B-163857, JUN. 24, 1968

B-163857: Jun 24, 1968

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ORLANDO AND KAHN: REFERENCE IS MADE TO YOUR LETTERS OF MARCH 19 AND 29. RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN THE CORPORATION'S BID WHICH IS THE BASIS OF CONTRACT NO. WHICHEVER IS LATER. THE REQUIRED PAINTS WERE LISTED UNDER ITEMS 1 THROUGH 25 AND SUCH ITEMS WERE BROKEN DOWN INTO FIVE GROUPS. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION FOR BIDS THAT AWARDS WOULD BE MADE IN THE AGGREGATE ON THE BASIS OF DOMESTIC PACKING (LEVEL B) ONLY FOR EACH GROUP SHOWN THEREIN. IT IS REPORTED THAT SINCE ADVANCE CHEMICAL'S PRICES FOR ITEMS 6 AND 7 (GROUP 2) WERE APPROXIMATELY 18 PERCENT LOWER THAN THE NEXT LOWEST BID ON THAT GROUP AND BECAUSE PROCUREMENT PERSONNEL FELT THAT ADVANCE CHEMICAL MIGHT HAVE MISUNDERSTOOD THE SPECIFICATIONS.

B-163857, JUN. 24, 1968

TO MAGNER, ABRAHAM, ORLANDO AND KAHN:

REFERENCE IS MADE TO YOUR LETTERS OF MARCH 19 AND 29, 1968, WITH ENCLOSURES, REQUESTING ON BEHALF OF YOUR CLIENT, ADVANCE CHEMICAL CORP., FARMINGDALE, NEW JERSEY, RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN THE CORPORATION'S BID WHICH IS THE BASIS OF CONTRACT NO. TC-GS-09S-23038.

THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION (GSA), SAN FRANCISCO, CALIFORNIA, BY SOLICITATION NO. SP-30534-67 REQUESTED BIDS FOR FURNISHING ESTIMATED QUANTITIES OF VARIOUS TYPES OF PAINTS AS REQUIRED BY THE GSA STORES DEPOTS AT STOCKTON AND BELL, CALIFORNIA, DURING THE PERIOD JUNE 14, 1967, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH JUNE 14, 1968. THE REQUIRED PAINTS WERE LISTED UNDER ITEMS 1 THROUGH 25 AND SUCH ITEMS WERE BROKEN DOWN INTO FIVE GROUPS. PROSPECTIVE BIDDERS WERE ADVISED IN THE INVITATION FOR BIDS THAT AWARDS WOULD BE MADE IN THE AGGREGATE ON THE BASIS OF DOMESTIC PACKING (LEVEL B) ONLY FOR EACH GROUP SHOWN THEREIN. IN RESPONSE TO THE SOLICITATION, THE ADVANCE CHEMICAL CORP. SUBMITTED A BID DATED JUNE 1, 1967, OFFERING TO FURNISH, AMONG OTHER ITEMS, THE PAINT DESCRIBED UNDER ITEMS 6 AND 7, (GROUP 2) AT PRICES OF $3.18 PER GALLON CAN AND $15.90PER FIVE GALLON PAIL, OR AN AGGREGATE TOTAL PRICE OF $4,452 FOR THAT GROUP. THE ABSTRACT OF BIDS SHOWS THAT THE 13 OTHER BIDDERS ON GROUP 2 (ITEMS 6 AND 7) QUOTED AGGREGATE TOTAL PRICES RANGING FROM $5,290 TO $11,035.

IT IS REPORTED THAT SINCE ADVANCE CHEMICAL'S PRICES FOR ITEMS 6 AND 7 (GROUP 2) WERE APPROXIMATELY 18 PERCENT LOWER THAN THE NEXT LOWEST BID ON THAT GROUP AND BECAUSE PROCUREMENT PERSONNEL FELT THAT ADVANCE CHEMICAL MIGHT HAVE MISUNDERSTOOD THE SPECIFICATIONS, THE CORPORATION WAS REQUESTED BY TELEGRAM DATED JUNE 14, 1967, TO CONFIRM ITS BID PRICES ON ITEMS 6 AND 7 AND TO ADVISE WHETHER IT INTENDED TO FURNISH AN ITEM COMPLYING WITH THE SPECIFICATIONS. WHEN NO REPLY WAS RECEIVED FROM ADVANCE CHEMICAL, A SECOND TELEGRAPHIC REQUEST FOR CONFIRMATION WAS SENT BY TELEGRAM DATED JULY 7, 1967. A THIRD REQUEST FOR CONFIRMATION WAS SENT BY TELEGRAM ON JULY 18, 1967, ADVISING ADVANCE CHEMICAL THAT UNLESS A REPLY WAS RECEIVED BY JULY 24, 1967, THE CONTRACTING OFFICE WOULD PROCEED WITH THE AWARD TO THAT CORPORATION. BY TELEGRAM DATED JULY 19, 1967, ADVANCE CHEMICAL ADVISED THAT "PRICE IS CORRECT AS STATED AT ORIGINAL BID.' THE BID OF ADVANCE CHEMICAL WAS ACCEPTED AS TO GROUP 2 (ITEMS 6 AND 7) ON JULY 21, 1967.

