B-162707, NOV. 27, 1967

B-162707, NOV. 27, 1967

CONTRACTS - MISTAKES - RELIEF DECISION TO SECY. OF INTERIOR CONCERNING ACTION TO BE TAKEN ON ERROR IN BID BY CORNER CONSTRUCTION CO. A CONSTRUCTION CONTRACTOR WHO, 51 CALENDAR DAYS PRIOR TO COMPLETION OF A CONSTRUCTION CONTRACT ON WHICH WORK HAD BEGUN THE PREVIOUS JULY, ALLEGES ERROR IN OMISSION OF SUBCONTRACT ITEM OF ELECTRICAL WORK MAY NOT HAVE PRICE INCREASED SINCE REVIEW OF ABSTRACT OF BIDS DOES NOT SHOW THAT LOW BID WAS SO LOW AS TO HAVE PLACED CONTRACTING OFFICER ON NOTICE OF LIKELIHOOD OF ERROR. THEREFORE ACCEPTANCE CONSTITUTED VALID AND BINDING CONTRACT.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 12, 1967, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING OUR DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE CORNER CONSTRUCTION COMPANY ALLEGES IT MADE IN ITS BID UPON WHICH CONTRACT NO. 14-20-0150-891 WAS BASED.

THE BUREAU OF INDIAN AFFAIRS, BRANCH OF PLANT DESIGN AND CONSTRUCTION, ALBUQUERQUE, NEW MEXICO, BY INVITATION NO. BIA-0150-66 45, REQUESTED BIDS FOR THE CONSTRUCTION OF THE PINE RIDGE OFFICE AND QUARTERS, PINE RIDGE, SOUTH DAKOTA. AS MODIFIED BY ADDENDUM NO. 3, THE BID OPENING WAS SCHEDULED FOR 3 P.M., M.S.T., JUNE 2, 1966. THE INVITATION PROVIDED THAT BIDS BE SUBMITTED ON EACH OF TWO BASE PROPOSALS, PROPOSAL NO. 1 WITH ADDITIVE ALTERNATES "A," "B" AND "C" FOR THE OFFICE BUILDING, AND PROPOSAL NO. 2 FOR THE QUARTERS.

ON JUNE 17, 1966, CONTRACT NO. 14-20-0150-891 IN THE LUMP-SUM AMOUNT OF $412,000 (BASE PROPOSAL NO. 1 AND ADDITIVE ALTERNATE "B") WAS AWARDED THE LOW BIDDER, CORNER CONSTRUCTION COMPANY. THE CONTRACT WAS INCREASED BY CHANGE ORDERS NOS. 1 THROUGH 9 TO $416,318.15. UPON ISSUANCE OF THE NOTICE TO PROCEED, THE CONTRACT CONSTRUCTION PERIOD WAS ESTABLISHED AS JULY 7, 1966, THROUGH MAY 2, 1967. THE WORK WAS SUBSTANTIALLY COMPLETED ON MAY 2, 1967, AND THE GOVERNMENT TOOK BENEFICIAL USE OF THE PROJECT ON MAY 15, 1967.

BY LETTER DATED MARCH 13, 1967, ONLY 51 CALENDAR DAYS PRIOR TO THE EXPIRATION DATE OF THE CONTRACT COMPLETION TIME, THE CONTRACTOR ALLEGED THE OMISSION OF $36,365 (ELECTRICAL SUBCONTRACT) FROM ITS BID AS FOLLOWS:

"IN CHECKING OVER OUR TAKE-OFF RECENTLY, WE FIND A GROSS ERROR IN OUR FIGURES, AND ARE WRITING YOU IN HOPES YOU CAN GIVE US SOME RELIEF.

"ENCLOSED IS A PHOTOGRAPHIC COPY OF OUR TAKE-OFF. REFERRING TO PAGE 6, THE LAST ITEM UNDER THE SUBCONTRACTORS, IS THE AMOUNT OF $36,365.00 FOR LUX ELECTRIC. AS YOU CAN SEE, THIS AMOUNT IS NOT TOTALED INTO THE SUB- COLUMN OF $170,527.00. THIS SHOULD HAVE READ $206,892.00. IT WOULD APPEAR THAT THE COLUMN WAS ADDED BEFORE THE PRICE WAS INSERTED.'

