGINAL NOTARIZED WORKSHEETS WERE SUBMITTED IN SUPPORT OF THE ALLEGED ERROR. IN VIEW THEREOF IT WAS REQUESTED THAT THE CONTRACT PRICE BE INCREASED BY THE AMOUNT OF $6.

B-150980, MAR. 21, 1963

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER DATED MARCH 5, 1963, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING A DECISION CONCERNING THE REQUEST OF AUTO- CONTROL LABORATORIES, INCORPORATED, FOR RESCISSION OR CORRECTION OF CONTRACT NO. 14-06-D-4781 ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID UPON WHICH SAID CONTRACT IS BASED.

THE BUREAU OF RECLAMATION, DENVER, COLORADO, BY INVITATION FOR BIDS NO. (D) 90,638-A, REQUESTED LUMP-SUM BIDS TO BE OPENED ON JANUARY 2, 1963, FOR FURNISHING EIGHT CONTROL SYSTEMS FOR FIXED-WHEEL GATE HOISTS FOR GLEN CANYON DAM AND POWERPLANT, COLORADO RIVER STORAGE PROJECT. SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE LOW BID, SUBMITTED BY AUTO-CONTROL LABORATORIES, INCORPORATED, WAS IN THE LUMP SUM AMOUNT OF $54,738 AFTER ADDING $352 FOR TRANSPORTATION FROM FLAGSTAFF, ARIZONA, TO THE JOB SITE IN ACCORDANCE WITH PARAGRAPH 4-A OF THE INVITATION'S SPECIAL REQUIREMENTS. THE SECOND LOW BID WAS IN THE LUMP-SUM OF $56,489.13 AFTER DEDUCTING ALLOWABLE PROMPT PAYMENT DISCOUNT. THE GOVERNMENT'S ESTIMATE OF THE COST WAS $60,000. THE BID OF AUTO-CONTROL LABORATORIES, INCORPORATED, BEING THE LOWEST RECEIVED WAS ACCEPTED ON JANUARY 14, 1963, CONSUMMATING CONTRACT NO. 14-06-D 4781.

BY LETTERS DATED JANUARY 22 AND 29, 1963, THE CONTRACTOR ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE MATERIAL COST OF STRUCTURAL AND SHEET METAL TO FABRICATE THE CABINETS AND RESERVOIRS AS SHOWN ON ITS WORKSHEET NO. 5 IN THE AMOUNT OF $5,831 WAS INADVERTENTLY OMITTED WHEN THE TOTAL MATERIAL COST WAS CARRIED FORWARD AND ENTERED ON WORKSHEET NO. 2. ORIGINAL NOTARIZED WORKSHEETS WERE SUBMITTED IN SUPPORT OF THE ALLEGED ERROR. IN VIEW THEREOF IT WAS REQUESTED THAT THE CONTRACT PRICE BE INCREASED BY THE AMOUNT OF $6,698 REPRESENTING THE OMITTED MATERIAL COST OF $5,831, PLUS GENERAL AND ADMINISTRATIVE EXPENSE, AND PROFIT THEREON, OR THAT IT BE RELIEVED OF THE CONTRACT. IT MAY BE NOTED THAT THE REQUESTED INCREASE WOULD RESULT IN A PRICE OF $4,946.87 IN EXCESS OF THE SECOND LOW BID.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE. AS HEREINBEFORE STATED, THE SECOND LOW BID WAS IN THE AMOUNT OF $56,489.13, THE GOVERNMENT'S ESTIMATE WAS $60,000, AND THE BID OF AUTO-CONTROL LABORATORIES, INCORPORATED, WAS $54,738 AS EVALUATED. SUCH DIFFERENCES ARE NOT SO GREAT AS TO WARRANT CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE KNOWLEDGE OF THE PROBABILITY OF ERROR IN THE BID, AND THE CONTRACTING OFFICER REPORTS THAT AT THE TIME OF AWARD HE HAD NO KNOWLEDGE OF THE POSSIBILITY OF ERROR. THUS IT MUST BE CONSIDERED THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

THE RESPONSIBILITY FOR THE PREPARATION FOR THE BID SUBMITTED IN RESPONSE TO THE INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 163. ANY ERROR IN THE BID WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THEREFORE, SUCH ERROR AS WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND THEREFORE DOES NOT ENTITLE THE CORPORATION TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249, 259; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505; 39 COMP. GEN. 36. ID. 405.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR INCREASING THE PRICE SPECIFIED IN CONTRACT NO. 14-06-D-4781, OR FOR RELIEVING AUTO- CONTROL LABORATORIES, INCORPORATED, FROM LIABILITY THEREUNDER.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF FACTS BY THE CONTRACTING OFFICER, ARE RETURNED.