BY LETTER DATED SEPTEMBER 7, 1967, ADVANCE CHEMICAL ADVISED THE CONTRACTING OFFICER THAT A PRICING ERROR HAD BEEN MADE BY THE CORPORATION IN COMPUTING ITS BID PRICES FOR ITEMS 6 AND 7 (GROUP 2). THE CORPORATION STATED THAT ITS SUPPLIER HAD INADVERTENTLY QUOTED THE PRICE FOR LEAD CARBONATE PIGMENT FROM ITS 1966 PRICE LIST RATHER THAN FROM ITS 1967 PRICE LIST. ALSO, THE CORPORATION ALLEGED THAT IT HAD SUBSTANTIALLY OVERSTATED "BIDDER'S MONTHLY SUPPLY POTENTIAL.' IN LETTER DATED OCTOBER 27, 1967, THE CORPORATION STATED THAT THE COST OF BASIC CARBONATE OF WHITE LEAD HAD INCREASED FROM $0.105 PER POUND IN 1966 TO $0.205 PER POUND IN 1967. LETTER DATED DECEMBER 9, 1967, THE CORPORATION ADVISED THAT ITS RAW MATERIAL'S COST FOR MANUFACTURING THE PAINT REQUIRED UNDER ITEMS 6 AND 7 (GROUP 2) WOULD BE $3.75 PER GALLON, EXCLUDING THE COST OF FREIGHT, LABOR AND PACKAGING. THE CORPORATION REQUESTED THAT THE CONTRACT BE CANCELED WITHOUT LIABILITY TO IT. IN SUPPORT OF ITS ALLEGATION OF ERROR, ADVANCE CHEMICAL SUBMITTED THE PRINTED LIST OF ITS SUPPLIER, NATIONAL LEAD COMPANY, AND COPIES OF ITS ORIGINAL AND REVISED ESTIMATE SHEETS.

THE RECORD INDICATES THAT WHEN ADVANCE CHEMICAL REFUSED TO HONOR ORDERS PLACED WITH IT FOR THE PAINT CALLED FOR UNDER ITEMS 6 AND 7 (GROUP 2), THE CONTRACTING OFFICER TERMINATED THE CONTRACT FOR DEFAULT; THAT ADVANCE CHEMICAL HAS APPEALED THE CONTRACTING OFFICER'S DECISION TO TERMINATE THE CONTRACT TO THE GENERAL SERVICES ADMINISTRATION (GSA) BOARD OF CONTRACT APPEALS; AND THAT THE BOARD HAS DECIDED TO POSTPONE FURTHER ACTION ON THE APPEAL PENDING OUR DECISION ON YOUR REQUEST FOR RELIEF BECAUSE OF A MISTAKE IN BID ALLEGED AFTER AWARD.

THE SOLE QUESTION HERE FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID OF ADVANCE CHEMICAL, AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. ALLIED CONTRACTORS, INC. V UNITED STATES, 159 CT. CL. 548, 310 F.2D 945. ADVANCE CHEMICAL WAS RESPONSIBLE FOR THE PREPARATION OF ITS BID, AND ANY ERROR THAT MAY HAVE BEEN MADE THEREIN WAS UNILATERAL AND WAS NOT CONTRIBUTED TO BY THE GOVERNMENT. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249; SALIGMAN ET AL. V UNITED STATES, 56 F.SUPP. 505. SEE, ALSO, 26 COMP. GEN. 415 AND 36 ID. 27. THE RECORD ESTABLISHES THAT THE GOVERNMENT DID ALL THAT WAS REQUIRED OF IT TO ASCERTAIN THE CORRECTNESS OF THE BID OF ADVANCE CHEMICAL WHEN IT WAS REQUESTED THREE TIMES TO CONFIRM ITS BID PRICES AND TO VERIFY WHETHER THE ITEM IT PROPOSED TO FURNISH WOULD MEET THE REQUIREMENTS OF THE SPECIFICATIONS. IT IS UNFORTUNATE THAT ADVANCE CHEMICAL WAS FURNISHED AN INCORRECT PRICE BY ITS SUPPLIER. IT WAS NOT UNTIL AFTER ADVANCE CHEMICAL UNEQUIVOCALLY CONFIRMED ITS BID THAT THE CONTRACTING OFFICER CONSIDERED IT CORRECT AND PROPER FOR AWARD. HAD THE CONTRACTING OFFICER THEREAFTER NOT AWARDED THE CONTRACT TO ADVANCE CHEMICAL AS THE LOWEST RESPONSIBLE BIDDER, HE WOULD HAVE BEEN DERELICT IN HIS DUTY TO THE GOVERNMENT. SEE CARNEGIE STEEL CO. V CONNELLY, 97 A.774; SHRIMPTON MFG. CO. V BRIN, 125 S.W. 942; ALABAMA SHIRT AND TROUSER CO. V UNITED STATES, 121 CT. CL. 313; 37 COMP. GEN. 786.

THE ACCEPTANCE, AFTER CONFIRMATION, OF THE BID OF ADVANCE CHEMICAL WAS IN GOOD FAITH -- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD -- AND UNDER THE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RIGHT OF THE GOVERNMENT TO RECEIVE PERFORMANCE IN STRICT ACCORDANCE WITH THE CONTRACT TERMS MAY NOT BE WAIVED BY ANY OFFICER OF THE GOVERNMENT IN THE ABSENCE OF ADEQUATE CONSIDERATION, AND CONSIDERATIONS OF SYMPATHY FOR POSSIBLE HARDSHIPS OR MISFORTUNES TO THE CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE. SEE 22 COMP. GEN. 260; DAY V UNITED STATES, 245 U.S. 159.

ACCORDINGLY, FOR THE FOREGOING REASONS NO VALID BASIS APPEARS FOR RELIEVING ADVANCE CHEMICAL FROM ITS OBLIGATIONS UNDER CONTRACT NO. TC GS- 09S-23038.