B-182257, NOV 20, 1974

B-182257: Nov 20, 1974

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CONTRACTOR WHO VERIFIED BID PRICE PRIOR TO AWARD AND ALLEGED ERROR AFTER AWARD UPON DISCOVERING WRONG ROOM HAD BEEN MEASURED FOR PAINTING AS RESULT OF CONFUSION INDUCED AND CREATED BY GOVERNMENT PERSONNEL AT PREBID SITE INVESTIGATION IS ENTITLED TO HAVE CONTRACT REFORMED TO ALLOW ADDITIONAL COMPENSATION FOR PAINTING CORRECT CONTRACT AREA. WAS ISSUED BY THE DEPARTMENT OF THE ARMY (ARMY) ON SEPTEMBER 24. BIDS WERE OPENED ON OCTOBER 17. THE SECOND LOW OF THE FOUR BIDS RECEIVED WAS MORE THAN $11. THE CRAWFORD BID WAS ALSO CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE. CRAWFORD WAS REQUESTED TO VERIFY ITS BID WHICH IT DID IN WRITING ON NOVEMBER 9. AWARD WAS MADE TO CRAWFORD ON NOVEMBER 27. THE CONTRACTOR ALLEGED AN ERROR HAD BEEN MADE IN THE PREPARATION OF THE BID IN THAT THE BID PRICE ON ITEM 18 WAS BASED ON MEASUREMENTS TAKEN OF A SMALLER ROOM (SPREADER ROOM) THAN THE ONE (ELECTRICAL BAY) THAT WAS TO BE PAINTED.

B-182257, NOV 20, 1974

CONTRACTOR WHO VERIFIED BID PRICE PRIOR TO AWARD AND ALLEGED ERROR AFTER AWARD UPON DISCOVERING WRONG ROOM HAD BEEN MEASURED FOR PAINTING AS RESULT OF CONFUSION INDUCED AND CREATED BY GOVERNMENT PERSONNEL AT PREBID SITE INVESTIGATION IS ENTITLED TO HAVE CONTRACT REFORMED TO ALLOW ADDITIONAL COMPENSATION FOR PAINTING CORRECT CONTRACT AREA.

CRAWFORD PAINT COMPANY:

INVITATION FOR BIDS (IFB) NO. DACW54-74-B-0008 FOR REPAINTING OF MISCELLANEOUS STRUCTURES AT JOHN H. KERR DAM S. RESERVOIR, VIRGINIA, WAS ISSUED BY THE DEPARTMENT OF THE ARMY (ARMY) ON SEPTEMBER 24, 1973.

THE BIDDING SCHEDULE INCLUDED 19 ITEMS AND PROVIDED FOR A SINGLE AWARD. BIDS WERE OPENED ON OCTOBER 17, 1973. THE CRAWFORD PAINT COMPANY (CRAWFORD) SUBMITTED THE LOW BID AT $18,061. THE SECOND LOW OF THE FOUR BIDS RECEIVED WAS MORE THAN $11,500 HIGHER. THE CRAWFORD BID WAS ALSO CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE. CONSEQUENTLY, CRAWFORD WAS REQUESTED TO VERIFY ITS BID WHICH IT DID IN WRITING ON NOVEMBER 9, 1973. SUBSEQUENTLY, AWARD WAS MADE TO CRAWFORD ON NOVEMBER 27, 1973.

THEREAFTER, ON JANUARY 17, 1974, THE CONTRACTOR ALLEGED AN ERROR HAD BEEN MADE IN THE PREPARATION OF THE BID IN THAT THE BID PRICE ON ITEM 18 WAS BASED ON MEASUREMENTS TAKEN OF A SMALLER ROOM (SPREADER ROOM) THAN THE ONE (ELECTRICAL BAY) THAT WAS TO BE PAINTED. AS A RESULT, CRAWFORD HAD MISTAKENLY UNDERESTIMATED THE PERFORMANCE OF THE WORK IT WAS REQUIRED TO DO UNDER THAT ITEM OF THE CONTRACT.

CRAWFORD SUBMITS THAT THE MISTAKE IN BID WAS THE RESULT OF CONFUSION AT THE PREBID SITE INVESTIGATION. THE CONTRACTING OFFICER ADMITS THAT ARMY PERSONNEL WHO CONDUCTED THE PREBID SITE INVESTIGATION INDUCED AND CONTRIBUTED TO THE CONFUSION AND MISTAKEN ASSUMPTIONS OF THE CONTRACTOR IN REGARD TO WHICH ROOMS WERE TO BE PAINTED.

