B-155345, FEB. 17, 1965

B-155345, FEB. 17, 1965

TO TURNER MURPHY COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 13, 1965, WITH ENCLOSURE, REQUESTING REVIEW OF OUR DECISION OF JANUARY 6, 1965, B 155345, WHEREIN YOU WERE INFORMED THAT THERE APPEARED TO BE NO LEGAL BASIS FOR GRANTING THE ADDITIONAL COMPENSATION CLAIMED UNDER CONTRACT NO. DA-09-133-ENG-5186, ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID UPON WHICH THE CONTRACT WAS BASED.

IN YOUR LETTER OF JANUARY 13, 1965, YOU CONTEND, IN EFFECT, THAT THE INVITATION FOR BIDS REQUIRED YOU, IN THE CASE OF A MISTAKE, TO FORFEIT 5 PERCENT OF YOUR BID; THAT YOU HAD DISCOVERED THE MISTAKE BEFORE THE CONTRACT WAS CONSUMMATED; AND THAT YOU BELIEVED THAT THE MISTAKE COULD BE CORRECTED EITHER BEFORE OR AFTER THE CONTRACT WAS SIGNED.

CONTRARY TO YOUR BELIEF, THERE IS A WIDE DIFFERENCE IN THE LEGAL RIGHTS OF A BIDDER ALLEGING A MISTAKE IN BID BEFORE AWARD OF A CONTRACT AND HIS RIGHTS AFTER THE CONTRACT HAS BEEN AWARDED. IN CASES WHERE A MISTAKE HAS BEEN ALLEGED PROMPTLY AFTER OPENING OF BIDS BUT BEFORE AWARD OF THE CONTRACT, AND THERE HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE THAT A MISTAKE WAS MADE, ITS NATURE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE CORRECTED IN ORDER THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF THE LOWER PRICE. WHERE THE CONTRACTOR HAS FAILED TO ESTABLISH HIS INTENDED BID PRICE, WE HAVE PERMITTED WITHDRAWAL OF HIS BID.

HOWEVER, IN CASES WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF THE CONTRACT, THIS OFFICE WILL GRANT RELIEF ONLY IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS, OR SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. THE MISTAKE THAT WAS MADE WAS A UNILATERAL ERROR ON YOUR PART AND THE RECORD DOES NOT ESTABLISH THAT THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD.

IN THESE CIRCUMSTANCES, A COMPLETE, VALID AND ENFORCEABLE CONTRACT CAME INTO BEING UPON ACCEPTANCE OF YOUR BID, WHETHER OR NOT THE FORMAL CONTRACT WAS EVER EXECUTED. AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75. MOREOVER, AT THE TIME YOU SIGNED THE FORMAL CONTRACT YOU STATE THAT YOU WERE AWARE OF THE MISTAKE IN YOUR BID. WE ARE OF THE OPINION THAT BY SIGNING THE CONTRACT WITH KNOWLEDGE OF THE ERROR IN YOUR BID, YOU, IN EFFECT, WAIVED ANY RIGHTS YOU MAY HAVE HAD TO RELIEF. SEE IN THAT CONNECTION THE CASE OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 CT.CL. 699 (CERTIORARI DENIED 325 U.S. 866) WHEREIN THE PLAINTIFF ALLEGED ERROR IN ITS BID BY REASON OF HAVING FAILED TO INCLUDE ON THE SHEET SUMMARIZING THE VARIOUS ESTIMATE SHEETS, THE CHARGE FOR USE OF CERTAIN EQUIPMENT AMOUNTING TO $88,000 APPEARING ON ONE OF THE ESTIMATE SHEETS. EVEN THOUGH THE MISTAKE WAS DISCOVERED AND BROUGHT TO THE ATTENTION OF THE GOVERNMENT BEFORE AWARD, AND THE CONTRACT EXECUTED UNDER PROTEST, THE COURT DENIED ANY RELIEF, SAYING (P. 717/---

"AT THE TIME THE CONTRACT WAS AWARDED TO THE PLAINTIFF, PURSUANT TO ITS BID, AND AT THE TIME IT SIGNED THE CONTRACT, THE PLAINTIFF WAS NOT MISTAKEN. IT HAD BECOME AWARE OF THE MISTAKE IN ITS BID, AND FACED THE PROBLEM OF WHETHER IT WAS WILLING TO SIGN A CONTRACT FOR THE FIGURE WHICH IT HAD, BY MISTAKE SINCE DISCOVERED, BID. THE GOVERNMENT WAS ALSO AWARE OF THE PLAINTIFF'S CLAIM THAT IT HAD MADE A MISTAKE IN ITS BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED EITHER OF THEM TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THAT BEING SO, IF WE SHOULD REFORM THE CONTRACT AS THE PLAINTIFF REQUESTS, WE WOULD BE MAKING FOR THE PARTIES THE VERY CONTRACT WHICH ONE OF THEM, THE GOVERNMENT, EXPRESSLY REFUSED TO MAKE AT THAT TIME, THOUGH REQUESTED TO DO SO BY THE PLAINTIFF.'

SEE ALSO BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INC., 133 F.2D 399; 23 COMP. GEN. 596; 25 ID. 536; 31 ID. 384; AND 39 ID. 405.

THE MATTER HAS BEEN CAREFULLY RECONSIDERED BUT NO BASIS HAS BEEN FOUND TO MODIFY THE CONCLUSION HERETOFORE REACHED IN THE MATTER. ACCORDINGLY, THE DECISION OF JANUARY 6, 1965, IS AFFIRMED.