B-156127, OCT. 11, 1965

B-156127, OCT. 11, 1965

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED AUGUST 30, 1965, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY COWELL AND BROSIO, INC., TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. 01-495 IS BASED.

THE FOREST SERVICE, NORTH CENTRAL REGION, MILWAUKEE, WISCONSIN, BY INVITATION FOR BIDS NO. 1-64-145 REQUESTED BIDS FOR THE CONSTRUCTION OF A STOCK PROCESSING AND STORAGE BUILDING WITH EMPLOYEE CENTER AND A SEED STORAGE BUILDING AT JAMES W. TOUMEY NURSERY, OTTAWA NATIONAL FOREST, WATERS MEET, MICHIGAN. BIDS WERE SOLICITED ON AN ITEM BASIS WITH ALTERNATES FOR TILE, PAINTING AND REFRIGERATION. AWARD WAS MADE TO COWELL AND BROSIO, INC., AS LOW BIDDER ON MAY 19, 1964. THE AWARD INCLUDED ITEM 3, COMBINING THE STOCK BUILDING (ITEM 1) AND THE SEED BUILDING (ITEM 2), ALTERNATE 2--- PAINTING--- AND ALTERNATE 3--- REFRIGERATION. AWARD VALUES OF THESE ITEMS ARE $118,341, $3,850 AND $6,000, RESPECTIVELY. THE ITEM ON WHICH ERROR IS ALLEGED IS ITEM 3, COMBINING THE STOCK BUILDING (ITEM 1) AND THE SEED BUILDING (ITEM 2).

THE RECORD INDICATES THAT ON JUNE 27, 1964, THE V AND M ELECTRIC CO., AN ELECTRICAL SUBCONTRACTOR, ADVISED COWELL AND BROSIO, INC., THE PRIME CONTRACTOR, THAT THE CAPACITY OF THE CONTRACTORS, BUS BARS AND CIRCUIT BREAKERS WAS INSUFFICIENT TO CARRY THE LOAD REQUIRED BY THE 26 HEATING CABLES TO BE INSTALLED IN THE STOCK PROCESSING AND STORAGE BUILDING. THAT CONNECTION, IT IS REPORTED THAT THE ERROR BETWEEN THE NUMBER OF CABLES REQUIRED AND THE CAPACITY OF THE ASSOCIATED EQUIPMENT WAS REVIEWED AND A CHANGE ORDER WAS ISSUED TO COMPENSATE FOR THE CHANGES REQUIRED TO INCREASE THE CAPACITY OF THE ASSOCIATED EQUIPMENT.

ON JUNE 30, 1964, THE GORDON HATCH COMPANY, A SUPPLIER, WROTE TO THE V AND M ELECTRIC CO. REQUESTING THE COMPANY TO CHECK THE NUMBER OF HEATING CABLES REQUIRED BECAUSE OTHER REQUESTS FOR QUOTATIONS WHICH IT HAD RECEIVED HAD BEEN FOR 13 CABLES; AND THAT ON JULY 2, 1965, THE V AND M ELECTRIC CO. WROTE TO COWELL AND BROSIO REQUESTING VERIFICATION OF THE NUMBER OF CABLES REQUIRED BY THE SPECIFICATIONS. ON OCTOBER 26, 1964, THE V AND M ELECTRIC CO. FORWARDED TO COWELL AND BROSIO A QUOTATION FOR 13 ADDITIONAL HEATER CABLES WHICH, IT STATED, WOULD COST $2,050.60. THE SUBCONTRACTOR STATED THAT WHEN IT ORIGINALLY COMPUTED THE COST OF THE ELECTRICAL WORK IT HAD INTERPRETED THE SPECIFICATIONS AS CALLING FOR 13 HEATER CABLES INSTEAD OF 26 HEATER CABLES. ON OCTOBER 27, 1964, AFTER ADDING CERTAIN SUMS TO COVER ITS OVERHEAD AND PROFIT, THE PRIME CONTRACTOR REQUESTED OF THE CONTRACTING OFFICER THAT HE INCREASE THE CONTRACT PRICE BY $2,594.12 TO COVER THE COST OF THE ADDITIONAL 13 HEATER CABLES. SUBSEQUENTLY, THE PRIME CONTRACTOR REDUCED THE AMOUNT OF HIS REQUEST FOR AN INCREASE IN THE CONTRACT PRICE TO $2,176.30. IN SUPPORT OF THE ALLEGATION OF ERROR, THE PRIME CONTRACTOR SUBMITTED THE WORKSHEETS OF ITS SUBCONTRACTOR. THE RECORD INDICATES THAT THE SUBCONTRACTOR IN COMPUTING ITS BID PRICE FOR THE ELECTRICAL WORK USED A QUOTATION ON 13 HEATER CABLES WHICH HAD ORIGINALLY BEEN SUBMITTED TO ANOTHER ELECTRICAL SUBCONTRACTOR BY THE SUPPLIER OF THE CABLES.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE. THE CONTRACTING OFFICER HAS REPORTED THAT HE HAD NO REASON TO SUSPECT AN ERROR IN THE CORPORATION'S BID. THE ABSTRACT OF BIDS SHOWS THAT THE FIVE OTHER BIDDERS ON ITEM 3 QUOTED PRICES RANGING FROM $126,320 TO $149,382. IN VIEW OF THE RANGE OF THE OTHER BIDS RECEIVED, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID AS TO ITEM 3. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE CORPORATION'S BID WAS MADE IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED BY IT 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. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON COWELL AND BROSIO, INC. FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 163. IF THE CORPORATION SUBMITTED A BID BASED ON AN ERRONEOUS QUOTATION FROM ITS SUBCONTRACTOR, THAT IS A MATTER WHICH DOES NOT INVOLVE THE GOVERNMENT AND THE CORPORATION MUST ASSUME THE CONSEQUENCES OF THE ERROR OR LOOK TO ITS SUBCONTRACTOR FOR ADJUSTMENT. 31 COMP. GEN. 479.

WHILE THE CONTRACTING OFFICER DOES STATE THAT THE PLANS AND SPECIFICATIONS WERE PROBABLY MISLEADING DUE TO THE ERROR BETWEEN THE REQUIREMENTS OF THE 26 HEATING CABLES AND THE CAPACITY OF THE ASSOCIATED EQUIPMENT, THE RECORD SHOWS THAT THE SUBCONTRACTOR DID NOT USE THE PLANS AND SPECIFICATIONS IN COMPUTING ITS BID PRICE FOR THE CABLES BUT THAT IT USED A QUOTATION ON THE HEATING CABLES WHICH HAD ORIGINALLY BEEN ISSUED TO ANOTHER ELECTRICAL SUBCONTRACTOR. THE EVIDENCE INDICATES THAT THE SUBCONTRACTOR MADE AN ERROR BUT THE PRIMARY CAUSE OF THE ERROR WAS ITS BIDDING PROCEDURES, NOT THE PLANSAND SPECIFICATIONS. IN THIS CONNECTION, THE CONTRACTING OFFICER STATES THAT THE DRAWINGS, WHEN SCALED, CLEARLY SHOW THAT 26 CABLES ARE REQUIRED.

ACCORDINGLY, ON THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR INCREASING THE CONTRACT PRICE OF ITEM 3, AS REQUESTED.