B-49028, JANUARY 22, 1946, 25 COMP. GEN. 536

B-49028: Jan 22, 1946

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BIDS - MISTAKES WHERE THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE MATERIAL DESIRED. THE FACT THAT A BID PRICE WAS LOWER THAN THE MAXIMUM PRICE FOR THE INVOLVED COMMODITY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. EVEN THOUGH HE WERE AWARE OF SUCH DIFFERENCE BETWEEN THE BID PRICE AND THE MAXIMUM PRICE. - AND THE CONTRACT WAS PERFORMED. 1946: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14. THE AMOUNT STATED TO BE DUE BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BIDS ON WHICH WERE BASED CONTRACTS NO. YOU ADVISED THE PROCUREMENT DIVISION THAT AN ERROR HAD BEEN MADE IN YOUR BIDS IN THAT THE PRICES QUOTED THEREIN WERE FOR ORDINARY PORTLAND CEMENT INSTEAD OF FOR HIGH EARLY STRENGTH CEMENT ON WHICH BIDS WERE REQUESTED.

B-49028, JANUARY 22, 1946, 25 COMP. GEN. 536

BIDS - MISTAKES WHERE THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE MATERIAL DESIRED, THE ALLEGED ERROR OF THE SUCCESSFUL BIDDER IN BIDDING THE PRICE OF A LESS EXPENSIVE GRADE OF MATERIAL THAN THAT SPECIFIED IN THE INVITATION MUST BE REGARDED AS UNILATERAL--- NOT MUTUAL--- DUE SOLELY TO THE BIDDER'S NEGLIGENCE OR OVERSIGHT, AND AS AFFORDING NO BASIS FOR PAYMENT OF ANY AMOUNT IN ADDITION TO THE BID PRICE, THE BID HAVING BEEN ACCEPTED IN GOOD FAITH WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR. THERE BEING NOTHING TO PREVENT THE SALE OF A COMMODITY BELOW THE MAXIMUM PRICE ESTABLISHED BY THE OFFICE OF PRICE ADMINISTRATION, THE FACT THAT A BID PRICE WAS LOWER THAN THE MAXIMUM PRICE FOR THE INVOLVED COMMODITY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID, EVEN THOUGH HE WERE AWARE OF SUCH DIFFERENCE BETWEEN THE BID PRICE AND THE MAXIMUM PRICE. WHERE, AFTER ALLEGING ERROR IN ITS BID, A BIDDER EXECUTED A FORMAL CONTRACT FOR DELIVERY OF THE MATERIAL COVERED BY THE BID--- THE RIGHT BEING RESERVED TO APPEAL TO THE COMPTROLLER GENERAL BECAUSE OF THE ERROR-- - AND THE CONTRACT WAS PERFORMED, NO AMOUNT IN ADDITION TO THE CONTRACT PRICE MAY BE PAID ON ACCOUNT OF THE ERROR.

COMPTROLLER GENERAL WARREN TO THE LONE STAR CEMENT CORPORATION, JANUARY 22, 1946:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 14, 1945, REQUESTING REVIEW OF SETTLEMENT DATED SEPTEMBER 10, 1945, WHICH DISALLOWED YOUR CLAIM FOR $585, THE AMOUNT STATED TO BE DUE BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BIDS ON WHICH WERE BASED CONTRACTS NO. DA-TPS' 79536, AND DA-TPS-79537.

