B-61088, DECEMBER 20, 1946, 26 COMP. GEN. 426

B-61088: Dec 20, 1946

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SUCH CONTRACT IS PRESUMED TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES AND SUCH ERROR OF THE CONTRACTOR WHICH WAS DUE SOLELY TO ITS NEGLIGENCE IN THE PREPARATION OF THE BID AND NOT CONTRIBUTED TO BY THE GOVERNMENT MUST BE REGARDED AS UNILATERAL. 1946: REFERENCE IS MADE TO A LETTER DATED DECEMBER 6. WHEREIN IT IS ALLEGED THAT AN ERROR WAS MADE IN ITS BID ON WHICH CONTRACT NO. WAS BASED. AT THE TOP OF THE SAME PAGE ON WHICH SAID ITEMS WERE SET FORTH THERE APPEARED THE FOLLOWING WORDS: DELIVERY TO BE F.O.B. THE AGGREGATE OF WHICH WAS $16. THE CONTRACTING OFFICER ADVISED THE COMPANY THAT THERE WERE FORWARDED THEREWITH THE ORIGINAL AND FOUR COPIES OF CONTRACT NO. THE LOUISVILLE MEDICAL DEPOT REPLIED BY TELEGRAM STATING THAT THE PROCUREMENT REGULATIONS UNDER WHICH THE CONTRACT WAS AWARDED DID NOT PERMIT THE DEPOT TO MODIFY THE UNIT PRICE UPWARD.

B-61088, DECEMBER 20, 1946, 26 COMP. GEN. 426

BIDS - MISTAKES WHERE A CONTRACTOR, AFTER ALLEGING ERROR IN QUOTING PRICE ON BOX SHOOKS AS F.O.B. MILL IN RESPONSE TO AN INVITATION WHICH PROVIDED FOR F.O.B. DESTINATION, EXECUTED THE CONTRACT AND PROCEEDED WITH DELIVERY, SUCH CONTRACT IS PRESUMED TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES AND SUCH ERROR OF THE CONTRACTOR WHICH WAS DUE SOLELY TO ITS NEGLIGENCE IN THE PREPARATION OF THE BID AND NOT CONTRIBUTED TO BY THE GOVERNMENT MUST BE REGARDED AS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE CONTRACTOR TO RELIEF; AND ANY MODIFICATION OF THE CONTRACT TO CHANGE THE F.O.B. POINT WOULD BE VOID FOR WANT OF CONSIDERATION MOVING TO THE GOVERNMENT.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF WAR, DECEMBER 20, 1946:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 6, 1946, WITH ENCLOSURES, FROM THE OFFICE OF CHIEF OF FINANCE, CONCERNING LETTER DATED OCTOBER 2, 1946, FROM THE TEMPLE MANUFACTURING COMPANY, DALLAS, TEXAS, WHEREIN IT IS ALLEGED THAT AN ERROR WAS MADE IN ITS BID ON WHICH CONTRACT NO. W15-059-MD -26, DATED SEPTEMBER 24, 1946, WAS BASED.

THE LOUISVILLE MEDICAL DEPOT, LOUISVILLE, KENTUCKY, BY INVITATION NO. 15- 059-47-66, DATED AUGUST 23, 1946, INVITED BIDS--- TO BE RECEIVED BY SEPTEMBER 3, 1946--- FOR FURNISHING SHOOKS, BOX, WOOD, IN THE QUANTITIES AND SIZES SET FORTH IN ITEMS 1 TO 5, INCLUSIVE. AT THE TOP OF THE SAME PAGE ON WHICH SAID ITEMS WERE SET FORTH THERE APPEARED THE FOLLOWING WORDS:

DELIVERY TO BE F.O.B. LOUISVILLE MEDICAL DEPOT, LOUISVILLE 1, KENTUCKY.

IN RESPONSE TO THE INVITATION, THE TEMPLE MANUFACTURING COMPANY SUBMITTED A BID DATED AUGUST 29, 1946, WHERE IT OFFERED TO FURNISH EACH OF ITEMS 1 TO 5, INCLUSIVE, AT CERTAIN SPECIFIED PRICES, THE AGGREGATE OF WHICH WAS $16,706.05. BY LETTER DATED SEPTEMBER 5, 1946, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT THERE WERE FORWARDED THEREWITH THE ORIGINAL AND FOUR COPIES OF CONTRACT NO. W15-059-MD-26 AWARDED TO IT IN ACCORDANCE WITH ITS BID.

