B-165766, JAN. 17, 1969

B-165766: Jan 17, 1969

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ASKING WHETHER THIS OFFICE WILL CONSIDER A CLAIM FOR THE CORRECTION OF A MISTAKE IN BID FROM CONTINENTAL WIRE CORPORATION (CWC). DETERMINED THAT CWC'S CLAIM WAS ACTUALLY FOR THE CORRECTION OF A MISTAKE IN BID. ONLY THOSE CONTRACTORS PERFORMING DIRECTLY FOR THE GOVERNMENT HAVE PRIVITY OF CONTRACT WITH THE GOVERNMENT. WHICH RELATIONSHIP IS THE BASIS FOR PERMITTING THE CONTRACTOR TO CLAIM AGAINST THE GOVERNMENT FOR THE CORRECTION OF BID MISTAKES. WHILE IT IS RECOGNIZED THAT IT CAN BE ARGUED THAT REECO'S ACTIVITIES ARE SO CLOSELY ASSOCIATED WITH THE GOVERNMENT'S MANAGEMENT OF THE INSTALLATION THAT REECO MAY BE CONSIDERED THE GOVERNMENT'S AGENT FOR MANY PURPOSES. WE HAVE READ THE DECISION OF THE ATOMIC ENERGY COMMISSION BOARD OF CONTRACT APPEALS OF AUGUST 8.

B-165766, JAN. 17, 1969

TO PAUL M. TRUEGER AND COMPANY:

WE REFER TO YOUR LETTER OF DECEMBER 4, 1968, ASKING WHETHER THIS OFFICE WILL CONSIDER A CLAIM FOR THE CORRECTION OF A MISTAKE IN BID FROM CONTINENTAL WIRE CORPORATION (CWC), A SECOND TIER SUBCONTRACTOR UNDER REYNOLDS ELECTRICAL AND ENGINEERING COMPANY, INCORPORATED (REECO), PRIME CONTRACT NO. AT-/29-2/-162 TO PROVIDE NECESSARY SUPPORT SERVICES TO THE UNITED STATES ATOMIC ENERGY COMMISSION'S NEVADA TEST SITE AT MERCURY, NEVADA, ON A COST-PLUS-FIXED-FEE BASIS, WHEN CORRECTION HAS BEEN PREVIOUSLY DENIED BY THE ATOMIC ENERGY COMMISSION BOARD OF CONTRACT APPEALS IN ITS DECISION NO. AECBCA 41-2-67, DATED AUGUST 8, 1967.

ACCORDING TO THE BOARD'S DECISION, CWC ACTED AS A SUPPLIER OF SPECIALLY PREPARED CABLE TO GENERAL ELECTRIC SUPPLY COMPANY (GESCO) UNDER ITS CONTRACT WITH REECO FOR CERTAIN WORK AT THE NEVADA TEST SITE. GESCO PRESENTED CWC'S CLAIM TO THE BOARD AS A REQUEST FOR AN EQUITABLE ADJUSTMENT STEMMING FROM A CONSTRUCTIVE CHANGE IN THE SPECIFICATIONS. THE BOARD, IN ITS DECISION OF AUGUST 8, 1967, DETERMINED THAT CWC'S CLAIM WAS ACTUALLY FOR THE CORRECTION OF A MISTAKE IN BID, HEARD THE CASE ON THAT BASIS, AND DENIED RELIEF ON THE MERITS.

AS A GENERAL RULE, ONLY THOSE CONTRACTORS PERFORMING DIRECTLY FOR THE GOVERNMENT HAVE PRIVITY OF CONTRACT WITH THE GOVERNMENT, WHICH RELATIONSHIP IS THE BASIS FOR PERMITTING THE CONTRACTOR TO CLAIM AGAINST THE GOVERNMENT FOR THE CORRECTION OF BID MISTAKES.

WHILE IT IS RECOGNIZED THAT IT CAN BE ARGUED THAT REECO'S ACTIVITIES ARE SO CLOSELY ASSOCIATED WITH THE GOVERNMENT'S MANAGEMENT OF THE INSTALLATION THAT REECO MAY BE CONSIDERED THE GOVERNMENT'S AGENT FOR MANY PURPOSES, INCLUDING PRIVITY OF CONTRACT, THAT QUESTION NEED NOT BE CONSIDERED IN THIS PARTICULAR CASE.

AS INDICATED ABOVE, WE HAVE READ THE DECISION OF THE ATOMIC ENERGY COMMISSION BOARD OF CONTRACT APPEALS OF AUGUST 8, 1967, DENYING CWC'S CLAIM AND WE WITH TO STATE THAT THE BOARD'S POSITION ON THE LAW GOVERNING THE CORRECTION OF ERRORS IN BID PREPARATION APPEARS TO ACCORD WITH THIS OFFICE'S VIEWS. IN 47 COMP. GEN. 616, 620, WE SAID:

"* * * THE SOLE QUESTION HERE FOR CONSIDERATION IS NOT WHETHER MISTAKES WERE MADE IN THE BID OF BUCK AND DONOHUE, INCORPORATED, AS HAVE BEEN ALLEGED, BUT WHETHER, A BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THAT COMPANY'S BID. ALLIED CONTRACTORS, INC. V UNITED STATES, 159 CT.CL. 548, 310 F.2D 945.' WE THINK THE PRINCIPLE OF THAT DECISION APPLIES HERE.

IT IS THEREFORE OUR OPINION THAT THE BOARD'S DECISION WAS CORRECT ON THE MERITS OF THE APPEAL AND THAT IT WOULD SERVE NO USEFUL PURPOSE FOR YOU TO PURSUE THIS MATTER FURTHER WITH OUR OFFICE.