B-157453, NOV. 4, 1965

B-157453: Nov 4, 1965

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TO REMINGTON OFFICE MACHINES: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10. THIS PURCHASE ORDER WAS ENTERED INTO IN RESPONSE TO THE TERMS OF INVITATION FOR BIDS AMC (A/-18-035-65-974 COVERING MAINTENANCE SERVICES FOR 124 GOVERNMENT-OWNED REMINGTON CALCULATORS AND ADDING MACHINES FOR THE PERIOD JULY 1. THREE BIDS HAD BEEN RECEIVED AND WERE PUBLICLY OPENED. REPRESENTATIVES OF REMINGTON OFFICE MACHINES WERE PRESENT AT THE TIME. THE INVITATION FOR BIDS SPECIFICALLY INDICATED THAT AWARD WAS TO BE MADE BY LOT. THE LOWEST BID RECEIVED BY LOT WAS THE BID SUBMITTED BY REMINGTON OFFICE MACHINES IN THE AMOUNT OF $3. THE OTHER TWO BIDS RECEIVED WERE IN THE AMOUNTS OF $4. WAS CONTACTED ON JUNE 29.

B-157453, NOV. 4, 1965

TO REMINGTON OFFICE MACHINES:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10, 1965, REQUESTING REFORMATION OR RESCISSION OF YOUR PURCHASE ORDER NO. 01-18-035-C5-20353 (A) ENTERED INTO WITH THE EDGEWOOD ARSENAL, DEPARTMENT OF THE ARMY, ON JUNE 30, 1965. THIS PURCHASE ORDER WAS ENTERED INTO IN RESPONSE TO THE TERMS OF INVITATION FOR BIDS AMC (A/-18-035-65-974 COVERING MAINTENANCE SERVICES FOR 124 GOVERNMENT-OWNED REMINGTON CALCULATORS AND ADDING MACHINES FOR THE PERIOD JULY 1, 1965 TO JUNE 30, 1966. AT THE SCHEDULED TIME FOR BID OPENING, JUNE 29, 1965, THREE BIDS HAD BEEN RECEIVED AND WERE PUBLICLY OPENED. REPRESENTATIVES OF REMINGTON OFFICE MACHINES WERE PRESENT AT THE TIME. THE INVITATION FOR BIDS SPECIFICALLY INDICATED THAT AWARD WAS TO BE MADE BY LOT, I.E., TO THE ONE BIDDER WHOSE TOTAL BID FOR ALL ITEMS IN THE LOT WOULD BE THE MOST ADVANTAGEOUS TO THE GOVERNMENT. THE LOWEST BID RECEIVED BY LOT WAS THE BID SUBMITTED BY REMINGTON OFFICE MACHINES IN THE AMOUNT OF $3,882.72. THE OTHER TWO BIDS RECEIVED WERE IN THE AMOUNTS OF $4,224.00 AND $5,131.00, BY LOT.

EXCEPT ON ITEMS 1 AND 4, REMINGTON'S BID OF $3,882.72 MADE NO DISTINCTION IN PRICE BETWEEN THE ITEM PRICES FOR ADDING MACHINES AND CALCULATORS. AN ATTEMPT TO CLEAR UP THIS POSSIBLE IRREGULARITY, MR. JAMES B. MITCHELL, WHO SIGNED REMINGTON'S BID AS BRANCH CED MANAGER, WAS CONTACTED ON JUNE 29, 1965. HE ADVISED THAT THE UNIT PRICE QUOTED WAS THE COMPANY'S PRICE FOR MACHINES LOCATED WITHIN "ZONE 1," AND THAT THE PRICES SUBMITTED HAS BEEN BASED ON SERIAL NUMBER, RATHER THAN MODEL NUMBER. IT WAS ALSO NOTED THAT THE BID PRICE OF REMINGTON FOR SOME OF THE ITEMS BID WAS IDENTICAL TO THOSE ITEMS SHOWN ON THE FEDERAL SUPPLY SCHEDULE AS REMINGTON'S PRICES FOR ,ZONE 1.' IN ORDER TO ASCERTAIN IN WHICH "ZONE" EDGEWOOD ARSENAL WAS LOCATED, AND WHETHER A DUAL BID WAS BEING SUBMITTED (THE SAME BID ON BOTH THE ARMY IFB AND THE FEDERAL SUPPLY SCHEDULE), ON JUNE 29 THE GENERAL SERVICES ADMINISTRATION WAS CONTACTED BY TELEPHONE AND IT WAS ASCERTAINED THAT EDGEWOOD ARSENAL FELL WITHIN "ZONE 1" AND THAT NO PROHIBITION EXISTED TO PREVENT REMINGTON FROM ENTERING A BID FOR SERVICES ON MACHINES AT THAT LOCATION AT THE SAME PRICES QUOTED FOR ZONE 1 ON THE FEDERAL SUPPLY SCHEDULE.

