B-153977, JUN. 24, 1964

B-153977, JUN. 24, 1964

ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED APRIL 28, 1964, SIGNED BY THE CHIEF COUNSEL FOR DESIGN AND CONSTRUCTION, GENERAL SERVICES ADMINISTRATION, CONCERNING THE REQUEST OF THE AKWA PLUMBING AND HEATING COMPANY OF NEW YORK, NEW YORK, FOR REFORMATION OF ITS CONTRACT NO. GS 02B-11,601/OTLB) COVERING TOILET ROOM ALTERATIONS AT 90 CHURCH STREET IN NEW YORK, NEW YORK.

THE LOW BID FROM A RESPONSIBLE BIDDER WAS AMBIGUOUS IN THAT THE PRICE WAS STATED AS $3,039 IN WORDS AND AS $3,639 IN FIGURES. THE SEVEN OTHER BIDS RECEIVED WERE $1,960, $3,955, $4,700, $5,600, $6,292, $7,700 AND $9,470. THE INDEPENDENT GOVERNMENT ESTIMATE OF THE COST OF THE WORK WAS $2,900.

ALTHOUGH THE INVITATION WAS SILENT ON THE QUESTION OF WHETHER THE AMOUNT IN FIGURES OR THE AMOUNT IN WORDS WOULD GOVERN IN CASE OF AN INCONSISTENCY, PROCUREMENT OFFICIALS SCHEDULED THE AKWA BID PRICE AS THE LOWER AMOUNT SET FORTH IN WORDS TAKING THE RULE TO BE THAT IN CASES WHERE A BID IS OPENED AND THE AMOUNT IN FIGURES AND WORDS DIFFER, THE LEGAL BID MUST BE TAKEN TO BE THE AMOUNT WRITTEN IN WORDS.

AFTER THE OPENING THE ACTING CHIEF, DESIGN AND CONSTRUCTION DIVISION SENT A LETTER TO AKWA, DATED FEBRUARY 25, 1964, READING AS FOLLOWS:

"REFERENCE IS MADE TO YOUR BID IN THE AMOUNT OF $3,039 FOR TOILET ROOM ALTERATIONS AT THE ABOVE NAMED LOCATION.

"ALTHOUGH YOUR BID IS SECOND LOW, IT MAY BE POSSIBLE TO CONSIDER IT FOR AWARD. PLEASE INDICATE IF YOU WILL AGREE TO AN EXTENSION OF TIME TO MARCH 27, 1964, FOR ACCEPTANCE OF YOUR PROPOSAL BY THE GOVERNMENT, BY SIGNING THE STATEMENT PROVIDED BELOW AND RETURNING IT TO THIS OFFICE. * * *.'

THE STATEMENT REFERRED TO WHICH READS,"I AGREE TO EXTEND THE TIME FOR ACCEPTANCE OF MY BID UNTIL MARCH 27, 1964," APPEARS TO HAVE BEEN SIGNED BY M. J. LEEDS AS OWNER.

THE LOWEST BIDDER WAS DISQUALIFIED AS NON-RESPONSIBLE AND AWARD IN THE AMOUNT OF $3,039 WAS MADE TO AKWA AS NEXT LOW BIDDER ON MARCH 19, 1964. BY LETTER TO THE GENERAL SERVICES ADMINISTRATION DATED MARCH 20, 1964, AKWA CONTENDED THAT THE AMOUNT OF THE AWARD WAS ERRONEOUS AND REQUESTED ADJUSTMENT OF THE CONTRACT PRICE TO EQUAL THE HIGHER AMOUNT SET FORTH ON THE FACE OF ITS BID IN FIGURES. UPON BEING INFORMED THAT THE ADMINISTRATION CONSIDERED THE CONTRACT A BINDING AND SUBSISTING OBLIGATION, THE MATTER WAS SUBMITTED TO OUR OFFICE.

THE CONTRACTOR STATES THAT AT THE TIME HE WAS ASKED TO EXTEND THE PERIOD FOR ACCEPTANCE OF HIS BID, AND DID GRANT SUCH EXTENSION, HE DID NOT NOTICE THE ERROR IN AMOUNT EVEN THOUGH IT WAS CLEARLY SET FORTH IN THE LETTER OF FEBRUARY 25TH. A BID FORM SETTING FORTH $3,639 IN FIGURES AND AN INSTRUCTION TO HIS SECRETARY TO SPELL OUT THIS AMOUNT, TOGETHER WITH A PAPER PURPORTING TO BE HIS ORIGINAL WORKSHEET, IS SUBMITTED IN SUPPORT OF HIS POSITION THAT HE HAD ACTUALLY INTENDED TO BID THE HIGHER AMOUNT. AVERS THAT HE DOES NOT WISH TO PERFORM THE WORK FOR $3,039 AND THAT ANY COMPULSION TO DO SO WOULD WORK A HARDSHIP UPON HIS COMPANY IN VIEW OF ITS SMALL VOLUME OF BUSINESS.