DESPITE THE COMPLICATIONS WHICH OCCURRED UNDER THE CONTRACT, CRAWFORD DILIGENTLY PROCEEDED WITH THE WORK AND COMPLETED THE JOB IN A WORKMANLIKE MANNER. IT NOW SEEKS TO RECOVER THE DIFFERENCE ($4,736.81) IN COST IN PAINTING THE ELECTRICAL BAY IN LIEU OF THE SPREADER ROOM. A GOVERNMENT COST ESTIMATE INDICATES THE AMOUNT CLAIMED BY THE CONTRACTOR IS REASONABLE. ON THE BASIS OF THE FOREGOING FACTS, THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE CONTRACT BE REFORMED TO ALLOW PAYMENT IN THE AMOUNT OF $3,043. THIS AMOUNT REPRESENTS THE DIFFERENCE BETWEEN THE CRAWFORD BID FOR ITEM 18 ON THE BID SCHEDULE (THE POWER HOUSE INTERIOR) AND THE AMOUNT BID BY THE NEXT LOW BIDDER, MILTOW PAINTING CONTRACTING, INC., FOR THE SAME WORK.

IN B-159064, MAY 11, 1966, OUR OFFICE STATED:

"IT HAS BEEN HELD THAT WHERE, IN CONNECTION WITH A GOVERNMENT CONTRACT, THE GOVERNMENT APPARENTLY NEGLIGENTLY MISSTATED A MATERIAL FACT AND THEREBY MISLED THE PLAINTIFF TO ITS DAMAGE, AND WHERE THE PLAINTIFF WAS NEGLIGENT IS NOT DISCOVERING THE MISSTATEMENT AND ASCERTAINING FOR ITSELF WHAT THE FACTS WERE BEFORE SUBMITTING ITS BID, THE POSITION OF THE PARTIES IS THAT OF PERSONS WHO HAVE MADE A MUTUAL MISTAKE AS TO A MATERIAL FACT RELATING TO THE CONTRACT AND THE COURT SHOULD THEREFORE, IN EFFECT, REFORM THE CONTRACT BY PUTTING THEM IN THE POSITION THEY WOULD HAVE OCCUPIED BUT FOR THE MISTAKE. VIRGINIA ENGINEERING CO., INC. V. THE UNITED STATES, 101 CT. CL. 516. THE GENERAL RULE IS THAT A CONTRACT MADE THROUGH MUTUAL MISTAKE AS TO MATERIAL FACTS MAY EITHER BE RESCINDED OR REFORMED. SEE 12 AM. JUR., CONTRACTS, SEC. 126 AND 17 C.J.S., CONTRACTS, SEC. 144. FURTHER, IT IS AN ADDITIONAL RULE THAT MISTAKE ON ONE SIDE AND MISREPRESENTATION, WHETHER WILFUL OR ACCIDENTAL, ON THE OTHER, CONSTITUTE A GROUND FOR REFORMATION WHERE THE PARTY MISLED HAS RELIED ON THE MISREPRESENTATION OF THE PARTY SEEKING TO BIND HIM. 76 C.J.S., REFORMATION OF INSTRUMENTS, SECTION 29. RESITUTION IN THESE CIRCUMSTANCES MAY BE OBTAINED ON THE PREMISE THAT IT WOULD BE UNJUST TO ALLOW ONE WHO MADE THE MISREPRESENTATION, THOUGH INNOCENTLY, TO RETAIN THE FRUITS OF A BARGAIN WHICH WAS INDUCED, IN WHOLE OR IN PART, BY SUCH MISREPRESENTATION. SEE WILLISTON ON CONTRACTS, REV. ED., SECTIONS 1500 AND 1509 AND THE CASES THEREIN CITED."

ACCORDINGLY, THE CONTRACT MAY BE REFORMED TO ALLOW THE CONTRACTOR ADDITIONAL COMPENSATION FOR THE PERFORMANCE OF THE WORK. SINCE THE IFB PROVIDED FOR A SINGLE AWARD, WE CONCLUDE THAT THE CORRECTION IS NOT LIMITED TO THE DIFFERENCE BETWEEN THE CONTRACT PRICE FOR THE ITEM AND THE NEXT LOW ACCEPTABLE BID FOR THE ITEM. INSTEAD, THE LIMIT IS THE DIFFERENCE BETWEEN THE TOTAL CONTRACT PRICE AND THE TOTAL OF THE NEXT LOW ACCEPTABLE BID. THEREFORE, THE CONTRACT PRICE SHOULD BE ADJUSTED UPWARDS BY $4,736.81.