B-165278, NOV. 6, 1968

B-165278, NOV. 6, 1968

TO GEORGE E. JENSEN CONTRACTOR, INC.:

WE REFER TO YOUR LETTER, WITH ENCLOSURES, DATED SEPTEMBER 16, 1968, IN WHICH YOU REQUEST RELIEF FROM AN ALLEGEDLY ERRONEOUS BID UPON WHICH YOU WERE AWARDED CONTRACT N62467-67-C-0410 FOR IMPROVEMENTS TO THE CENTRAL REPAIR SHOP OF THE UNITED STATES MARINE CORPS SUPPLY CENTER, ALBANY, GEORGIA.

WE DO NOT THINK IT IS NECESSARY TO REVIEW IN DETAIL THE HISTORY OF THE ALLEGED ERROR. SUFFICE IT TO SAY THAT THE PROJECT REQUIRED A NUMBER OF "LUCALOX" LAMPS. A MANUFACTURER'S REPRESENTATIVE QUOTED PRICES ON MERCURY VAPOR LAMPS WHICH APPEAR TO BE SIGNIFICANTLY LESS EXPENSIVE THAN THE ,LUCALOX" VARIETY. THIS QUOTATION WAS ACCEPTED BY THE COMPANY SUPPLYING ELECTRICAL MATERIALS TO THE ELECTRICAL SUBCONTRACTOR. THE ERRONEOUS QUOTATION EVENTUALLY FORMED AN ELEMENT IN YOUR OVERALL BID PRICE.

BIDS WERE OPENED ON JUNE 4, 1968, AND THE ABSTRACT DISCLOSES THAT FOUR BIDS WERE RECEIVED. YOUR BID WAS LOW AT THE AMOUNT OF $668,683; THE SECOND LOW BID WAS IN THE AMOUNT OF $706,000. THE TWO REMAINING BIDS WERE $716,420 AND $784,731. ALL FOUR BIDS WERE CONSIDERABLY ABOVE THE GOVERNMENT ESTIMATE OF $544,704. IT IS READILY SEEN THAT THE DIFFERENCE BETWEEN YOUR BID AND THE GOVERNMENT ESTIMATE ($113,979) IS MUCH GREATER THAN THAT BETWEEN YOUR BID AND THE NEXT LOW BID ($37,317). THE CONTRACTING OFFICER DID NOT REGARD THIS PRICE DIFFERENTIAL OF SUCH MAGNITUDE AS TO HAVE REQUIRED A VERIFICATION OF YOUR BID.

NOTICE OF AWARD WAS ISSUED ON JULY 7, 1968. THEREAFTER, BY A LETTER DATED AUGUST 28, 1968, YOU INFORMED THE RESPONSIBLE CONTRACTING OFFICIAL OF THE ERROR IN QUOTATION ON THE LIGHTING FIXTURES. YOU REQUESTED THAT A CHANGE ORDER IN THE AMOUNT OF $36,000 BE ISSUED BUT SINCE THE ERROR HAD NOT BEEN ALLEGED UNTIL AFTER AWARD, THE REQUESTED RELIEF WAS DENIED BY THE CONTRACTING AGENCY.

IT IS THE GENERAL RULE THAT ONCE THE GOVERNMENT HAS ACCEPTED A BID, A BINDING CONTRACT IS FORMED AND THE CONTRACTOR MUST BEAR THE CONSEQUENCES OF HIS OWN MISTAKE. SALIGMAN V UNITED STATES, 56 F.SUPP. 505 (E.D. PA. 1944); 27 COMP. GEN. 724 (1948). HOWEVER, A VALID CONTRACT IS NOT CREATED WHEN THE BID IS ACCEPTED WITH ACTUAL OR CONSTRUCTIVE NOTICE OF AN ERROR THEREIN. 37 COMP. GEN. 706 (1958). THE ERROR HERE WAS NOT BROUGHT TO THE CONTRACTING OFFICER'S ATTENTION UNTIL AFTER THE BID WAS ACCEPTED, AND, THEREFORE, THE QUESTION IS NOT ONE OF ACTUAL NOTICE. THE ISSUE IS RATHER WHETHER THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF AN ERROR IN YOUR BID AND SHOULD HAVE REQUESTED A VERIFICATION OF YOUR BID PRICE.

ON THE BASIS OF THE RECORD BEFORE US, IT APPEARS THAT ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH. IT HAS BEEN OBSERVED THAT YOUR BID WAS MORE CLOSELY IN LINE WITH THE RANGE OF THE OTHER BIDS THAN WITH THE GOVERNMENT ESTIMATE. ALL THE BIDS WERE IN EXCESS OF THE ESTIMATE. THERE HAS BEEN OFFERED NO EVIDENCE TO SUGGEST THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ALERT TO THE POSSIBILITY OF AN ERROR IN YOUR BID. COMPARISON OF THE ESTIMATE AND THE SCALE OF PRICES ACTUALLY BID INDICATES THAT ACCEPTANCE OF YOUR BID WITHOUT VERIFICATION WAS REASONABLE UNDER THESE CIRCUMSTANCES. THEREFORE, A VALID AND BINDING CONTRACT WAS FORMED AND THE RIGHTS OF THE PARTIES WERE FIXED THEREBY. EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249 (1944); SALIGMAN V UNITED STATES, SUPRA. ..END :