UNDER DATE OF FEBRUARY 1, 1945, THE TREASURY DEPARTMENT, PROCUREMENT DIVISION, INVITED BIDS FOR FURNISHING UNDER EACH OF REQUISITIONS NO. FR 2086 AND NO. FR-2087, 585 BARRELS OF HIGH EARLY STRENGTH CEMENT PACKED IN A CERTAIN SPECIFIED TYPE OF BAG. IN RESPONSE TO THAT INVITATION, YOU ORDERED, IN A LETTER DATED FEBRUARY 6, 1945, TO FURNISH " INCOR" HIGH EARLY STRENGTH CEMENT PACKED IN BAGS AS FOLLOWS AT THE PRICES INDICATED:

ORDINARY 6-PLY PAPER BAGS ------------------------ $2.16

SPECIAL EXPORT BAGS ------------------------------ 2.21

NAVY E BAGS ------------------------------------- 2.25 BY LETTERS DATED FEBRUARY 8, 1945, THE PROCUREMENT DIVISION ADVISED YOU OF THE ACCEPTANCE OF EACH OF YOUR BIDS FOR FURNISHING 585 BARRELS OF HIGH EARLY STRENGTH CEMENT AT A TOTAL PRICE IN EACH CASE OF $1,292.85. SAID PRICE COVERED CEMENT PACKED IN THE SPECIAL EXPORT BAG AT $2.21 PER BARREL.

IN A LETTER DATED FEBRUARY 12, 1945, YOU ADVISED THE PROCUREMENT DIVISION THAT AN ERROR HAD BEEN MADE IN YOUR BIDS IN THAT THE PRICES QUOTED THEREIN WERE FOR ORDINARY PORTLAND CEMENT INSTEAD OF FOR HIGH EARLY STRENGTH CEMENT ON WHICH BIDS WERE REQUESTED, AND THAT THE CORRECT PRICES FOR THE LATTER WERE AS FOLLOWS:

ORDINARY 6-PLY PAPER BAGS ----------------------- $2.66

SPECIAL EXPORT BAGS ----------------------------- 2.71

NAVY E BAGS ------------------------------------ 2.75 THE PROCUREMENT DIVISION ADVISED YOU BY LETTER DATED FEBRUARY 13, 1945, IN EFFECT, THAT SINCE YOUR BID HAD BEEN ACCEPTED ON FEBRUARY 8, 1945, YOUR REQUEST FOR A PRICE REVISION COULD NOT BE CONSIDERED BY THAT OFFICE; THAT THE FORMAL CONTRACTS MAILED TO YOU ON FEBRUARY 10, 1945, SHOULD BE SIGNED AND RETURNED PROMPTLY; AND THAT IF FURTHER CONSIDERATION WAS CONTEMPLATED WITH RESPECT TO THE ERROR CLAIMED TO HAVE BEEN MADE, THE MATTER COULD BE TAKEN UP WITH THE GENERAL ACCOUNTING OFFICE. IN YOUR LETTERS DATED FEBRUARY 20, 1945, YOU ADVISED THE PROCUREMENT DIVISION THAT YOU WERE RETURNING THEREWITH THE EXECUTED CONTRACTS AND STATED THAT YOU HAD INDICATED ON EACH CONTRACT THAT THEY HAD BEEN EXECUTED SUBJECT TO AN APPEAL TO THE COMPTROLLER GENERAL OF THE UNITED STATES BY REASON OF THE ERROR IN THE BIDS. THE CEMENT WAS DELIVERED, PAYMENT WAS MADE THEREFOR AT THE CONTRACT PRICE, AND YOUR CLAIM FOR AN AMOUNT IN ADDITION TO THE CONTRACT PRICE, AND YOUR CLAIM FOR AN AMOUNT IN ADDITION TO THE CONTRACT PRICE WAS DISALLOWED BY THE SETTLEMENT OF SEPTEMBER 10, 1945.

