B-160379, DEC. 7, 1966

B-160379: Dec 7, 1966

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO LETTER 134G DATED OCTOBER 31. HAS ALLEGED IT MADE IN ITS BID UPON WHICH CONTRACT V5119C-51 IS BASED. THE INVITATION FOR PROJECT NA-66-5 (WHICH BECAME CONTRACT V5119C 51) WAS ISSUED MAY 27. THREE ITEMS ARE LISTED IN THE INVITATION BUT AWARD WAS MADE ONLY OF ITEM I WHICH CALLED FOR 100 WINDOWS. THE FIVE BIDS RECEIVED ON THIS ITEM WERE $21. ALL BIDS RECEIVED WERE RESPONSIVE TO THE SPECIFICATIONS. THE GOVERNMENT ESTIMATE ON ITEM I WAS $25. WAS BASED UNKNOWINGLY ON DH-A3H ALUMINUM WINDOWS. WHEN THE DH-A3H ALUMINUM WINDOWS WERE INSTALLED IN BUILDING 20 AND THE PRESENT PROCUREMENT. WAS INFORMALLY ADVISED BY THE PREVIOUS SUPPLIER THAT THE WINDOWS PREVIOUSLY INSTALLED MET THE AMERICAN STANDARDS ASSOCIATION DH-A4H SPECIFICATIONS.

B-160379, DEC. 7, 1966

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO LETTER 134G DATED OCTOBER 31, 1966, FROM MR. CLYDE C. COOK, FOR THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION CONCERNING AN ERROR STYRON CONSTRUCTION COMPANY, INC. HAS ALLEGED IT MADE IN ITS BID UPON WHICH CONTRACT V5119C-51 IS BASED.

THE INVITATION FOR PROJECT NA-66-5 (WHICH BECAME CONTRACT V5119C 51) WAS ISSUED MAY 27, 1966, REQUESTING BIDS TO PERFORM ALL WORK OF GENERAL CONSTRUCTION IN REMOVAL OF EXISTING WINDOWS, IN ADDITION TO FURNISHING AND INSTALLING ALUMINUM WINDOWS MEETING THE AMERICAN STANDARDS ASSOCIATION, INC., SPECIFICATIONS DH-A4H FOR WINDOWS AT THE VETERANS ADMINISTRATION HOSPITAL, ALBUQUERQUE, NEW MEXICO. FIVE OF 13 FIRMS SOLICITED RESPONDED TO THE INVITATION. THREE ITEMS ARE LISTED IN THE INVITATION BUT AWARD WAS MADE ONLY OF ITEM I WHICH CALLED FOR 100 WINDOWS. THE FIVE BIDS RECEIVED ON THIS ITEM WERE $21,458, $22,068, $23,800, $23,844 AND $38,207. ALL BIDS RECEIVED WERE RESPONSIVE TO THE SPECIFICATIONS. THE GOVERNMENT ESTIMATE ON ITEM I WAS $25,000. THE RESIDENT ENGINEER'S ESTIMATE IN ARRIVING AT THIS FIGURE, HOWEVER, WAS BASED UNKNOWINGLY ON DH-A3H ALUMINUM WINDOWS, 103 OF WHICH HAD BEEN PURCHASED IN 1964 FROM A SUPPLIER WHO DID NOT BID ON THE PRESENT INVITATION BUT INSTEAD QUOTED PRICES TO EACH OF THE FIVE FIRMS BIDDING. THERE HAD BEEN A CHANGE IN RESIDENT ENGINEERS BETWEEN THE PREVIOUS INSTALLATION IN 1964, WHEN THE DH-A3H ALUMINUM WINDOWS WERE INSTALLED IN BUILDING 20 AND THE PRESENT PROCUREMENT. THE PRESENT ENGINEER, PRIOR TO PREPARING SPECIFICATIONS FOR THE PRESENT PROJECT, WAS INFORMALLY ADVISED BY THE PREVIOUS SUPPLIER THAT THE WINDOWS PREVIOUSLY INSTALLED MET THE AMERICAN STANDARDS ASSOCIATION DH-A4H SPECIFICATIONS. CONSEQUENTLY, THE ENGINEER BASED THE GOVERNMENT ESTIMATE UPON THE PREVIOUS PURCHASE PRICE AND ERRONEOUSLY INDICATED TO PROSPECTIVE BIDDERS THAT THE WINDOW PREVIOUSLY INSTALLED MET SPECIFICATIONS. WHEN THE ISSUE AROSE DURING PERFORMANCE OF THE CONTRACT AS TO WHICH TYPE OF WINDOW THE CONTRACTOR WAS TO FURNISH, THE CONTRACTOR SUBMITTED LETTERS FROM THE OTHER BIDDERS STATING THAT THEY BASED THEIR BID PRICES ON THE DH-A3H WINDOW BY REASON OF THE ADVICE FURNISHED AND BECAUSE THE DH-A4H WINDOW WAS OF LIMITED MANUFACTURE AND SEASONALLY UNAVAILABLE. A PARTIAL DELIVERY OF THE WINDOWS AND FRAME MEMBERS HAS BEEN REJECTED AS NOT MEETING THE SPECIFICATIONS, THE FRAME MEMBERS THICKNESS BEING 3 11/16 INCHES INSTEAD OF THE 4 INCHES REQUIRED BY THE SPECIFICATIONS. THE CLAIM OF MISTAKE IN BID RESULTED FROM THIS REJECTION BY THE STATION ENGINEER'S OFFICE. IT IS INFORMALLY REPORTED THAT THE DH-A3H WINDOW WILL SATISFY THE ESSENTIAL REQUIREMENTS OF THE HOSPITAL IN THAT IT IS, IN FACT, IN EXCESS OF THE REQUIREMENTS. HOWEVER, THE RESIDENT ENGINEER HAS INDICATED THAT THE DH- A4H WINDOW WAS SPECIFIED BECAUSE THE WIND AND DUST THAT IS EXPERIENCED DEMAND THE BEST TYPE OF WINDOW AVAILABLE COMMERCIALLY.