THE COMPANY ADVISED THE CONTRACTING OFFICER BY TELEGRAM DATED SEPTEMBER 10, 1946, THAT IT HAD INTENDED TO QUOTE PRICES F.O.B. MILL, AND REQUESTED TO BE ADVISED AS TO WHAT ACTION COULD BE TAKEN IN THE MATTER. THE LOUISVILLE MEDICAL DEPOT REPLIED BY TELEGRAM STATING THAT THE PROCUREMENT REGULATIONS UNDER WHICH THE CONTRACT WAS AWARDED DID NOT PERMIT THE DEPOT TO MODIFY THE UNIT PRICE UPWARD, AND THAT THE DEPOT COULD NOT RELEASE IT FROM ITS BID. THE MATTER WAS THE SUBJECT OF FURTHER COMMUNICATIONS, BUT NO RELIEF WAS GRANTED. BY LETTER DATED SEPTEMBER 24, 1946, THE COMPANY ADVISED THE DEPOT THAT IT WAS PROCEEDING WITH THE MANUFACTURE AND SHIPMENT OF THE BOX SHOOKS; THAT IT STILL HOPED TO BE REIMBURSED FOR THE FREIGHT CHARGES ON THE SHIPMENTS; AND THAT IT WAS RETURNING THE CONTRACT WHICH IT HAD EXECUTED. THE CONTRACT, NUMBERED W15-159-MD-26, SPECIFIED THE IDENTICAL PRICES FOR THE BOX SHOOKS AS IN THE COMPANY'S BID OF AUGUST 29, 1946, AND PROVIDED FOR DELIVERY OF THE ARTICLES F.O.B. LOUISVILLE MEDICAL DEPOT.

IN THE REFERRED-TO LETTER OF OCTOBER 2, 1946, ADDRESSED TO THIS OFFICE, THE COMPANY STATED THAT IN QUOTING ON THE BOX SHOOKS IT OVERLOOKED THE REQUIREMENT THAT BIDS WERE REQUESTED ON THE BASIS OF PRICES F.O.B. LOUISVILLE MEDICAL DEPOT; THAT IT IS ESTIMATED THAT THE FREIGHT CHARGES ON THE BOX SHOOKS WOULD AMOUNT TO $1,550; THAT ITS BID UNDOUBTEDLY WAS LOWER THAN THE OTHER BIDS RECEIVED IN RESPONSE TO THE INVITATION AND, ALSO, LOWER THAN PRICES PREVIOUSLY PAID FOR SIMILAR ARTICLES; AND THE REQUEST WAS MADE THAT THE CONTRACT BE MODIFIED TO PROVIDE FOR DELIVERY F.O.B. DIBOLL, TEXAS, INSTEAD OF LOUISVILLE MEDICAL DEPOT.

THE CONTRACTING OFFICER WHO AWARDED CONTRACT NO. W15-059-MD-26 MADE THE FOLLOWING STATEMENT:

I, HOWARD K. SIMPSON, CAPTAIN M.A.C., FORMER PURCHASING AND CONTRACTING OFFICER, LOUISVILLE MEDICAL DEPOT, CERTIFY THAT I DID SIGN CONTRACT NO. W- 15-059-MD-26, TEMPLE MANUFACTURING COMPANY, FOR THE U.S. GOVERNMENT. I DO FURTHER CERTIFY THAT I DID INVITE BIDS ON PRICE INQUIRY NO. 15-059-47-66 AND DID RECEIVE BIDS ONE OF WHICH WAS FROM THE TEMPLE MANUFACTURING COMPANY, P.O. BOX 567, DALLAS 1, TEXAS. THE BIDS RECEIVED WERE ABSTRACTED AND AWARD MADE TO THE LOWEST ACCEPTABLE BIDDER, THE TEMPLE MANUFACTURING COMPANY. THE BID FROM THE TEMPLE MANUFACTURING COMPANY WAS RECEIVED WITHOUT EXCEPTIONS. AS THE PURCHASING AND CONTRACTING OFFICER I DO CERTIFY THAT I DID PERSONALLY INSPECT EACH BID RECEIVED AND DID PERSONALLY AWARD CONTRACT NO. W-15 059-MD-26 TO THE TEMPLE MANUFACTURING COMPANY IN ACCORDANCE WITH THEIR BID RECEIVED ON PRICE INQUIRY NO. 15-059-47-66. THE SUBJECT AWARD WAS MADE IN GOOD FAITH AND I, THE PURCHASING AND CONTRACTING OFFICER, HAD NO REASON WHATSOEVER TO SUSPECT THAT THERE WAS AN ERROR IN THE TEMPLE MANUFACTURING COMPANY'S BID.

THE ONLY OTHER BID RECEIVED IN RESPONSE TO THE INVITATION WAS IN THE AGGREGATE AMOUNT OF $19,551.15, AND THE SHIPPING POINT NAMED THEREIN WAS CORNISH, MAINE. THE DIFFERENCE IN THE BIDS IS NOT SO GREAT AS TO WARRANT A CONCLUSION--- CONTRARY TO THE ABOVE-QUOTED STATEMENT--- THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY.

