B-193934, JUN 15, 1979

B-193934: Jun 15, 1979

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DIGEST: REFORMATION OF PURCHASER ROAD CREDIT IS NOT PROPER EVEN THOUGH AGENCY MADE ERROR IN ADDING TOTAL CREDITS SINCE ERROR COULD EASILY HAVE BEEN DETECTED FROM CONTRACT DOCUMENTS AND CLAIMANT WAS NOT INDUCED BY ERROR TO EXPEND MORE THAN IT PLANNED ON ROAD CONSTRUCTION. UNDER THE TERMS OF THE TIMBER SALE WEST WAS TO CONSTRUCT CERTAIN ROADS INCLUDING ROAD NO. 147. 402 WAS AVAILABLE FOR THIS PURPOSE. AFTER THE SALE CONTRACT WAS AWARDED TO WEST IT DISCOVERED THAT THE PURCHASER ROAD CREDIT WAS INCORRECTLY CALCULATED. SECTIONS A-10 AND A-11 OF THE CONTRACT SHOW THAT AN ERROR WAS MADE IN ADDING TWO COMPONENTS (ITEM A. THE PURCHASER ROAD CREDIT FOR ROAD NO. 147 SHOULD HAVE BEEN $295. 608 AS LISTED AND THE TOTAL PURCHASER ROAD CREDIT SHOULD HAVE BEEN $626.

B-193934, JUN 15, 1979

DIGEST: REFORMATION OF PURCHASER ROAD CREDIT IS NOT PROPER EVEN THOUGH AGENCY MADE ERROR IN ADDING TOTAL CREDITS SINCE ERROR COULD EASILY HAVE BEEN DETECTED FROM CONTRACT DOCUMENTS AND CLAIMANT WAS NOT INDUCED BY ERROR TO EXPEND MORE THAN IT PLANNED ON ROAD CONSTRUCTION.

WEST COAST ORIENT CO.:

THE FOREST SERVICE OF THE DEPARTMENT OF AGRICULTURE HAS REQUESTED OUR DECISION ON WHETHER WEST COAST ORIENT CO. (WEST) CAN BE PAID AN ADDITIONAL $10,099 UNDER THE PURCHASER ROAD CREDIT PROVISIONS OF THE WINSTON TIMBER SALE CONTRACT NO. 02620-0. THE FOREST SERVICE ADMITS IT MADE A MISTAKE IN TOTALING THE APPLICABLE CREDITS IN THE TIMBER SALE PROSPECTUS AND CONTRACT BUT RECOMMENDS THAT THE CLAIM BE DENIED.

UNDER THE TERMS OF THE TIMBER SALE WEST WAS TO CONSTRUCT CERTAIN ROADS INCLUDING ROAD NO. 147. BOTH THE CONTRACT AND THE PROSPECTUS FOR THE SALE INDICATED THAT A TOTAL PURCHASER ROAD CREDIT OF $616,402 WAS AVAILABLE FOR THIS PURPOSE. AFTER THE SALE CONTRACT WAS AWARDED TO WEST IT DISCOVERED THAT THE PURCHASER ROAD CREDIT WAS INCORRECTLY CALCULATED. SECTIONS A-10 AND A-11 OF THE CONTRACT SHOW THAT AN ERROR WAS MADE IN ADDING TWO COMPONENTS (ITEM A, $148,775 AND ITEM R, $326) WHICH MAKE UP THE BASE WORK FOR ROAD NO. 147. WHEN ADDED CORRECTLY THE BASE WORK FOR ROAD NO. 147 SHOULD BE $149,102 NOT $139,002 AS LISTED IN SECTION A-10 OF THE CONTRACT. CONSEQUENTLY, THE PURCHASER ROAD CREDIT FOR ROAD NO. 147 SHOULD HAVE BEEN $295,617 NOT $285,608 AS LISTED AND THE TOTAL PURCHASER ROAD CREDIT SHOULD HAVE BEEN $626,501.

