B-153096, JAN. 17, 1964

B-153096, JAN. 17, 1964

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 17, 1963, WITH ENCLOSURES, FROM THE ACTING ASSISTANT POSTMASTER GENERAL, REQUESTING OUR DECISION AS TO WHAT ACTION SHOULD BE TAKEN BY YOUR DEPARTMENT CONCERNING AN ALLEGED MISTAKE IN BID.

THE RECORD SHOWS THAT ON APRIL 29, 1963, THE POSTMASTER, MAIN POST OFFICE, CLEVELAND, OHIO, ISSUED AN INVITATION FOR BIDS FOR THE FURNISHING AND INSTALLATION OF MAINTENANCE CATWALKS AND LADDERS, IN THE PARCEL POST ANNEX BUILDING, CLEVELAND, OHIO. PURSUANT TO THE AFOREMENTIONED INVITATION, ON MAY 2, 1963, EFIRD'S ERECTORS AND FABRICATORS SUBMITTED ITS BID IN THE AMOUNT OF $2,329.50 AND WAS SUBSEQUENTLY AWARDED A CONTRACT FOR THIS AMOUNT ON JUNE 19, 1963. IT IS ADMINISTRATIVELY REPORTED THAT EFIRD'S BID WAS THE ONLY BID RECEIVED. ON JUNE 24, 1963, 53 DAYS AFTER HIS COMPANY'S BID HAD BEEN SUBMITTED, MR. W. H. EFIRD ADVISED THE CONTRACTING OFFICER THAT THE COMPANY HAD MADE AN ERROR IN ITS BID AMOUNTING TO $1,133.90. HIS LETTER FURTHER STATED THAT THE MISTAKE WAS NOT FOUND UNTIL THEY (EFIRD S) WENT TO PURCHASE MATERIAL FOR THE PROJECT. ON JULY 24, 1963, MR. EFIRD WROTE THE FOLLOWING LETTER:

"ENCLOSED YOU WILL FIND OUR ORIGINAL ESTIMATING SHEET. THE MISTAKE THAT WE MADE IN ADDING UP THE TOTAL IS IN THE AMOUNT OF 1,000.00 DOLLARS, THEREFORE, OUR MARK UP IS OFF AND THE PRICE WE QUOTED YOU WOULD BE RUNNING US AT A LOSS.

CHART

THE TOTAL SHOULD READ $2,664.10

MARK UP SHOULD BE $1,065.65

QUOTATION SHOULD BE $3,724.75

"THE DIFFERENCE SHOULD BE $1,400.25, BUT IF WE COULD HAVE RELIEF IN THE AMOUNT OF $1,133.90 OUR MARK UP WOULD NOT BE AS GREAT AS WE WOULD HAVE HAD IT IF THE MISTAKE HAD NOT BEEN MADE, BUT WE WOULD STILL BE RUNNING OUT OF THE RED.'

BY LETTER DATED OCTOBER 25, 1963, MR. EFIRD ADVISED THAT HE WOULD ACCEPT AN ADDITIONAL $1,000.00 IN FULL SETTLEMENT OF THE ALLEGED ERROR. THE ACCEPTANCE OF THIS SUM WOULD RAISE THE TOTAL CONTRACT PRICE TO $3,329.50 OR $329.50 HIGHER THAN THE DEPARTMENT'S ORIGINAL ESTIMATE.

AS APPARENT FROM THE ABOVE, EFIRD'S ERECTORS AND FABRICATORS DID NOT ALLEGE THE EXISTENCE OF AN ERROR UNTIL SOMETIME AFTER THE AWARD HAD BEEN MADE. ACCORDINGLY, THE QUESTION FOR CONSIDERATION BY THIS OFFICE IS NOT WHETHER AN ERROR, IN FACT HAD BEEN MADE, BUT WHETHER A VALID AND BINDING CONTRACT HAD BEEN CONSUMMATED. SEE 36 COMP. GEN. 27 AND 39 ID., 36.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF HIS BID AND THIS BID HAS BEEN ACCEPTED, THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE AS A RESULT THEREOF. SEE 20 COMP. GEN. 652, 657 AND CASES CITED THEREIN.

IN THE PRESENT CASE, THE ONLY EVIDENCE SUBSTANTIATING THE EXISTENCE OF AN ERROR IS THAT THE SUCCESSFUL BID WAS IN AN AMOUNT LESS THAN THE GOVERNMENT ESTIMATE. THIS FACT, HOWEVER, IN AND OF ITSELF, IS NOT SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE AS TO THE PROBABILITY OF AN ERROR. THEREFORE, ANY ERROR WHICH MAY HAVE OCCURRED AMOUNTED TO A UNILATERAL MISTAKE AND DOES NOT ENTITLE EFIRD'S TO ANY UPWARD ADJUSTMENT OF HIS CONTRACT PRICE.

THE DOCUMENTS SUBMITTED WITH THE LETTER OF DECEMBER 17, 1963, ARE RETURNED HEREWITH, AS REQUESTED.