B-166592, APR. 21, 1969

B-166592: Apr 21, 1969

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JENNINGS: WE HAVE RECEIVED YOUR LETTER OF MARCH 31. IN PARTICULAR OUR ADVICE IS SOUGHT AS TO WHETHER THE BID BOND FURNISHED BY MAX BLAU MUST BE FORFEITED INASMUCH AS HE FAILED TO ACCEPT THE CONTRACT OFFERED OR TO FURNISH THE REQUIRED PERFORMANCE BOND. BIDS WERE OPENED ON JUNE 20. WHILE THE WRITTEN RECORD IS SILENT ON THE MATTER. THE PARTIES CONCERNED AGREE THAT AT THIS POINT IN TIME ORAL DISCUSSIONS TOOK PLACE TO THE EFFECT THAT BLAU WAS LOW BIDDER AND WOULD BE AWARDED THE CONTRACT. BLAU WROTE TO THE CLERK ADVISING THAT ITS BID WAS BASED UPON FURNISHING THE GLOBE WERNICKE FILE AS EQUAL TO THE CORRY- JAMESTOWN COMPANY FILE AND THAT SINCE BID OPENING BLAU HAD BEEN INFORMED BY GLOBE-WERNICKE THAT ITS FILE WAS NOT EQUAL TO THE SPECIFICATIONS OR THE BRAND NAME FILE.

B-166592, APR. 21, 1969

TO MR. JENNINGS:

WE HAVE RECEIVED YOUR LETTER OF MARCH 31, 1969, REQUESTING THE ADVICE OF THIS OFFICE CONCERNING THE BID SUBMITTED BY MAX BLAU CONTRACT FURNITURE, INCORPORATED, TO SUPPLY GROUP IV FILING CABINETS FOR THE CANNON HOUSE OFFICE BUILDING UNDER INVITATION FOR BIDS ON JOB NO. 103, ISSUED BY YOUR OFFICE. IN PARTICULAR OUR ADVICE IS SOUGHT AS TO WHETHER THE BID BOND FURNISHED BY MAX BLAU MUST BE FORFEITED INASMUCH AS HE FAILED TO ACCEPT THE CONTRACT OFFERED OR TO FURNISH THE REQUIRED PERFORMANCE BOND.

THE INVITATION FOR BIDS REQUIRED FILING CABINETS EQUAL TO THE NO. 8F SERIES, AS MANUFACTURED BY CORRY-JAMESTOWN CORPORATION, PRESENTLY IN USE IN SUITE 117 OF THE CANNON HOUSE OFFICE BUILDING. THE INVITATION ALSO REQUIRED BIDDERS TO SUBMIT THE NAME OF THE MANUFACTURER OF PROPOSED FILING CABINETS FOR APPROVAL BY THE CLERK. BIDS WERE OPENED ON JUNE 20, 1968, AND THE LOW BIDDER, BLAU, LISTED THE GLOBE-WERNICKE COMPANY AS THE MANUFACTURER. WHILE THE WRITTEN RECORD IS SILENT ON THE MATTER, THE PARTIES CONCERNED AGREE THAT AT THIS POINT IN TIME ORAL DISCUSSIONS TOOK PLACE TO THE EFFECT THAT BLAU WAS LOW BIDDER AND WOULD BE AWARDED THE CONTRACT. ON JULY 2, 1968, BLAU WROTE TO THE CLERK ADVISING THAT ITS BID WAS BASED UPON FURNISHING THE GLOBE WERNICKE FILE AS EQUAL TO THE CORRY- JAMESTOWN COMPANY FILE AND THAT SINCE BID OPENING BLAU HAD BEEN INFORMED BY GLOBE-WERNICKE THAT ITS FILE WAS NOT EQUAL TO THE SPECIFICATIONS OR THE BRAND NAME FILE. THEREFORE, BLAU REQUESTED PERMISSION TO WITHDRAW ITS BID. ON JULY 17, 1968, THE FORMAL CONTRACT WAS SENT TO BLAU FOR EXECUTION TOGETHER WITH THE REQUIRED PERFORMANCE BOND. BLAU DID NOT SIGN THE CONTRACT OR FURNISH A PERFORMANCE BOND AND THE CLERK HAS BEEN REQUIRED TO PROCURE THE CABINETS FROM ANOTHER SOURCE.

WHILE PARAGRAPH 7 OF THE BIDDING CONDITIONS IN ESSENCE REQUIRES FORFEITURE OF THE BID BOND FOR FAILURE TO EXECUTE A CONTRACT AND PERFORMANCE BOND, IN THE CIRCUMSTANCES PRESENT HERE WE DO NOT BELIEVE FORFEITURE IS REQUIRED. THIS IS TRUE NOTWITHSTANDING THE WARNINGS GIVEN IN PARAGRAPHS 6 AND 10 OF THE INVITATION THAT RELIEF MAY NOT BE OBTAINED FOR ERRORS IN BIDS AND THAT BIDS MAY NOT BE WITHDRAWN AFTER OPENING DUE TO NEGLIGENCE ON THE PART OF THE BIDDER.

PRIOR TO ANY CONTRACT AWARD THE GOVERNMENT WAS GIVEN ACTUAL NOTICE OF BLAU'S UNILATERAL MISTAKE. THEREFORE, BLAU COULD NOT BE REQUIRED TO EXECUTE A CONTRACT NEITHER INTENDED NOR BID ON. (SEE B-164866, DECEMBER 6, 1968.) THE BASIC PROPOSITION THAT A BIDDER MAY BE PERMITTED TO WITHDRAW A BID PRIOR TO AWARD UPON PROOF OF ERROR IS MADE NECESSARY BY THE REQUIREMENT THAT BIDDERS ON GOVERNMENT PROCUREMENTS MUST ALLOW THEIR BIDS TO REMAIN OPEN FOR A STATED MINIMUM PERIOD AFTER BID OPENING, DURING WHICH THEY CANNOT WITHDRAW OR REVOKE THEM AT WILL. SEE REFINING ASSOCIATES, INC. V UNITED STATES, 124 CT. CL. 115. HOWEVER, THE LAW IS CLEAR THAT A BIDDER CANNOT BE BOUND BY AN ACCEPTANCE OF HIS BID WHEN THE PARTY ACCPETING IT IS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, THAT THE BID DOES NOT, BY REASON OF ERROR, STATE THE TRUE INTENT OF THE BIDDER. PERMITTING THE BID TO BE WITHDRAWN OR DISREGARDED IS THUS NECESSARY TO AVOID MAKING UNENFORCEABLE AWARDS, AND THE REQUIREMENT OF PROOF OF ERROR SERVES TO PREVENT BIDDERS FROM TENDERING HASTY, CARELESS OR IRRESPONSIBLE BIDS WITH THE IDEA THAT THEY MAY BE WITHDRAWN AT WILL. THE NOTICE GIVEN PRIOR TO CONTRACT AWARD DISTINGUISHES THIS SITUATION FROM THE CASES RELIED ON BY YOUR ATTORNEY IN REACHING HIS CONCLUSION.

ACCORDINGLY, INASMUCH AS BLAU COULD NOT BE BOUND BY ANY CONTRACT FORCED UPON IT IN THIS INSTANCE, FORFEITURE OF THE BID BOND WOULD NOT BE PROPER. IN SHORT, WE BELIEVE IT IS ONLY THE REFUSAL TO EXECUTE A LEGALLY ENFORCEABLE CONTRACT AND PERFORMANCE BOND THAT REQUIRES THE BID BOND TO BE FORFEITED.