THE CONTRACTOR STATED THAT ITS APPROXIMATE COST WAS GOING TO BE $424,061.55 AND REQUESTED RELIEF IN THE AMOUNT OF $12,000 WHICH WOULD BRING ITS ADJUSTED PRICE TO $424,000. THE CONTRACTOR FURTHER STATED THAT IT WOULD SUFFER A LOSS IF AN ADJUSTMENT IN THE CONTRACT PRICE WAS NOT ALLOWED.

IT IS APPARENT FROM AN EXAMINATION OF THE CONTRACTOR'S WORKING PAPERS THAT THE TOTAL FOR THE SUBCONTRACT TOTALS SHOULD HAVE BEEN $206,892 INSTEAD OF THE AMOUNT OF $170,527 SHOWN, OR A $36,365 DIFFERENCE. THE CONTRACTOR SUGGESTS THAT THE ELECTRICAL SUBCONTRACT FIGURE WAS INSERTED AFTER THE COLUMN WAS TOTALED.

THE ONLY QUESTION FOR CONSIDERATION HERE IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. AT THE TIME OF ACCEPTANCE, THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR FROM THE CONTRACTOR. A COMPARISON OF THE LOW BID WITH THE NEXT TWO LOW BIDS AND THE GOVERNMENT ESTIMATE DOES NOT REVEAL ANY SIGNIFICANT PRICE DISCREPANCY. OF THE SIX BIDS RECEIVED ON BASE PROPOSAL NO. 1 AND ALTERNATE "B," THE THREE LOW BIDS AND THE GOVERNMENT ESTIMATE WERE AS FOLLOWS:

BASE

PROPOSAL

BIDDER NO. 1 ALTERNATE "B" TOTAL CORNER CONSTRUCTION

COMPANY $322,000 $90,000 $412,000 THE BREZINA CONSTRUCTION

CO., INC. 339,000 86,000 425,000 L. R. FOY CONSTRUCTION

CO., INC. 356,345 79,800 436,145 GOVERNMENT ESTIMATE 296,711 84,725 381,436

BREZINA'S BID EXCEEDED CORNER'S BID BY ONLY ABOUT 5 PERCENT AND THE DIFFERENCE WAS ONLY ABOUT 3 PERCENT FOR THE BASE PROPOSAL AND THE ALTERNATES. CORNER'S BID FOR THE BASE PROPOSAL WAS ONLY ABOUT 9.5 PERCENT LESS THAN FOY'S AND APPROXIMATELY 7.6 PERCENT LESS FOR THE TOTAL OF THE BASE AND ALTERNATE. IN THE CIRCUMSTANCES, WE AGREE WITH THE ADMINISTRATIVE CONCLUSION THAT CORNER'S BID WAS NOT SO LOW AS TO HAVE PUT THE CONTRACTING OFFICER ON NOTICE OF THE LIKELIHOOD OF ERROR. ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH AND WITHOUT NOTICE, ACTUAL OR CONSTRUCTIVE, OF ANY ERROR. THE RESULTING CONTRACT, IN OUR OPINION, WAS THEREFORE VALID AND BINDING, AND 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.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT. CL. 120, 163. ANY ERROR IN THE BID WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THEREFORE, SUCH ERROR AS WAS MADE IN THE BID WAS UNILATERAL--NOT MUTUAL--AND, THEREFORE, DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND EDWIN DOUGHERTY AND M. H. OGDEN V. UNITED STATES, 102 CT. CL. 249, 259.

WITHOUT A COMPENSATING BENEFIT TO THE UNITED STATES, AGENTS AND OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO DISPOSE OF THE MONEY OR PROPERTY OF THE UNITED STATES, TO MODIFY EXISTING CONTRACTS, OR TO SURRENDER OR WAIVE CONTRACT RIGHTS THAT HAVE VESTED IN THE GOVERNMENT. 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; THE PACIFIC HARDWARE AND STEEL CO. V. UNITED STATES, 49 CT. CL. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 CT. CL. 584, 607.

THE ENCLOSURES TO THE LETTER OF OCTOBER 12, 1967, ARE RETURNED HEREWITH, AND YOU ARE ADVISED THAT UNDER THE FACTS DISCLOSED BY THE RECORD IN THIS CASE WE CAN FIND NO LEGAL BASIS FOR INCREASING THE CONTRACT PRICE ON ACCOUNT OF THE ALLEGED MISTAKE IN BID.