BASED UPON THE FOREGOING, AWARD OF PURCHASE ORDER NO. 01-18-035-C5 20353 (A) WAS MADE TO REMINGTON OFFICE MACHINES ON JUNE 30, 1965. BY LETTER DATED JULY 13, 1965, YOUR COMPANY'S BRANCH MANAGER, MR. E. W. MALLISON, ADVISED EDGEWOOD ARSENAL THAT A MISTAKE HAD BEEN MADE IN THE BID, AND PERMISSION TO WITHDRAW OR REVISE THE BID WAS REQUESTED FOR THE FOLLOWING REASONS:

"1. THE REMINGTON BID DOES NOT COMPLY WITH THE CONTRACT NEGOTIATED BY G.S.A. AND REMINGTON OFFICE MACHINES.

"2. THE BID WAS PRICED BY A CLERK WHO DID NOT DIFFERENTIATE BETWEEN ADDING MACHINES AND CALCULATORS. ALL MACHINES CONSEQUENTLY WERE BID AT ADDING MACHINES PRICE.

"3. THE BID WAS SIGNED BY J. B. MITCHELL WHO IS NOT AUTHORIZED TO SIGN SUCH BIDS.

"4. THE BID SHOULD HAVE BEEN SUBMITTED AT ZONE 2 CHARGES SINCE EDGEWOOD ARSENAL IS APPROXIMATELY 18 MILES FROM THE REMINGTON OFFICE.'

IN YOUR LETTER OF AUGUST 10, 1965, REFERRED TO ABOVE, MORE DETAILED INFORMATION ON THE FIRST THREE REASONS WAS GIVEN. IT IS POINTED OUT THAT DUE TO AN ERROR OF YOUR BALTIMORE SERVICE MANAGER, MR. JAMES B. MITCHELL, THE PRICE OF $31.44 WAS INADVERTENTLY REPEATED FOR ALL ITEMS AFTER ITEM 5 WHILE PREPARING THE BID, WHEREAS THE PRICE OF $31.44 SHOULD HAVE CHANGED FROM $31.44 TO $52.80 WHEN THE MODEL NUMBER CHANGED AT ITEM 44. IT IS ALSO CONTENDED THAT YOU WILL BE OBLIGATED TO REDUCE YOUR PRICES UNDER THE TERMS OF GENERAL SERVICES ADMINISTRATION CONTRACT GS-OOS-54646 IF YOU PERFORM THE SERVICES AT EDGEWOOD ARSENAL AT THE LOWER PRICES QUOTED IN YOUR BID. ADDITIONALLY, YOU POINT OUT THAT THE CONTRACTOR'S SIGNATURE ON INVITATION FOR BIDS NO. AMC (A/-18-035-65-974 WAS AN UNAUTHORIZED SIGNATURE, SINCE ONLY THE BRANCH MANAGER HAS THE AUTHORITY TO SIGN CONTRACTS ON BEHALF OF YOUR COMPANY.

AFTER REQUESTING SERVICES FROM YOUR COMPANY PURSUANT TO THE TERMS OF PURCHASE ORDER NO. 01-18-035-C5-20353 (A) AND RECEIVING ADVICE THAT SERVICES AT THE CONTRACT RATES WOULD NOT BE PROVIDED, IT WAS DETERMINED BY THE CONTRACTING OFFICER THAT YOUR COMPANY WAS IN DEFAULT OF THE TERMS OF THE PURCHASE ORDER. NOTWITHSTANDING YOUR REQUEST OF AUGUST 10 TO THIS OFFICE, ON AUGUST 13, 1965, A FORMAL NOTICE OF TERMINATION FOR DEFAULT WAS ISSUED AND YOUR COMPANY WAS SO ADVISED.