THE INVITATION WAS CLEAR THAT A DH-A4H WINDOW WAS REQUIRED. THE BID WAS REGULAR ON ITS FACE AND WAS WITHIN THE RANGE OF OTHER BIDS AND THE GOVERNMENT'S ESTIMATE WHICH AT THE TIME OF EVALUATION WAS NOT KNOWN TO BE ERRONEOUS. THEREFORE, THERE WAS NOTHING TO MAKE THE CONTRACTING OFFICER SUSPECT THAT THE BID WAS NOT MADE AS INTENDED. THE ACCEPTANCE OF THE BID WAS THEREFORE IN COMPLETE GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. THERE IS THUS NO LEGAL BASIS FOR CONTRACT REFORMATION BECAUSE OF THE MISTAKE.

PARAGRAPH 1 OF "INSTRUCTIONS TO BIDDERS," STANDARD FORM 22 (41 CFR 1- 16.901.22) INCORPORATED BY REFERENCE IN THE BID FORM, PROVIDES AS FOLLOWS:

"EXPLANATIONS TO BIDDERS. ANY EXPLANATION DESIRED BY A BIDDER REGARDING THE MEANING OR INTERPRETATION OF THE INVITATION FOR BIDS, DRAWINGS, SPECIFICATIONS, ETC., MUST BE REQUESTED IN WRITING AND WITH SUFFICIENT TIME ALLOWED FOR A REPLY TO REACH BIDDERS BEFORE THE SUBMISSION OF THEIR BIDS. ANY INTERPRETATION MADE WILL BE IN THE FORM OF AN AMENDMENT OF THE INVITATION FOR BIDS, DRAWINGS, SPECIFICATIONS, ETC., AND WILL BE FURNISHED TO ALL PROSPECTIVE BIDDERS. ITS RECEIPT BY THE BIDDER MUST BE ACKNOWLEDGED IN THE SPACE PROVIDED ON THE BID FORM (STANDARD FORM 21) OR BY LETTER OR TELEGRAM RECEIVED BEFORE THE TIME SET FOR OPENING OF BIDS. ORAL EXPLANATIONS OR INSTRUCTIONS GIVEN BEFORE THE AWARD OF THE CONTRACT WILL NOT BE BINDING.'

IN THE CIRCUMSTANCES, THE STATEMENTS MADE BY THE RESIDENT ENGINEER WHICH CONFLICT WITH THE PROVISIONS OF THE CONTRACT ARE NOT BINDING UPON THE GOVERNMENT. SEE JACOB RICHTMAN V. UNITED STATES, 47 CT.CL. 483. COMPARE STAR WOOLEN COMPANY V. UNITED STATES, 309 F.2D 409 AND MONTREAL SECURITIES, INC. V. UNITED STATES, 329 F.2D 956. ACCORDINGLY, THE ORAL STATEMENT BY THE ENGINEER MODIFYING OR CHANGING THE CONDITIONS OF THE INVITATION AND SPECIFICATION CONFERS NO RIGHT UPON THE CONTRACTOR. THEREFORE APPEARS THAT THE CONTRACTOR LEGALLY MAY BE HELD TO PERFORM IN ACCORDANCE WITH THE CONTRACT'S TERMS AND REQUIRED TO DELIVER DH-A4H WINDOWS.

IF, HOWEVER, IT IS DEFINITELY DECIDED THAT THE DH-A3H WINDOW WILL SATISFACTORILY MEET THE NEEDS OF THE GOVERNMENT, AN APPROPRIATE CHANGE ORDER MAY BE ISSUED UNDER THE "CHANGES" PROVISION OF THE CONTRACT. THAT CONNECTION, IT SHOULD BE OBSERVED THAT OUR OFFICE AND THE COURT OF CLAIMS HAS HELD THAT THE GOVERNMENT IS ENTITLED TO AN EQUITABLE ADJUSTMENT IN THE CONTRACT PRICE NOTWITHSTANDING THE FEATURE BEING ELIMINATED BY THE CHANGE ORDER WAS NOT INCLUDED IN THE BID PRICE THROUGH ERROR. S. N. NIELSEN COMPANY V. UNITED STATES, 141 CT.CL. 793 AND B-148834, SEPTEMBER 13, 1965.

THE FILE SUBMITTED WITH THE REQUEST FOR DECISION IS RETURNED AS REQUESTED.