THE FOREST SERVICE RECOMMENDS THAT WEST'S CLAIM OF $10,099 BE DENIED, IN PART, BECAUSE WEST SHOULD HAVE DISCOVERED THE ERROR IN THE CONTRACT DOCUMENTS PRIOR TO SIGNING THE INSTRUMENT.

IN A RECENT DECISION, TIMBER INVESTORS, INC. V. UNITED STATES (CT.CL. 61-75, NOVEMBER 15, 1978) THE COURT OF CLAIMS CONSIDERED THE RELATIONSHIP OF THE PRINCIPLE OF MUTUAL MISTAKE TO AN ERROR IN THE CALCULATION OF THE PURCHASER ROAD CREDIT IN A TIMBER SALE CONTRACT. THE COURT HELD THAT A MUTUAL MISTAKE JUSTIFYING REFORMATION WOULD EXIST WHERE THE PURCHASER AND THE FOREST SERVICE BELIEVED THAT THE ESTIMATES WERE REASONABLY ACCURATE AND WHERE, IN FACT, PERFORMANCE SHOWED UNREASONABLY INACCURATE ESTIMATES DUE TO A MISTAKE ON THE FOREST SERVICE'S PART. SEE ALSO SIERRA PACIFIC INDUSTRIES - RECONSIDERATION, B-193399, APRIL 5, 1979, 58 COMP.GEN. , 79-1 CPD 238. HOWEVER THE COURT SPECIFICALLY LIMITED ITS DECISION TO SITUATIONS WHERE THE ERRANT ESTIMATE COULD NOT BE READILY VERIFIED BY THE CONTRACTOR. IN THIS REGARD THE COURT HELD, "THIS DOES NOT MEAN, HOWEVER, THAT PLAINTIFF AND ITS SUBCONTRACTOR CAN SHUT THEIR EYES WITH REFERENCE TO A PARTICULAR COST ESTIMATE WHICH COULD EASILY BE VERIFIED BY MERELY CONTACTING A LOCAL SUPPLIER. A BIDDER MUST ACT REASONABLY IN RELYING ON ESTIMATES." TIMBER INVESTORS, INC. V. UNITED STATES, SUPRA, AT PAGE 9.

HERE, WEST COULD HAVE EASILY CHECKED THE ACCURACY OF THE FOREST SERVICE CALCULATIONS BY MERELY READING THE CONTRACT DOCUMENTS IT WAS CALLED UPON TO SIGN. ALSO THIS ERROR IS NOT LIKE THAT IN TIMBER INVESTORS OR SIERRA PACIFIC WHERE A MISTAKE IS MADE IN THE ESTIMATE OF THE AMOUNT OF WORK NEEDED TO BUILD THE ROAD AND THE CONTRACTOR DOES NOT DISCOVER THE ERROR UNTIL IT HAS SPENT MORE THAN THE PURCHASER CREDIT AMOUNT TO BUILD THE ROAD. IN THIS INSTANCE WEST DOES NOT DISPUTE THE AGENCY'S ESTIMATES OF THE AMOUNT OF WORK INVOLVED. ALSO WEST DOES NOT ARGUE THAT THE TOTAL ESTIMATE WAS GROSSLY ERRONEOUS OR THAT IT WAS MISLED INTO SIGNING THE CONTRACT BECAUSE OF THE ESTIMATE. IT MERELY INSISTS THAT SINCE THE FOREST SERVICE MADE AN ERROR IN THE CALCULATION IT IS ENTITLED TO COMPENSATION AT THE CORRECTED RATE.

WE DISAGREE. WHERE, AS HERE, THE CLAIMANT DOES NOT SHOW IT WAS MISLED INTO SPENDING MORE THAN IT REASONABLY ANTICIPATED BECAUSE OF THE ERRONEOUS ESTIMATE AND WHERE THE ERROR COULD EASILY HAVE BEEN DETECTED FROM THE CONTRACT SIGNED BY THE CLAIMANT, RECOVERY ON THE BASIS OF MUTUAL MISTAKE IS NOT APPROPRIATE. B-176649, JANUARY 24, 1973.

THE CLAIM IS DISALLOWED.