B-154765, AUG. 20, 1964

B-154765: Aug 20, 1964

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO THE LETTER DATED JULY 17. IN THE BID UPON WHICH SAID CONTRACT IS BASED. SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE AMOUNTS OF THE OTHER BIDS WERE: $8. THE GOVERNMENT'S ESTIMATE OF THE COST WAS $13. THE LOW BID OF BERKELEY PUMP COMPANY WAS REJECTED FOR FAILURE TO QUOTE ON ESSENTIAL COMPONENT PARTS AND FOR OTHER DEVIATIONS FROM THE REQUIREMENTS OF THE INVITATION. WAS ACCEPTED ON MAY 14. TOGETHER WITH THE ORIGINAL WORK SHEETS AND THE PRICE QUOTATION OF A GALVANIZING COMPANY ARE SUBMITTED TO DOCUMENT THE OMISSION. 038 IS REQUESTED. THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED. WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE.

B-154765, AUG. 20, 1964

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO THE LETTER DATED JULY 17, 1964, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING A DECISION ON THE APPLICATION OF THE BYRON JACKSON DIVISION, BORG-WARNER CORPORATION, LOS ANGELES, CALIFORNIA, FOR RESCISSION OR AN UPWARD ADJUSTMENT IN PRICE OF PURCHASE ORDER NO. (D) 76,602-A, CONTRACT NO. 14-06-D-5300, ON ACCOUNT OF A MISTAKE, FIRST ALLEGED AFTER AWARD, IN THE BID UPON WHICH SAID CONTRACT IS BASED.

THE BUREAU OF RECLAMATION, DENVER, COLORADO, BY INVITATION FOR BIDS NO. (D) 76,602-A, REQUESTED LUMP-SUM BIDS TO BE OPENED ON APRIL 22, 1964, FOR FURNISHING FOUR MOTOR-DRIVEN SUMP PUMPING UNITS FOR THE YELLOWTAIL DAM AND POWERPLANT, MISSOURI RIVER BASIN PROJECT, MONTANA. SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. BYRON JACKSON DIVISION, BORG- WARNER CORPORATION, BID $9,618 F.O.B. DESTINATION, HARDIN, MONTANA. THE AMOUNTS OF THE OTHER BIDS WERE: $8,808; $9,740; $10,368.16; $10,853; $10,952; AND $11,065. THE GOVERNMENT'S ESTIMATE OF THE COST WAS $13,000. THE LOW BID OF BERKELEY PUMP COMPANY WAS REJECTED FOR FAILURE TO QUOTE ON ESSENTIAL COMPONENT PARTS AND FOR OTHER DEVIATIONS FROM THE REQUIREMENTS OF THE INVITATION. THE BID OF BYRON JACKSON DIVISION, BORG-WARNER CORPORATION, BEING THE SECOND LOWEST RECEIVED, WAS ACCEPTED ON MAY 14, 1964.

BY LETTERS DATED MAY 28 AND JUNE 26, 1964, THE CONTRACTOR ADVISED THAT AN ERROR HAD BEEN MADE IN THE COMPUTATION OF ITS BID IN THAT ITS SALES ENGINEER HAD FAILED TO NOTICE THE REQUIREMENT IN PARAGRAPHS FOUR AND THIRTEEN OF THE SPECIFICATIONS FOR THE PUMPING UNITS THAT THE STEEL PUMP COLUMN, SUPPORTING COLUMNS AND DISCHARGE COLUMNS BE GALVANIZED. THE NOTARIZED AFFIDAVIT OF THE SALES ENGINEER, TOGETHER WITH THE ORIGINAL WORK SHEETS AND THE PRICE QUOTATION OF A GALVANIZING COMPANY ARE SUBMITTED TO DOCUMENT THE OMISSION. ALTHOUGH THE WORK PAPERS DO NOT CONCLUSIVELY PROVE THE SALES ENGINEER'S ESTIMATE EXCLUDED THE COST OF GALVANIZING, THE AFFIDAVIT ASSERTS THAT THE ESTIMATE NEGLECTED TO TAKE INTO CONSIDERATION THE COST OF GALVANIZING 10,380 POUNDS OF PIPE REPRESENTING ADDITIONAL COST OF 8 CENTS PER POUND FOR GALVANIZING AND 2 CENTS PER POUND TO COVER ADDED COSTS OF FREIGHT AND HANDLING TO AND FROM THE SUBCONTRACTOR. RELEASE FROM THE OBLIGATIONS OF THE CONTRACT OR AN UPWARD ADJUSTMENT IN PRICE OF $1,038 IS REQUESTED. IT MAY BE NOTED THAT THE ADJUSTED PRICE OF$10,656 WOULD BE IN EXCESS OF THE NEXT TWO LOWEST BIDS.

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 BIDS RANGED FROM $8,808 TO $11,065 AND THE THIRD LOWEST BID, THAT OF SEMPCO CORPORATION,WAS ONLY $122 HIGHER THAN THE CONTRACTOR'S BID. ALL BIDS WERE LOWER IN AMOUNT THAN THE INDEPENDENT GOVERNMENT ESTIMATE OF $13,000. THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF THE MISTAKE UNTIL AFTER AWARD AND THE DIFFERENCES DISCUSSED ABOVE ARE NOT SO GREAT AS TO WARRANT CHARGING HIM WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID. THE INVITATION FOR BIDS STATED THE REQUIREMENT FOR GALVANIZING IN A CLEAR AND UNAMBIGUOUS MANNER. ACCEPTANCE OF THE BID WAS IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SALINGER, ET AL. V. UNITED STATES, 56 F.SUPP. 505 (1944); OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CLS. 249 (1944); HYDE PARK CLOTHES, INC. V. UNITED STATES, 84 F.SUPP. 589 (1949).

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CLS. 120, 163 (1943). A UNILATERAL ERROR RESULTING FROM NEGLIGENCE IS INSUFFICIENT GROUND FOR EITHER RESCISSION OR REFORMATION OF A CONTRACT. GRYMES V. SANDERS, 93 U.S. 55 (1876); CF. 40 COMP. GEN. 326 AND 24 COMP. GEN. 415.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR INCREASING THE PRICE SPECIFIED IN PURCHASE ORDER NO. (D) 76,602-A, FOR JOB NO. 31-6- 459-11-01-01, OR FOR RELIEVING BYRON JACKSON DIVISION, BORG-WARNER CORPORATION, FROM LIABILITY THEREUNDER.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF FACTS, ARE RETURNED.