IN OUR DECISION OF AUGUST 20, 1964, B-154765, IT WAS STATED THAT THE PREPARATION OF A BID IS THE RESPONSIBILITY OF THE BIDDER, AND A UNILATERAL ERROR RESULTING FROM NEGLIGENCE IN THE PREPARATION OF THE BID IS INSUFFICIENT GROUNDS FOR EITHER RESCISSION OR REFORMATION OF A CONTRACT. IT IS OUR OPINION THAT THE ALLEGED ERROR OF YOUR EMPLOYEE, IN TYPING THE INCORRECT NUMBERS FOR CERTAIN ITEMS IN IFB NO. AMC (A/-18 035-65-974, MUST BE CLASSIFIED AS A UNILATERAL ERROR, SINCE THE GOVERNMENT NEITHER CONTRIBUTED TO, OR KNEW OF, THE ERROR. ALTHOUGH IT WOULD APPEAR THAT THE CONTRACTING OFFICER SUSPECTED THAT AN ERROR HAD BEEN COMMITTED WHEN HE OBSERVED THAT THERE WAS NO DIFFERENCE IN THE BID PRICES FOR SERVICES ON ADDING MACHINES AND CALCULATORS, THE SUBSEQUENT ADVICE BY MR. MITCHELL THAT THE PRICES SUBMITTED WERE FORMACHINES LOCATED IN ZONE 1 AND WERE BASED ON SERIAL NUMBER RATHER THAN MODEL NUMBER IS ENOUGH TO ABSOLVE THE CONTRACTING OFFICER OF CONSTRUCTIVE NOTICE OF THE ERRORS. BASED ON THE FOREGOING WE MUST CONCLUDE THAT THE ALLEGED ERRORS IN THE BID PRICES DO NOT AFFORD A PROPER BASIS UPON WHICH YOUR COMPANY MAY BE GRANTED RELIEF BY EITHER RESCISSION OR REFORMATION OF THE CONTRACT.

WITH RESPECT TO CONTRACT NO. GS-OOS-54646 BETWEEN YOUR COMPANY AND THE GENERAL SERVICES ADMINISTRATION, YOU ADVISE THAT THE TERMS OF THAT CONTRACT OBLIGATE YOU TO KEEP THE SAME PRICES FOR THE SAME SERVICES FOR EACH AGENCY INVOLVED, AND YOU CONTEND THAT YOU SHOULD NOT BE REQUIRED TO SERVICE THE MACHINES AT EDGEWOOD ARSENAL AT YOUR BID PRICES SINCE PERFORMANCE AT SUCH REDUCED PRICES WOULD COMPEL YOUR COMPANY TO REDUCE ITS PRICES FOR ALL GOVERNMENT AGENCIES INVOLVED IN THE GSA CONTRACT.

CONTRACT GS-OOS-54646 IS AN INDEFINITE FEDERAL SUPPLY SCHEDULE CONTRACT FOR OFFICE MACHINES AND SERVICES WHICH WAS ENTERED INTO ON APRIL 9, 1965, FOR THE CONTRACT PERIOD OF JULY 1, 1965 TO JUNE 30, 1966. AMONG THE SERVICES TO BE PROVIDED BY CONTRACT GS-OOS-546 ARE MAINTENANCE SERVICES FOR REMINGTON ADDING AND CALCULATING MACHINES SIMILAR TO THE MAINTENANCE SERVICES TO BE PROVIDED BY PURCHASE ORDER NO. 01-18-035-C5-20353 (A). THE PRICES FOR THESE SERVICES UNDER CONTRACT GS-OOS-54646 ARE BASED ON THE PHYSICAL LOCATION OF THE MACHINES (DESIGNATED ON A ZONE BASIS), THE MODEL NUMBER OF THE MACHINE, AND THE NUMBER OF MACHINES LOCATED IN THE SAME BUILDING. PRICE REDUCTIONS ARE PROVIDED FOR IN CONTRACT GS-OOS-54646 BY THE STANDARD CLAUSE ENTITLED "PRICE REDUCTIONS" SET FORTH IN GSA FORM 1424, AND BY PARAGRAPH 9 OF THE SPECIAL PROVISIONS, WHEN THE CONTRACTOR SELLS SERVICES AT REDUCED PRICES TO EITHER A FEDERAL SUPPLY AGENCY OR TO CUSTOMERS GENERALLY.

