B-159781, AUG. 9, 1966

B-159781: Aug 9, 1966

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO A LETTER DATED JULY 27. WERE RECEIVED ON JUNE 29. AWARD WAS MADE TO MID ISLAND ON JUNE 30. THE MISTAKE IS ALLEGED TO HAVE OCCURRED IN COMPUTING ITS COST FOR ITEM 1C OF THE INVITATION AND. ITS BID WOULD HAVE BEEN $8. THE WORKSHEET SUBMITTED TO SUBSTANTIATE THE ALLEGED ERROR INDICATES THAT A MISTAKE WAS MADE IN MULTIPLYING THE NUMBER OF LINE POSTS CALLED FOR BY THE UNIT COST. SO THAT THE FIGURE USED IN COMPUTING THE TOTAL BID WAS $1. CORRECTION OF THIS FIGURE WOULD ALSO REQUIRE AN UPWARD ADJUSTMENT OF $100 IN THE PROFIT FIGURE WHICH IS BASED ON 10 PERCENT OF THE MATERIAL COSTS. 610 SUBMITTED BY ANVIL-BELL FENCE COMPANY WHICH BID IS CONTEMPLATED FOR ACCEPTANCE IN THE EVENT THE PRESENT CONTRACT IS CANCELLED.

B-159781, AUG. 9, 1966

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO A LETTER DATED JULY 27, 1966, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING OUR ADVICE ON THE ACTION TO BE TAKEN WITH RESPECT TO A MISTAKE IN BID ALLEGED BY MID- ISLAND FENCE COMPANY, INC., AFTER AWARD TO IT OF CONTRACT NO. 14-10-5-615- 2, FOR CHAIN LINK FENCE AND ACCESSORY MATERIALS.

EIGHT BIDS, RANGING IN PRICE FROM MID-ISLAND'S LOW OF $6,936.92 TO $12,675, WERE RECEIVED ON JUNE 29, 1966, AND AWARD WAS MADE TO MID ISLAND ON JUNE 30, 1966, IN THE AMOUNT OF ITS BID. ON JULY 5 THE CONTRACTOR ADVISED THAT IT HAD MADE A MISTAKE IN ITS BID AND REQUESTED THAT IT EITHER BE PERMITTED TO WITHDRAW ITS BID OR BE RELIEVED OF ITS CONTRACTUAL OBLIGATION BY OTHER APPROPRIATE ACTION. THE MISTAKE IS ALLEGED TO HAVE OCCURRED IN COMPUTING ITS COST FOR ITEM 1C OF THE INVITATION AND, EXCEPT FOR THE MISTAKE, ITS BID WOULD HAVE BEEN $8,036.92. THE WORKSHEET SUBMITTED TO SUBSTANTIATE THE ALLEGED ERROR INDICATES THAT A MISTAKE WAS MADE IN MULTIPLYING THE NUMBER OF LINE POSTS CALLED FOR BY THE UNIT COST, SO THAT THE FIGURE USED IN COMPUTING THE TOTAL BID WAS $1,193.75 RATHER THAN THE CORRECT FIGURE OF $2,193.75. CORRECTION OF THIS FIGURE WOULD ALSO REQUIRE AN UPWARD ADJUSTMENT OF $100 IN THE PROFIT FIGURE WHICH IS BASED ON 10 PERCENT OF THE MATERIAL COSTS. THE CORRECTED FIGURE OF $8,036.92 WOULD MAKE THE MID-ISLAND BID HIGHER THAN THE NEXT LOW BID OF $7,610 SUBMITTED BY ANVIL-BELL FENCE COMPANY WHICH BID IS CONTEMPLATED FOR ACCEPTANCE IN THE EVENT THE PRESENT CONTRACT IS CANCELLED.

IT IS THE DEPUTY ASSISTANT SECRETARY'S OPINION, WITH WHICH WE AGREE, THAT THE EVIDENCE SUBMITTED TENDS TO SUPPORT THE ALLEGATION THAT A MISTAKE WAS MADE IN THE BID. HE ALSO CONCLUDES THAT SINCE THE MID ISLAND BID WAS NEARLY 28 PERCENT BELOW THE AVERAGE OF THE SEVEN OTHER BIDS RECEIVED, THE PROBABILITY OF ERROR WAS SUFFICIENTLY APPARENT TO HAVE REQUIRED A VERIFICATION OF THE BID BY THE CONTRACTING OFFICER PRIOR TO MAKING THE AWARD, WHICH WAS NOT DONE. IT IS THEREFORE THE DEPUTY ASSISTANT SECRETARY'S RECOMMENDATION THAT THE CONTRACT BE CANCELLED AND THE CONTRACTOR BE PERMITTED TO WITHDRAW ITS BID.

THE FUNDAMENTAL QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE BID'S ACCEPTANCE. AT THE TIME OF ACCEPTANCE THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR. NEITHER WAS THERE ANY INDICATION IN THE BID ITSELF THAT AN ERROR HAD BEEN MADE. WE CANNOT AGREE WITH THE ADMINISTRATIVE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE MID-ISLAND BID BY REASON OF IT BEING 28 PERCENT LESS THAN THE AVERAGE OF THE SEVEN OTHER BIDS. AS INDICATED HERETOFORE, THE EIGHT BIDS RECEIVED RANGED FROM A LOW OF $6,936.92 TO A HIGH OF $12,675, AND THEY WERE FAIRLY WELL-SPACED. THE LOW BID OF MID-ISLAND WAS ONLY $673.08 BELOW THE SECOND LOW BID ($7,610). IN VIEW OF THE WIDE RANGE OF THE BIDS RECEIVED AND THE CLOSENESS OF THE TWO LOW BIDS, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE MID-ISLAND BID MERELY BY A COMPARISON OF IT WITH THE AVERAGE PRICE OF ALL BIDS RECEIVED. IN THESE CIRCUMSTANCES, ACCEPTANCE OF THE MID-ISLAND BID WAS IN GOOD FAITH AND WITHOUT NOTICE, ACTUAL OR CONSTRUCTIVE, OF ANY ERROR. THE RESULTING CONTRACT IS, IN OUR OPINION, THEREFORE VALID AND BINDING AND FIXES THE RIGHTS AND OBLIGATIONS OF THE PARTIES. 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 WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 163. WHILE IT APPEARS THAT AN ERROR WAS MADE IN THE BID, IT IS CLEAR THAT SUCH ERROR WAS DUE SOLELY TO MID-ISLAND'S OWN NEGLIGENCE OR OVERSIGHT. ANY ERROR THAT WAS MADE WAS UNILATERAL AND, THEREFORE, DOES NOT ENTITLE MID ISLAND TO RELIEF. SEE 20 COMP. GEN. 652; 26 ID. 415; 39 ID. 36.

SINCE ACCEPTANCE OF THE MID-ISLAND BID CONSUMMATED A VALID AND BINDING CONTRACT, THE RIGHT VESTED IN THE GOVERNMENT TO RECEIVE PERFORMANCE STRICTLY IN ACCORDANCE WITH ITS TERMS, AND, IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO SURRENDER OR WAIVE THAT RIGHT WITHOUT ADEQUATE COMPENSATION. SEE SIMPSON V. UNITED STATES, 172 U.S. 372; UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED, 280 U.S. 574; PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 CT.CL. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 ID. 584, 607.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR RELIEVING THE CONTRACTOR OF ITS CONTRACTUAL OBLIGATIONS. THE ENCLOSURES FORWARDED WITH THE LETTER OF JULY 27 ARE RETURNED.