B-156378, APR. 1, 1965

B-156378: Apr 1, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

REQUESTS OUR ADVICE WHETHER RELIEF IS OBTAINABLE FROM THE GOVERNMENT ON ACCOUNT OF AN ERROR ALLEGEDLY MADE BY YOU IN A BID TO SUPPLY STEEL TO GOODRICH-SAN JOSE COMPANY. WHICH IS STATED TO BE APPROXIMATELY $35. YOU CONTEND THAT GOODRICH-SAN JOSE WOULD HAVE REMAINED THE LOW BIDDER HAD YOUR CORRECT BID BEEN USED. IT APPEARS THAT THE GOVERNMENT CONTRACT INVOLVED WAS BETWEEN THE GOVERNMENT AND GOODRICH-SAN JOSE. THAT THE GOVERNMENT WAS NOT A PARTY TO THE CONTRACT BETWEEN GOODRICH-SAN JOSE AND YOUR COMPANY. IT IS WELL-ESTABLISHED THAT CONTRACTS OR AGREEMENTS TO FURNISH SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT ORDINARILY DO NOT CREATE ANY PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTORS AND THE UNITED STATES.

B-156378, APR. 1, 1965

TO HAVEN-BUSCH COMPANY:

YOUR LETTER OF MARCH 22, 1965, REQUESTS OUR ADVICE WHETHER RELIEF IS OBTAINABLE FROM THE GOVERNMENT ON ACCOUNT OF AN ERROR ALLEGEDLY MADE BY YOU IN A BID TO SUPPLY STEEL TO GOODRICH-SAN JOSE COMPANY, A PRIME CONTRACTOR UNDER A UNITED STATES POST OFFICE DEPARTMENT CONTRACT FOR THE CONSTRUCTION OF A POST OFFICE BUILDING IN SAN JOSE, CALIFORNIA.

YOU STATE THAT A SERIOUS ERROR IN YOUR BID RESULTED IN YOUR PRICE BEING TOO LOW. HOWEVER, RATHER THAN RENEGE ON YOUR BID, YOU EXECUTED THE CONTRACT WITH GOODRICH-SAN JOSE AT YOUR ORIGINAL BID PRICE.

IN SUPPORT OF YOUR REQUEST FOR RELIEF FOR YOUR LOSS, WHICH IS STATED TO BE APPROXIMATELY $35,000, YOU CONTEND THAT GOODRICH-SAN JOSE WOULD HAVE REMAINED THE LOW BIDDER HAD YOUR CORRECT BID BEEN USED; THEREFORE, RELIEF WOULD RESULT IN NO PREJUDICE TO OTHER BIDDERS. FROM YOUR LETTER, IT APPEARS THAT THE GOVERNMENT CONTRACT INVOLVED WAS BETWEEN THE GOVERNMENT AND GOODRICH-SAN JOSE, AND THAT THE GOVERNMENT WAS NOT A PARTY TO THE CONTRACT BETWEEN GOODRICH-SAN JOSE AND YOUR COMPANY.

IT IS WELL-ESTABLISHED THAT CONTRACTS OR AGREEMENTS TO FURNISH SUPPLIES TO PRIME CONTRACTORS ENGAGED IN THE PERFORMANCE OF CONTRACTS WITH THE GOVERNMENT ORDINARILY DO NOT CREATE ANY PRIVITY OF CONTRACT BETWEEN THE SUBCONTRACTORS AND THE UNITED STATES. SEE H. HERFURTH, JR., INC. V. UNITED STATES, 89 CT.CL. 122; JOSEPH PETRIN ET AL. V. UNITED STATES, 90 ID. 670; UNITED STATES V. DRISCOLL, 96 U.S. 421; MERRITT V. UNITED STATES, 267 ID. 338. IN THE CIRCUMSTANCES, THERE BEING NO CONTRACTUAL RELATIONSHIP BETWEEN YOU AND THE GOVERNMENT, WE ARE AWARE OF NO BASIS ON WHICH A CLAIM BY YOU AGAINST THE GOVERNMENT MAY BE PAID BY THIS OFFICE. RATHER, SINCE YOUR CONTRACT WAS WITH GOODRICH-SAN JOSE, YOUR CLAIM FOR ADJUSTMENT OF YOUR CONTRACT PRICE WOULD APPEAR TO BE A MATTER FOR SETTLEMENT BETWEEN YOU AND THAT FIRM.