B-76230, MAY 25, 1948, 27 COMP. GEN. 724

B-76230: May 25, 1948

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

BIDS - MISTAKES WHERE THE INVITATION TO BID WAS CLEAR AND UNAMBIGUOUS THAT BIDS WERE DESIRED ON THE BASIS OF CERTAIN BOLTS "WITH * * * NUTS. AS NOT AFFORDING ANY BASIS FOR THE PAYMENT OF AN AMOUNT IN EXCESS OF PRICES SPECIFIED IN THE BID WHICH WAS ACCEPTED BY THE GOVERNMENT IN GOOD FAITH PRIOR TO ALLEGATION OF ERROR IN BID. 1948: I HAVE A LETTER DATED APRIL 30. TO HAVE BEEN MADE IN ITS BID DATED SEPTEMBER 4. THE ABOVE PRICES WERE SUBJECT TO A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS. THE ONLY OTHER BID WAS THAT OF GEORGE WORTHINGTON COMPANY IN AMOUNTS AS FOLLOWS: ITEM NO. IT IS STATED THAT ITEMS 136 TO 141. WERE AWARDED TO WILLIAMS AND COMPANY. THAT IF BOLTS WITH NUTS WERE REQUIRED ON THE FIVE ITEMS THE PRICES SHOULD BE CONSIDERABLY HIGHER.

B-76230, MAY 25, 1948, 27 COMP. GEN. 724

BIDS - MISTAKES WHERE THE INVITATION TO BID WAS CLEAR AND UNAMBIGUOUS THAT BIDS WERE DESIRED ON THE BASIS OF CERTAIN BOLTS "WITH * * * NUTS," THE ALLEGED ERROR OF THE SUCCESSFUL BIDDER, OF WHICH THE CONTRACTING OFFICER HAD NO NOTICE, IN BIDDING THE PRICES OF BOLTS ONLY MUST BE REGARDED AS A UNILATERAL--- NOT MUTUAL--- MISTAKE DUE SOLELY TO THE BIDDER'S NEGLIGENCE, AND AS NOT AFFORDING ANY BASIS FOR THE PAYMENT OF AN AMOUNT IN EXCESS OF PRICES SPECIFIED IN THE BID WHICH WAS ACCEPTED BY THE GOVERNMENT IN GOOD FAITH PRIOR TO ALLEGATION OF ERROR IN BID.

ACTING COMPTROLLER GENERAL YATES TO THE CHAIRMAN, NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS, MAY 25, 1948:

I HAVE A LETTER DATED APRIL 30, 1948, WITH ENCLOSURES, FROM YOUR COMMITTEE RELATIVE TO AN ERROR ALLEGED BY WILLIAMS AND COMPANY, INC., TO HAVE BEEN MADE IN ITS BID DATED SEPTEMBER 4, 1947. YOU REQUEST A DECISION AS TO WHETHER THE BIDDER MAY BE GRANTED THE RELIEF REQUESTED.

THE NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS, CLEVELAND, OHIO, BY INVITATION NO. C-134, INVITED BIDS--- TO BE OPENED AUGUST 29, 1947--- FOR FURNISHING 188 ITEMS OF SUPPLIES, DELIVERY TO BE MADE F.O.B. BROOKPARK AND GRAYTON ROADS, CLEVELAND, OHIO. IN RESPONSE TO THE INVITATION WILLIAMS AND COMPANY, INC., SUBMITTED A BID DATED SEPTEMBER 4, 1947, WHEREIN IT OFFERED TO FURNISH, AMONG OTHER THINGS, BOLTS AND NUTS AS DESCRIBED UNDER ITEMS 136 TO 141, INCLUSIVE, AT THE PRICES INDICATED AS FOLLOWS:

ITEM NO. ARTICLES OR SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

DOLLARS CENTS

BOLTS: SHALL BE OF NICKEL-CHROMIUM IRON ALLOY, STANDARD, HEXAGON HEAD, N.F.T.S., CLASS 2 FIT; WITH STANDARD INCONEL HEXAGON NUTS; PHYSICAL PROPERTIES SHALL BE IN STRICT ACCORDANCE WITH FEDERAL SPECIFICATION IND. FF-B-571A ( BOLTS SHALL BE TYPE B-2 SEMIFINISHED; NUTS SHALL BE TYPE A-2 SEMIFINISHED) ALLOY SHALL BE IN STRICT ACCORDANCE WITH ARMY AND NAVY SPECIFICATION NO. AN-QQ-N-268-1, CONDITION B, COLD DRAWN; IN SIZES AS LISTED:

SIZE LENGTH THREAD

136 3/8 INCH ------ 1 INCH ------ 24 400 EACH 25.25 PER C.

137 3/8 INCH ------ 3 INCH ------ 24 400 EACH 44.38 PER C.

