B-182299, JAN 27, 1975
Highlights
RECISSION OF CONTRACT FOR SALE OF SURPLUS PROPERTY WHICH WAS DESCRIBED IN IFB AS 160 ACRES WHEREAS SUBSEQUENT TITLE EXAMINATION BY SUCCESSFUL BIDDER REVEALED PROPERTY WAS ONLY 120 ACRES. IS PROPER BECAUSE OF MUTUAL MISTAKE AND IMPOSSIBILITY OF DETERMINING BID PRICE IF PROPERTY HAD BEEN PROPERLY DESCRIBED AND FURTHER. THERE IS NO BASIS TO LIMIT RESOLICITATION TO ORIGINAL BIDDERS ONLY. 660 AND WAS NOTIFIED BY THE FMHA THAT HIS BID HAD BEEN ACCEPTED AND TO HAVE HIS ATTORNEY PREPARE THE APPROPRIATE TITLE INSTRUMENTS TO CONSUMMATE THE SALE. MICHAUD THAT THE SALE WOULD HAVE TO BE COMPLETED AT THE ORIGINAL BID PRICE OR THE CONTRACT WOULD HAVE TO BE RESCINDED AND THE LAND READVERTISED. THE FMHA IS SPECIFICALLY EXEMPTED FROM THE REQUIREMENTS IMPOSED ON MOST FEDERAL AGENCIES BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (40 U.S.C.
B-182299, JAN 27, 1975
RECISSION OF CONTRACT FOR SALE OF SURPLUS PROPERTY WHICH WAS DESCRIBED IN IFB AS 160 ACRES WHEREAS SUBSEQUENT TITLE EXAMINATION BY SUCCESSFUL BIDDER REVEALED PROPERTY WAS ONLY 120 ACRES, IS PROPER BECAUSE OF MUTUAL MISTAKE AND IMPOSSIBILITY OF DETERMINING BID PRICE IF PROPERTY HAD BEEN PROPERLY DESCRIBED AND FURTHER, THERE IS NO BASIS TO LIMIT RESOLICITATION TO ORIGINAL BIDDERS ONLY.
ROBERT R. MICHAUD:
THE FARMERS HOME ADMINISTRATION (FMHA) ADVERTISED A 160 ACRE PARCEL OF LAND FOR SALE. IN RESPONSE TO THE INVITATION FOR BIDS (IFB), MR. ROBERT R. MICHAUD SUBMITTED THE HIGH BID IN THE AMOUNT OF $10,660 AND WAS NOTIFIED BY THE FMHA THAT HIS BID HAD BEEN ACCEPTED AND TO HAVE HIS ATTORNEY PREPARE THE APPROPRIATE TITLE INSTRUMENTS TO CONSUMMATE THE SALE.
DURING THE TITLE EXAMINATION, THE ATTORNEY DISCOVERED THAT THE LAND HAD BEEN MISDESCRIBED IN THE IFB AND ACTUALLY CONSISTED OF 120 ACRES. THE ATTORNEY PRESENTED THESE FACTS TO THE FMHA WITH THE OFFER OF MR. MICHAUD TO REDUCE HIS BID ON THE BASIS OF THE CORRECT ACREAGE. FMHA ADVISED MR. MICHAUD THAT THE SALE WOULD HAVE TO BE COMPLETED AT THE ORIGINAL BID PRICE OR THE CONTRACT WOULD HAVE TO BE RESCINDED AND THE LAND READVERTISED. MR. MICHAUD PROTESTED THIS ACTION TO OUR OFFICE, RENEWING HIS OFFER TO REDUCE HIS BID PRICE OR, IN THE ALTERNATIVE, IF THE PROPERTY MUST BE READVERTISED THAT IT BE LIMITED TO THE ORIGINAL BIDDERS UNDER THE DEFECTIVE SOLICITATION.
THE FMHA IS SPECIFICALLY EXEMPTED FROM THE REQUIREMENTS IMPOSED ON MOST FEDERAL AGENCIES BY THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949 (40 U.S.C. SEC. 471 ET SEQ.) BY 40 U.S.C. SEC. 474(9)(B) (1970). ALSO, THE SECRETARY OF AGRICULTURE HAS PROMULGATED NO DETAILED REGULATIONS REGARDING THE DISPOSAL OF PROPERTY BY THE FMHA. THEREFORE, OUR OFFICE MUST LOOK TO GENERAL CONTRACT LAW AND THE FEDERAL NORM TO DECIDE THIS MATTER. 49 COMP. GEN. 668 (1970).
WE BELIEVE THAT BASED ON THE ABOVE FACTS, A CASE OF MUTUAL MISTAKE AS TO THE AMOUNT OF LAND INVOLVED OCCURRED IN THE FORMATION OF THE CONTRACT.
IT IS WELL ESTABLISHED THAT WHERE BY REASON OF MUTUAL MISTAKE A CONTRACT DOES NOT REFLECT THE ACTUAL AGREEMENT OF THE PARTIES, SUCH MISTAKE IS GROUNDS FOR REFORMING THE CONTRACT IF IT CAN BE ESTABLISHED WHAT THE CONTRACT ACTUALLY WAS OR WOULD HAVE BEEN HAD IT NOT BEEN FOR THE MISTAKE. IF IT IS NOT POSSIBLE TO DETERMINE WHAT THE CONTRACT WOULD HAVE BEEN, THE CONTRACT MAY BE RESCINDED.
RECISSION IS THE PROPER COURSE OF ACTION HERE. WE DO NOT BELIEVE IT IS POSSIBLE TO DETERMINE WHAT PRICE WOULD HAVE BEEN BID FOR THE LAND HAD THE CORRECT ACREAGE BEEN KNOWN. THE BID SUBMITTED BY MR. MICHAUD WAS A LUMP SUM BID, NOT A BID ON A PER ACRE BASIS, WHICH WOULD LEND ITSELF MORE READILY TO REFORMATION.
THEREFORE, THE CONTRACT SHOULD BE RESCINDED AND A RESOLICITATION CONDUCTED UTILIZING A PROPER DESCRIPTION OF THE PROPERTY.
REGARDING THE REQUEST THAT THE RESOLICITATION BE LIMITED TO THOSE BIDDERS WHO TOOK PART IN THE INITIAL IFB, OUR OFFICE IS UNAWARE OF ANY BASIS FOR SUCH AN ACTION. THE RESOLICITATION WOULD HAVE TO BE CARRIED OUT IN ACCORDANCE WITH FMHA REGULATIONS WHICH REQUIRE PUBLIC ADVERTISEMENT THROUGH PUBLIC NOTICES AND NEWSPAPER AND PERIODICAL ADVERTISEMENTS (7 C.F.R. SEC. 1872.65(D)(1) (1974)).
THEREFORE, THE PROTEST IS DENIED.