AFTER ALLEGING ERROR IN ITS BID, THE COMPANY EXECUTED CONTRACT NO. W15- 059-MD-26, UNDER WHICH IT UNEQUIVOCALLY AGREED TO DELIVER THE BOX SHOOKS F.O.B. LOUISVILLE MEDICAL DEPOT AT THE PRICE SPECIFIED IN ITS BID. SUCH CONTRACT IS PRESUMED IN LAW TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. SEE BRAWLEY V. UNITED STATES, 96 U.S. 168, 173, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID:

* * * THE WRITTEN CONTRACT MERGED ALL PREVIOUS NEGOTIATIONS, AND IS PRESUMED, IN LAW, TO EXPRESS THE FINAL UNDERSTANDING OF THE PARTIES. THE CONTRACT DID NOT EXPRESS THE TRUE AGREEMENT, IT WAS THE CLAIMANT'S FOLLY TO HAVE SIGNED IT.

ALSO, SEE SIMPSON V. UNITED STATES, 172 U.S. 372.

IN THE CASE OF THE MASSMAN CONSTRUCTION COMPANY V. UNITED STATES, 102 C.1CLS. 699, 717, CERTIORARI DENIED, 325 U.S. 866, THE PLAINTIFFS ALLEGED THAT IT OMITTED AN ITEM OF $88,000 IN ITS BID SUBMITTED TO THE WAR DEPARTMENT. THE COURT, IN DENYING RECOVERY OF THE AMOUNT ASKED, STATED---

AT THE TIME THE CONTRACT WAS AWARDED TO THE PLAINTIFF, PURSUANT TO ITS BID, AND AT THE TIME IT SIGNED THE CONTRACT, THE PLAINTIFF WAS NOT MISTAKEN. IT HAD BECOME AWARE OF THE MISTAKE IN ITS BID, AND FACED THE PROBLEM OF WHETHER IT WAS WILLING TO SIGN A CONTRACT FOR THE FIGURE WHICH IT HAD, BY MISTAKE SINCE DISCOVERED, BID. THE GOVERNMENT WAS ALSO AWARE OF THE PLAINTIFF'S CLAIM THAT IT HAD MADE A MISTAKE IN THE BID. THERE WAS NOT, THEN, AT THE TIME OF SIGNING THE CONTRACT, ANY LACK OF KNOWLEDGE, EITHER MUTUAL OR UNILATERAL, WHICH CAUSED EITHER OF THEM TO MAKE THE CONTRACT WHICH THEY DID MAKE, WHEN IN FACT THEY INTENDED TO MAKE A DIFFERENT CONTRACT. THAT BEING SO, IF WE SHOULD REFORM THE CONTRACT AS THE PLAINTIFF REQUESTS, WE WOULD BE MAKING FOR THE PARTIES THE VERY CONTRACT WHICH ONE OF THEM, THE GOVERNMENT,EXPRESSLY REFUSED TO MAKE AT THAT TIME, THOUGH REQUESTED TO DO SO BY THE PLAINTIFF.

ALSO, SEE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INC., 133 F.2D 399; 20 COMP. GEN. 652; 23 ID. 596; AND 25 ID. 536.

IT IS CLEAR THAT ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY--- THE RESPONSIBILITY FOR THE PREPARATION OF WHICH WAS UPON THE BIDDER--- WAS DUE SOLELY TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.1CLS. 249, 259, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.1SUPP. 505, 507. ALSO, SEE BROWN V. LEVY, 29 TEX. CIV. APP. 389, 69 S.W. 255, 258.

MOREOVER, A MODIFICATION OF THE CONTRACT PROVIDING FOR THE F.O.B. POINT TO BE DIBOLL, TEXAS, INSTEAD OF LOUISVILLE MEDICAL DEPOT, AS REQUESTED BY THE COMPANY, WOULD BE VOID FOR WANT OF CONSIDERATION MOVING TO THE GOVERNMENT. SEE J. J. PREIS AND COMPANY V. UNITED STATES, 58 C.1CLS. 81, 86; VULCANITE PORTLAND CEMENT COMPANY V. UNITED STATES, 74 C.1CLS. 692, 705; 14 COMP. GEN. 468; 18 ID. 114. ID. 301, 304; AND 19 ID. 48, 51.

ACCORDINGLY, I FIND NO LEGAL BASIS FOR MODIFYING CONTRACT NO. W15 059-MD- 26 TO PROVIDE FOR A CHANGE IN THE F.O.B. POINT, AS REQUESTED BY THE COMPANY.