IN YOUR LETTER REQUESTING REVIEW, YOU REFER TO THE STATEMENT IN THE SETTLEMENT THAT THE ACCEPTANCE OF YOUR BID WAS IN GOOD FAITH WITHOUT NOTICE OF ERROR SINCE THERE WAS NO OTHER BID WITH WHICH A COMPARISON MIGHT HAVE BEEN INDICATIVE OF POSSIBLE MISTAKE, AND YOU STATE THAT YOU BELIEVE AN INVESTIGATION WILL REVEAL THAT OTHER BIDS WERE RECEIVED; AND THAT IF THE VALIDITY OF YOUR CLAIM DEPENDS WHETHER OTHER BIDS WERE RECEIVED WITH WHICH COMPARISON WITH YOUR BID COULD HAVE BEEN MADE, YOU CONSIDER THAT YOUR CLAIM SHOULD BE ALLOWED. ALSO, YOU STATE, IN EFFECT, THAT THE CONTRACTING OFFICER COULD NOT HAVE BEEN IGNORANT OF THE ERROR IN YOUR BID SINCE THE OFFICE OF PRICE ADMINISTRATION PRESCRIBED IN M.P.R.--- 244, AS AMENDED, A DIFFERENTIAL IN THE PRICE OF ORDINARY PORTLAND CEMENT AND HIGH EARLY STRENGTH CEMENT; AND THAT THIS DIFFERENTIAL HAS BEEN 50 CENTS PER BARREL FOR YEARS AND MUST BE FAMILIAR TO ALL EXPERIENCED IN THE PURCHASE OF PORTLAND CEMENT. IN CONCLUSION YOU STATE THAT YOU ISSUED A CORRECTED BID BEFORE THE ACCEPTANCE WAS RECEIVED IN YOUR OFFICE; AND THAT YOU HAD BEEN INFORMED THAT YOU COULD HAVE DECLINED TO ENTER INTO THE CONTRACTS BUT YOU BELIEVED THAT THE BEST INTEREST OF THE GOVERNMENT COULD BE SERVED BY ENTERING INTO THE CONTRACTS AND RESERVING THEREIN THE RIGHT TO APPEAL TO THIS OFFICE FOR RELIEF.

THE INVITATION ISSUED ON FEBRUARY 1, 1945, BY THE TREASURY DEPARTMENT, PROCUREMENT DIVISION, WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT BIDS WERE DESIRED ON " HIGH EARLY STRENGTH CEMENT.' THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE THERETO WAS UPON YOU. SEE IN THAT CONNECTION, THE CASE OF FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.1CLS. 120, 163, WHEREIN THE COURT SAID---

* * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IF THEY FAIL TO DO SO, AS PLAINTIFF DID IN THIS CASE, THE GOVERNMENT CANNOT FOR THAT REASON BE HELD FOR THE RESULTING LOSS. IF, AS STATED IN YOUR LETTER OF FEBRUARY 12, 1945, YOU BID ON ORDINARY PORTLAND CEMENT INSTEAD OF THE TYPE SPECIFIED IN THE INVITATIONS, IT IS CLEAR THAT SUCH ERROR AS WAS MADE IN YOUR BID WAS DUE SOLELY TO YOUR OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID---

MISTAKE, TO BE AVAILABLE IN EQUITY, MUST NOT HAVE ARISEN FROM NEGLIGENCE WHERE THE MEANS OF KNOWLEDGE WERE EASILY ACCESSIBLE. THE PARTY COMPLAINING MUST HAVE EXERCISED AT LEAST THE DEGREE OF DILIGENCE "WHICH MAY BE FAIRLY EXPECTED FROM A REASONABLE PERSON.' SUCH ERROR AS WAS MADE IN YOUR BID WAS UNILATERAL--- NOT MUTUAL--- AND THEREFORE DOES NOT ENTITLE YOU TO RELIEF. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.1SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.1CLS. 249.