A LETTER OF APRIL 9, 1964, FROM THE CHIEF, DESIGN AND CONSTRUCTION DIVISION, PUBLIC BUILDING SERVICE, TO THE CONTRACTOR, WHICH DENIES HIS REQUEST FOR RELIEF, GIVES THE FOLLOWING REASON FOR THE DECISION:

"WHEN A BID IS OPENED AND THE AMOUNT IN FIGURES AND WORDS IS NOT THE SAME, THE BIDDER CANNOT BE ASKED TO STATE WHICH OF THE AMOUNTS IS CORRECT, AS THIS WOULD GIVE HIM AN UNFAIR ADVANTAGE OVER OTHER BIDDERS. IT WOULD BE THE SAME AS ALLOWING HIM TO SUBMIT TWO BIDS, AND THEN, AFTER ALL THE BIDS ARE OPENED, AND THE AMOUNTS ARE KNOWN, TO GIVE HIM THE CHOICE OF THE HIGHER OR LOWER AMOUNT, WHICHEVER IS TO HIS GREATER ADVANTAGE. INSTEAD OF THIS UNJUST PROCEDURE, THE LEGAL BID IS INTERPRETED TO MEAN THE AMOUNT WRITTEN IN WORDS.'

WE CANNOT AGREE WITH THE CHIEF, DESIGN AND CONSTRUCTION DIVISION, THAT THE RULE TO BE FOLLOWED IN THIS CASE IS THAT THE AMOUNT SET FORTH IN WORDS MUST GOVERN WHENEVER THE AMOUNT IN FIGURES AND WORDS ON THE FACE OF A BID DISAGREE. ADMITTEDLY THIS RULE PREVAILS WITH RESPECT TO NEGOTIABLE INSTRUMENTS IN MOST JURISDICTIONS. 5 U.L.A. SEC. 17 (1); UNIFORM COMMERCIAL CODE SEC. 3-118 (C); FARMERS' STATE BANK V. KOFFLER, 232 N.W. 307; CITIZENS' BANK V. WRITE, 128 S.E. 27. WE HAVE FOUND NO AUTHORITY FOR APPLYING THE RULE TO THE AREA OF BIDS FOR PUBLIC CONTRACTS HOWEVER, NOR DO WE BELIEVE THAT SUCH A CARRY-OVER WOULD BE SALUTARY SINCE A BID IS AN OFFER TO ENTER INTO A CONTRACT AND AN OFFER TO ENTER INTO A CONTRACT BEARS LITTLE SIMILARITY TO A NEGOTIABLE INSTRUMENT.

WHEN A BID IS OPENED AND THE AMOUNT IN FIGURES AND WORDS IS NOT THE SAME, AND IT IS IMPOSSIBLE FOR ADMINISTRATIVE OFFICIALS TO ASCERTAIN WITH RELATIVE CERTAINTY EITHER FROM THE FACE OF THE BID, BACKGROUND KNOWLEDGE, OR FROM EVIDENCE LATER SUBMITTED BY THE BIDDER, WHICH OF THE TWO SUMS REPRESENTS THE INTENDED BID, THEN THE BID IS INHERENTLY AMBIGUOUS AND MUST BE DISREGARDED IN MAKING THE AWARD, UNLESS BOTH AMOUNTS ARE BETTER THAN ANY OTHER BID. B-144946 DATED MAY 17, 1961; CF. B-148648, APRIL 19, 1962. A MEETING OF THE MINDS BETWEEN THE PARTIES DOES NOT EXIST AS LONG AS A MOST ESSENTIAL TERM OF THE AGREEMENT, NAMELY THE PRICE, REMAINS UNCERTAIN. WHERE THERE IS A MISUNDERSTANDING AS TO A MATERIAL TERM OF A CONTRACT, NEITHER PARTY IS LIABLE THEREON IN LAW OR EQUITY AND THE TRANSACTION IS A NULLITY. FIRST NATIONAL BANK V. HALL, 101 U.S. 43; UNITED STATES V. ELLICOTT, 223 U.S. 524.

THE CONTRACTING OFFICER WAS PLACED ON NOTICE OF THE ERROR'S EXISTENCE AT THE TIME OF THE OPENING BY THE DISCREPANCY OF THE FACE OF THE BID. WE DO NOT BELIEVE THAT THE LETTER REQUESTING AN EXTENSION OF AKWA'S BID CONSTITUTED AN ADEQUATE REQUEST FOR BID VERIFICATION WITHIN THE RULE LAID DOWN IN UNITED STATES V. METRO NOVELTY CO., 125 F.SUPP. 713.

FOR THE ABOVE REASONS WE CONSIDER THE CONTRACT WITH AKWA PLUMBING AND HEATING COMPANY FOR THE PERFORMANCE OF PROJECT NO. 01249, POD 62-2 065 AS VOID AND OF NO LEGAL EFFECT.

THE ENCLOSURES RECEIVED WITH THE LETTER OF APRIL 28, 1964, ARE RETURNED, AS REQUESTED.