B-156773, SEPT. 1, 1965

B-156773: Sep 1, 1965

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TO HUDSON AND CREYKE: REFERENCE IS MADE TO YOUR LETTERS DATED MAY 10. IS AS FOLLOWS: "A. ENG-NASA/-01-076-65-23 WAS ISSUED ON 23 NOVEMBER 1964. FOUR BIDS WERE OPENED AT THE TIME AND PLACE STATED. WAS PRESENTAT THE OPENING AND WAS REQUESTED TO. NO COMMENT WAS MADE REGARDING ANY MISTAKE IN THE BID AS SUBMITTED. FULL DISCLOSURE AS TO ALL BID AMOUNTS AND THE TOTAL GOVERNMENT ESTIMATE WAS MADE AT THE BID OPENING. A TELEGRAM WAS DISPATCHED TO CARPENTER BROTHERS AT ITS ADDRESS IN DALLAS. NOTIFYING THAT IT WAS BEING AWARDED THE CONTRACT. WAS MAILED TO CARPENTER BROTHERS. ACKNOWLEDGMENT OF RECEIPT OF THIS DOCUMENT IS DATED DECEMBER 30. 1964AND IS SIGNED BY ROBERT D. CARPENTER WAS RECEIVED IN THE DISTRICT OFFICE.

B-156773, SEPT. 1, 1965

TO HUDSON AND CREYKE:

REFERENCE IS MADE TO YOUR LETTERS DATED MAY 10, 1965, AND JULY 19, 1965, WITH ENCLOSURES, REQUESTING THAT WE AUTHORIZE THE CORRECTION OF A MISTAKE IN BID ALLEGEDLY MADE BY CARPENTER BROTHERS UNDER CONTRACT NO. ENG/NASA/- 10-076-65-23, CONSTRUCTION OF MOBILE EQUIPMENT MAINTENANCE BUILDING, MISSISSIPPI TEST FACILITY, MISSISSIPPI.

A RESUME OF FACTS, AS REPORTED BY THE CONTRACTING OFFICER, IS AS FOLLOWS:

"A. INVITATION NO. ENG-NASA/-01-076-65-23 WAS ISSUED ON 23 NOVEMBER 1964, COVERING CONSTRUCTION OF MOBILE EQUIPMENT MAINTENANCE BUILDING AT MISSISSIPPI TEST FACILITY, MISSISSIPPI, WITH INFORMATION CONTAINED THEREIN THAT BIDS WOULD BE RECEIVED UNTIL 11:00 A.M., 22 DECEMBER 1964. FOUR BIDS WERE OPENED AT THE TIME AND PLACE STATED, BEING IN THE AMOUNTS OF $1,159,000.00, $1,318,697.00, $1,387,999.00 AND $1,399,789.25; THE GOVERNMENT ESTIMATE BEING IN THE AMOUNT OF $1,050,839.00. REPRESENTATIVE OF CARPENTER BROTHERS, THE LOWEST BIDDER, WAS PRESENTAT THE OPENING AND WAS REQUESTED TO, AND DID, CONFER WITH DISTRICT REPRESENTATIVES IMMEDIATELY AFTER THE OPENING REGARDING THE BID, THE PROCUREMENT OF PAYMENT AND PERFORMANCE BONDS, INSURANCE AND OTHER DETAILS RELATING TO THE EXECUTION OF THE CONTRACT AND ITS SUPPORTING DOCUMENTS. NO COMMENT WAS MADE REGARDING ANY MISTAKE IN THE BID AS SUBMITTED. FULL DISCLOSURE AS TO ALL BID AMOUNTS AND THE TOTAL GOVERNMENT ESTIMATE WAS MADE AT THE BID OPENING.

"B. AT APPROXIMATELY 3:00 P.M. ON 28 DECEMBER 1964, AFTER COMPLETION OF PREAWARD SURVEY, A TELEGRAM WAS DISPATCHED TO CARPENTER BROTHERS AT ITS ADDRESS IN DALLAS, TEXAS, NOTIFYING THAT IT WAS BEING AWARDED THE CONTRACT. LATER THE SAME AFTERNOON A FORMAL NOTICE OF AWARD, EXECUTED BY THE CONTRACTING OFFICER, WAS MAILED TO CARPENTER BROTHERS. ACKNOWLEDGMENT OF RECEIPT OF THIS DOCUMENT IS DATED DECEMBER 30, 1964AND IS SIGNED BY ROBERT D. CARPENTER. TWO DAYS SUBSEQUENT TO AWARD, AT 11:30 A.M. ON 30 DECEMBER 1964, MR. ROBERT D. CARPENTER, ONE OF THE PARTNERS OF THE BIDDER CONCERN, PRESENTED IN PERSON TO A DISTRICT REPRESENTATIVE A WRITTEN ALLEGATION OF MISTAKE IN ITEM 1 OF THE BID. THE FOLLOWING DAY, 31 DECEMBER, MR. CARPENTER DELIVERED DATA IN SUPPORT OF THE ALLEGATION OF MISTAKE. ON 4 JANUARY 1965, THE CONTRACT INSTRUMENT SIGNED BY ROBERT D. CARPENTER WAS RECEIVED IN THE DISTRICT OFFICE. NOTICE TO PROCEED WAS ISSUED TO THE CONTRACTOR ON THE SAME DATE.'