ALTHOUGH THE TERMS OF CONTRACT GS-OOS-54646 WOULD APPEAR TO REQUIRE A PRICE REDUCTION IF YOUR COMPANY IS REQUIRED TO REDUCE PRICES FOR THE SAME SERVICES UNDER PURCHASE ORDER NO. 01-18-035-C5-20353 (A), THIS FACT HAS NO RELEVANCY TO THE ISSUE PRESENTLY HERE FOR DECISION. THE CONTRACTS ARE MUTUALLY EXCLUSIVE AND THE OBLIGATION OF YOUR COMPANY TO KEEP UNIFORMITY OF PRICES UNDER YOUR GENERAL SERVICES ADMINISTRATION CONTRACT CANNOT BE PLEADED AS A BAR TO ENFORCEMENT OF THE LEGAL RIGHTS OF THE GOVERNMENT UNDER THE ARMY'S PURCHASE ORDER NO. 01-18-035-C5 20353 (A).

CONCERNING YOUR ADVICE THAT THE SIGNATURE ON IFB NO. MAC (A/-18-035 65- 974 IS AN UNAUTHORIZED SIGNATURE, SINCE ONLY THE BRANCH MANAGER HAS THE AUTHORITY TO SIGN CONTRACTS OR COMMIT THE COMPANY TO BINDING CONTRACTS, THE BID WAS SIGNED ON BEHALF OF YOUR COMPANY BY JAMES B. MITCHELL, BRANCH CED MANAGER OF YOUR LUTHERVILLE, MARYLAND, OFFICE. THE RECORDS INDICATE THAT THIS SAME INDIVIDUAL SIGNED IFB NO. AMC (A/ 18-035-64-872 ON BEHALF OF YOUR COMPANY FOR THE SAME SERVICES FOR THE PREVIOUS YEAR. FURTHERMORE, AT THE TIME OF THE BID OPENING FOR IFB NO. AMC (A/-18-035-65-974, REPRESENTATIVES OF YOUR COMPANY WERE PRESENT BUT FAILED TO GIVE ANY INDICATION THAT THE SIGNER LACKED THE NECESSARY AUTHORITY TO BIND YOUR COMPANY.

IT IS A WELL-ESTABLISHED RULE IN THE LAW OF AGENCY THAT WHEN A PRINCIPAL PERMITS ANOTHER TO ACT ON BUSINESS MATTERS IN HIS NAME, OR APPARENTLY IN HIS BEHALF, THE PRINCIPAL IS BOUND BY THE DOCTRINE OF APPARENT AUTHORITY AS IF THE ACT WAS COMMITTED WITH EXPRESS AUTHORITY (SEE SECTION 277 OF "WILLISTON OF CONTRACTS").

UNDER THE CIRCUMSTANCES PRESENTED THERE IS NO EVIDENCE TO INDICATE THAT THE GOVERNMENT KNEW OF ANY LACK OF AUTHORITY ON THE PART OF MR. MITCHELL. IN FACT, HIS PREVIOUS SIGNING OF AN IFB, AND THE FAILURE OF YOUR REPRESENTATIVES TO DISAVOW THE BID AT BID OPENING, TEND TO AFFIRM HIS APPARENT AUTHORITY. IT, THEREFORE, APPEARS THAT THE ACTION OF YOUR EMPLOYEE IN SIGNING IFB NO. AMC (A/-18-035-65-974 FALLS WITHIN THE APPARENT AUTHORITY RULE, AND THEREFORE PRESENTS NO BAR TO THE LEGAL ENFORCEMENT OF THE PROVISIONS OF PURCHASE ORDER NO. 01-18-035-05-20353 (A) BY THE GOVERNMENT.

ACCORDINGLY, YOU ARE ADVISED THAT WE FIND NO LEGAL BASIS FOR RESCISSION OR REFORMATION OF THE PROVISIONS OF PURCHASE ORDER NO. 01-18 035-C5-20353 (A), AND YOUR REQUEST FOR SUCH ACTION MUST THEREFORE BE DENIED.