B-166509, APR. 15, 1969

B-166509: Apr 15, 1969

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DRIVER: REFERENCE IS MADE TO LETTER DATED MARCH 14. WHICH WAS OPENED ON DECEMBER 19. ONLY THREE BIDS WERE RECEIVED AND THE UNIT PRICES QUOTED. WERE AS FOLLOWS: ITEM NELSON CRANE BRONSON . - 1 $ 55.17 $ 70.56 $106.27 2 148.27 160.72 169.30 3 69.33 64.29 81.30 4 14.55 13.38 18.15 5 50.96 128.87 87.50 6 295.47 139.65 220.55 THE BRONSON BID WAS ON AN "ALL OR NONE" BASIS. THE NELSON BID ON ITEM 5 WAS REJECTED IN VIEW OF THE DETERMINATION BY THE CHIEF. WAS ISSUED TO N.O. SHORTLY THEREAFTER THE CONTRACTING OFFICER WAS ADVISED BY A REPRESENTATIVE OF NELSON THAT A MISTAKE HAD BEEN MADE IN ITS BID ON ITEM 1. THE PRIMARY QUESTION IN THE INSTANT CASE IS NOT WHETHER NELSON MADE AN ERROR IN ITS BID.

B-166509, APR. 15, 1969

TO MR. DRIVER:

REFERENCE IS MADE TO LETTER DATED MARCH 14, 1969, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, YOUR REFERENCE: 134G, CONCERNING THE ALLEGATION BY N. O. NELSON COMPANY OF ARKANSAS OF MISTAKE IN ITS BID, ALLEGED AFTER AWARD OF A CONTRACT TO IT BY THE VA LITTLE ROCK HOSPITAL DIVISION.

SOLICITATION 69-26, WHICH WAS OPENED ON DECEMBER 19, 1968, ASKED FOR BIDS ON SIX ITEMS OF PLUMBING FIXTURES. ONLY THREE BIDS WERE RECEIVED AND THE UNIT PRICES QUOTED, LESS PROMPT PAYMENT DISCOUNT WHERE OFFERED, WERE AS FOLLOWS:

ITEM NELSON CRANE BRONSON

---- ------ ----- ------- 1 $ 55.17 $ 70.56

$106.27 2 148.27 160.72 169.30 3 69.33

64.29 81.30 4 14.55 13.38 18.15 5

50.96 128.87 87.50 6 295.47 139.65 220.55 THE BRONSON BID WAS ON AN "ALL OR NONE" BASIS. THE NELSON BID ON ITEM 5 WAS REJECTED IN VIEW OF THE DETERMINATION BY THE CHIEF, ENGINEERING DIVISION, THAT THE PRODUCT OFFERED DID NOT MEET SPECIFICATIONS.

PURCHASE ORDER NO. 3232, FOR ITEMS 1 AND 2, WAS ISSUED TO N.O. NELSON COMPANY OF ARKANSAS ON DECEMBER 24, 1968. SHORTLY THEREAFTER THE CONTRACTING OFFICER WAS ADVISED BY A REPRESENTATIVE OF NELSON THAT A MISTAKE HAD BEEN MADE IN ITS BID ON ITEM 1, 10 EACH WATER CLOSETS. LETTER DATED DECEMBER 30, 1968, ACCOMPANIED BY A WORKSHEET, NELSON STATED THAT THE COST FOR A CHAIR CARRIER HAD NOT BEEN INCLUDED IN THE UNIT PRICE OF $56.30 QUOTED ON ITEM 1 AND REQUESTED AN INCREASE IN PRICE TO $87.60.

THE PRIMARY QUESTION IN THE INSTANT CASE IS NOT WHETHER NELSON MADE AN ERROR IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE RULE IS WELL SETTLED THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE 8 COMP. GEN. 399; 20 ID. 652, 657, AND CASES CITED THEREIN.

THE RESPONSIBILITY OF PREPARING A BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. THE INVITATION ISSUED IN THIS CASE WAS CLEAR AND UNAMBIGUOUS AS TO WHAT WAS REQUIRED UNDER ITEM 1. WHILE NELSON MAY HAVE FAILED TO INCLUDE AN AMOUNT IN ITS BID FOR A CHAIR CARRIER, IT IS CLEAR THAT SUCH OMISSION WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE COMPANY'S BID WAS UNILATERAL -- NOT MUTUAL -- AND, THEREFORE, WOULD NOT ENTITLE IT TO RELIEF. SEE SALIGMAN, ET AL. V UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V UNITED STATES, 102 CT.CLS. 249, 259. SEE ALSO 26 COMP. GEN. 415 AND 36 ID. 27, 29.

MOREOVER, IT DOES NOT APPEAR THAT AT THE TIME OF EVALUATING BIDS THE CONTRACTING OFFICER HAD ANY MEANS OF KNOWING THAT NELSON'S INTENDED BID WAS OTHER THAN AS STATED IN ITS OFFER, AS THE BID WAS REGULAR ON ITS FACE. FURTHERMORE, WHILE THE PRICE BID BY NELSON ON ITEM 1 WAS LESS THAN THE NEXT LOW BID, WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER SHOULD BE CHARGED WITH NOTICE OF POSSIBLE ERROR IN THE BID IN VIEW OF THE VARIANCE IN BIDS ON OTHER ITEMS, PARTICULARLY ITEM 6, WHERE NELSON WAS SUBSTANTIALLY HIGHER THAN THE LOW BID.

CONSEQUENTLY, SINCE THE CONTRACTING OFFICER WAS WITHOUT NOTICE -- EITHER ACTUAL OR CONSTRUCTIVE -- OF ERROR IN THE COMPANY'S BID, HIS ACCEPTANCE THEREOF WAS IN GOOD FAITH. SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V UNITED STATES, 259 U.S. 75. THE RIGHT WHICH VESTED IN THE GOVERNMENT TO HAVE PERFORMANCE IN STRICT ACCORDANCE WITH ITS TERMS, CANNOT BE GIVEN AWAY OR SURRENDERED BY ANY OFFICER OF THE GOVERNMENT. SEE 18 COMP. GEN. 942, 950.

ACCORDINGLY, YOU ARE ADVISED THAT NO LEGAL BASIS EXISTS FOR RELIEVING NELSON FROM ITS OBLIGATION TO FURNISH THE SUPPLIES INVOLVED FOR THE AMOUNT OF ITS BID PRICE.