IT ALSO IS REPORTED THAT THE ERROR ALLEGED BY CARPENTER BROTHERS IS THAT IT INADVERTENTLY TRANSFERRED FROM ITS WORK SHEET TO THE BID FORM THE AMOUNT OF AN ELECTRICAL SUBCONTRACTOR'S QUOTATION OF $142,000 AT $14,200, A DIFFERENCE OF $127,800. CARPENTER BROTHERS REQUESTED PERMISSION OF THE CONTRACTING OFFICER TO CORRECT ITS BID BY INCREASING THE BID PRICE BY $87,120, WHICH IS THE AMOUNT OF ITS ERROR ($127,800) LESS $40,680, THE AMOUNT WAIVED PURSUANT TO THE ,MISTAKE IN BIDS" PROVISION IN THE INVITATION FOR BIDS. THE REQUEST WAS DENIED ON THE BASIS THAT THE ALLEGATION OF ERROR WAS MADE AFTER AWARD OF CONTRACT; THAT THE ERROR ALLEGED WAS A UNILATERAL MISTAKE BY THE CONTRACTOR; AND THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF ANY ERROR PRIOR TO AWARD OF THE CONTRACT.

YOU CONTEND THAT THE ERROR IN BID WAS CALLED TO THE CONTRACTING OFFICER'S ATTENTION BEFORE THE AWARD WAS MADE; THAT THE TELEGRAPHIC NOTICE TO CARPENTER BROTHERS WAS ONLY ADVICE THAT AN AWARD WOULD BE MADE; AND THAT ACTUAL ADVICE OF AWARD WAS ACCOMPLISHED ONLY ON RECEIPT OF THE LETTER, WHICH OCCURRED AFTER NOTICE OF ERROR WAS COMMUNICATED. IN SUPPORT OF YOUR POSITION YOU CITE THE CASE OF RHODE ISLAND TOOL CO. V. UNITED STATES, 130 CT.CL. 698.

THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED EVEN BEFORE AWARD IS MADE AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. REFINING ASSOCIATES, INC. V. UNITED STATES, 109 F.SUPP. 259, 124 CT.CLS. 115. SEE ALSO, SCOTT V. UNITED STATES, 44 CT.CLS. 524. HOWEVER, COURT DECISIONS HAVE ALLOWED ADDITIONAL COMPENSATION TO LOW BID CONTRACTORS WHO, THOUGH REFUSED PERMISSION ADMINISTRATIVELY TO CORRECT THEIR BIDS, HAVE BEEN ABLE TO PRESENT SATISFACTORY PROOF THAT THEIR BIDS WERE ERRONEOUS, TOGETHER WITH A CLEAR SHOWING AS TO WHAT THEY INTENDED TO BID. EDMUND J. RAPPOLI COMPANY, INC. V. UNITED STATES, 98 CT.CLS. 499. IN THE INSTANT MATTER, THERE APPEARS TO BE LITTLE, IF ANY, DOUBT THAT THE BID WAS ERRONEOUS AND THAT THE CONTRACTOR INTENDED TO BID $127,800 MORE THAN THE CONTRACT PRICE. IF SUCH ADDITIONAL AMOUNT IS ADDED TO THE CONTRACT PRICE IT WILL STILL BE SUBSTANTIALLY LOWER THAN THE NEXT LOW BID.

IN THOSE CASES WHERE ALLEGATION IS MADE OF ERROR IN BID AFTER AWARD HAS BEEN MADE, IT HAS CONSISTENTLY BEEN HELD BY THE COURTS AS WELL AS OUR OFFICE THAT WHERE A BID HAS BEEN ACCEPTED, THE BIDDER HIMSELF MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR ITSELF SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE UNDUE ADVANTAGE. SEE 20 COMP. GEN. 652 AND CASES CITED THEREIN. HENCE, IT IS OF IMPORTANCE TO DETERMINE WHETHER THE ALLEGATION OF ERROR WAS MADE BEFORE OR AFTER AWARD WAS MADE. THE RECORD SHOWS THAT THE ALLEGATION WAS MADE AFTER MAILING OF NOTICE OF AWARD BY THE CONTRACTING OFFICER BUT BEFORE RECEIPT OF SUCH NOTICE BY THE CONTRACTOR. IN THIS CONNECTION WE DO NOT VIEW THE TELEGRAPHIC ADVICE AS ANYTHING MORE THAN THAT AWARD WOULD BE MADE.

THE CURRENT POSTAL MANUAL PROVIDES FOR CERTAIN PROCEDURES IN THE RECALL OF MAIL, AND INDICATES THAT THE MAILER HAS NOT LOST CONTROL OF THE ITEM MAILED UNTIL ACTUALLY DELIVERED TO THE ADDRESSEE. SEE POSTAL MANUAL, 1954 EDITION, PARAGRAPH 153.5. SEE ALSO RHODE ISLAND TOOL CO. V. UNITED STATES, 130 CT.CLS. 698. WE ARE OF THE OPINION THAT THE COURT OF CLAIMS WOULD HOLD THAT THE AWARD MADE ON DECEMBER 28 WAS NOT EFFECTIVE UNTIL RECEIVED BY THE CONTRACTOR ON DECEMBER 30, 1964.

IN VIEW OF THE FOREGOING, WE HAVE NO OBJECTION TO THE MODIFICATION OF THE CONTRACT SO AS TO PERMIT PAYMENT OF AN ADDITIONAL AMOUNT OF $87,120 TO THE CONTRACTOR. THE SECRETARY OF THE ARMY IS BEING ADVISED OF THIS DECISION.