THE STATEMENT IN THE SETTLEMENT TO THE EFFECT THAT NO OTHER BIDS WERE RECEIVED WITH WHICH A COMPARISON MIGHT HAVE BEEN INDICATIVE OF A POSSIBLE MISTAKE IN YOUR BID--- REFERENCE TO WHICH WAS MADE IN YOUR LETTER REQUESTING REVIEW--- APPARENTLY HAD REFERENCE TO THE FACT THAT NONE OF THE OTHER BIDS SPECIFIED SPECIAL EXPORT BAGS FOR THE CEMENT. THE DIFFERENCE BETWEEN YOUR BID AND THE OTHER BIDS, VARYING FROM $2.66 TO $2.75 PER BARREL, DID NOT PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN YOUR BID, AND YOU DID NOT ALLEGE ERROR IN YOUR BID UNTIL IT HAD BEEN ACCEPTED. ALSO, THERE IS NOTHING IN THE RECORD TO SHOW THAT THE CONTRACTING OFFICER WAS AWARE THAT THE OFFICE OF PRICE ADMINISTRATION AUTHORIZED A HIGHER PRICE FOR HIGH EARLY STRENGTH CEMENT THAN FOR ORDINARY PORTLAND CEMENT, BUT EVEN THOUGH THE CONTRACTING OFFICER ACTUALLY WERE AWARE OF SUCH A DIFFERENCE IN THE PRICE OF SAID TWO GRADES OF CEMENT, SUCH CIRCUMSTANCE WOULD NOT NECESSARILY PLACE HIM ON NOTICE OF THE PROBABILITY OF ERROR IN YOUR BID SINCE THERE IS NOTHING TO PREVENT THE SALE OF AN ARTICLE BELOW THE MAXIMUM PRICE FIXED THEREFOR BY THE OFFICE OF PRICE ADMINISTRATION.

AFTER ALLEGING ERROR IN YOUR BIDS YOU EXECUTED THE TWO CONTRACTS AGREEING TO FURNISH HIGH EARLY STRENGTH CEMENT FOR $2.21 PER BARREL AND STATED THEREIN THAT THE CONTRACT IN EACH CASE WAS BEING EXECUTED SUBJECT TO APPEAL TO THIS OFFICE BECAUSE OF THE ERRORS IN YOUR BIDS ON WHICH THE CONTRACTS WERE BASED, AND YOU PERFORMED THE CONTRACTS AND WERE PAID THE AGREED PRICE.

THE FACTS IN THE PRESENT CASE ARE SIMILAR TO THOSE IN THE CASE OF BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O.D. WILSON COMPANY, INC., 133 F.2D 399, WHEREIN THE APPELLEE ALLEGED ERROR IN ITS BID AND REQUESTED PERMISSION TO WITHDRAW ITS BID. UPON BEING ADVISED THAT ITS BID BOND WOULD BE FORFEITED IF IT REFUSED TO PERFORM, THE APPELLEE EXECUTED A WRITTEN CONTRACT IN ACCORDANCE WITH ITS BID AND NOTIFIED APPELLANT THAT IT WAS DOING SO UNDER PROTEST,"RESERVING" ALL RIGHTS ARISING FROM THE ERROR IN ITS BID. SUBSEQUENTLY, THE COMPANY INSTITUTED A SUIT FOR AN AMOUNT IN ADDITION TO THE CONTRACT PRICE WHICH HAD BEEN PAID. IN DENYING RECOVERY FOR THE ADDITIONAL AMOUNT, THE COURT, UPON APPEAL, SAID THAT IN ENTERING INTO THE CONTRACT THE APPELLEE DID SO "UNDER NO MISTAKE, FOR IT THEN KNEW ALL THE FACTS INCLUDING ITS FORMER MISTAKE" AND THAT THE APPELLEE "COULD NOT ON ANY THEORY CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE. COULD NOT ACQUIRE SUCH A RIGHT BY PURPORTING TO "RESERVE" IT. THIS IS WHAT IT HAS ATTEMPTED TO DO.' ALSO, SEE THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.1CLS. 699, CERTIORARI DENIED MAY 28, 1945, 89 L. USED. 1227; AND 23 COMP. GEN. 596.

THE GOVERNMENT HAS RECEIVED IN THE PRESENT CASE ONLY THAT WHICH THE CONTRACTS PROVIDE IT SHOULD RECEIVE AND HAVING PAID THE AGREED PRICE THEREFOR THERE IS NO LEGAL BASIS FOR THE ALLOWANCE OF AN AMOUNT IN ADDITION THERETO.