138 1/2 INCH ------ 2 INCH ------ 20 400 EACH 72.44 PER C.

139 1/2 INCH ------ 3 INCH ------ 20 200 EACH 77.72 PER C.

140 5/8 INCH ------ 3 INCH ------ 18 200 EACH 92.62 PER C.

141 NUTS ONLY, SIZE, 3/8 INCH BY 24 THREAD 500 EACH 25.58 PER C. THE ABOVE PRICES WERE SUBJECT TO A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS.

THE ONLY OTHER BID WAS THAT OF GEORGE WORTHINGTON COMPANY IN AMOUNTS AS FOLLOWS:

ITEM NO. PRICE EACH

136 -------------------------------- $0.32

137 -------------------------------- .55

138 -------------------------------- .90

139 -------------------------------- .96

140 -------------------------------- 1.15

141 -------------------------------- .32

IN THE LETTER OF APRIL 30, 1948, IT IS STATED THAT ITEMS 136 TO 141, INCLUSIVE, WERE AWARDED TO WILLIAMS AND COMPANY, INC., ON SEPTEMBER 25, 1947, AT THE UNIT PRICES STIPULATED IN ITS BID; THAT ON JANUARY 16, 1948, THE BIDDER ALLEGED THAT ITS SUPPLIER QUOTED ON FURNISHING INCONEL BOLTS WITHOUT NUTS UNDER ITEMS 136 TO 140, INCLUSIVE; THAT IT ERRONEOUSLY QUOTED THE SAME PRICES TO THE GOVERNMENT; AND THAT IF BOLTS WITH NUTS WERE REQUIRED ON THE FIVE ITEMS THE PRICES SHOULD BE CONSIDERABLY HIGHER. IS STATED FURTHER THAT THE FIELD PROCUREMENT OFFICER THEREUPON CONTRACTED THE OTHER BIDDER WHO ADVISED INFORMALLY THAT ITS QUOTATION WAS BASED ON FURNISHING BOLTS WITH NUTS ON THE ITEMS; THAT BASED ON A PRELIMINARY REVIEW OF THE FACTS, THE NATIONAL ADVISORY COMMITTEE ADVISED WILLIAMS AND COMPANY, INC., THROUGH ITS FIELD PROCUREMENT OFFICER, THAT THE SPECIFICATION CLEARLY STATED THAT BOLTS WITH STANDARD INCONEL HEXAGON NUTS WERE REQUIRED UNDER THE SAID ITEMS; AND THAT SINCE THE BID HAD BEEN ACCEPTED IN GOOD FAITH THE CONTRACTOR "WOULD HAVE TO SUPPLY THE MATERIAL AS CALLED FOR IN THE CONTRACT AT THE PRICES QUOTED.' HOWEVER, IT IS STATED FURTHER THAT:

ON MARCH 22, 1948, THE CONTRACTOR AGAIN WROTE TO THE FIELD PROCUREMENT OFFICER REQUESTING FURTHER REVIEW OF THE MATTER AND REDUCING THE PRICES ON ITEMS 136 TO 140 BELOW THE REVISED PRICES QUOTED IN THEIR LETTER OF JANUARY 16, 1948. ON MARCH 18, 1948, THE OTHER BIDDER, GEORGE WORTHINGTON COMPANY, ADVISED THE FIELD PROCUREMENT OFFICER THAT THEIR BID ON ITEMS 136 TO 140 DID NOT INCLUDE THE COST OF THE NUTS WAS INCORRECT AND THAT THE PRICE FOR FURNISHING BOLTS WITH NUTS WOULD BE APPROXIMATELY DOUBLE THE COST OF THIER ORIGINAL BID.

FROM A COMPARISON OF THE PRICES QUOTED BY BOTH BIDDERS ON ITEM 141 FOR A QUANTITY OF 500 3/8-INCH NUTS ONLY AGAINST THE PRICES QUOTED ON ITEM 136 FOR 400 BOLTS WITH 3/8-INCH NUTS IT APPEARS THAT AN ERROR MAY HAVE BEEN MADE BY BOTH BIDDERS IN INTERPRETING THE SPECIFICATIONS. IT HAS ALSO BEEN ASCERTAINED THAT THE TRADE PRACTICE IS TO QUOTE SEPARATELY ON BOLTS AND NUTS. THE CONTRACTOR HAS ADVISED THAT SINCE THESE BOLTS ARE A SPECIAL PRODUCTION ITEM NO PRICE LIST IS AVAILABLE. THE CONTRACTOR HAS REQUESTED THAT THE MATTER BE MODIFIED TO REFLECT THE INCREASED PRICES QUOTED BY THE CONTRACTOR ON ITEMS 136 TO 140 IN THEIR LETTER OF MARCH 22, 1948.

AS ABOVE INDICATED, THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT BIDS WERE DESIRED ON THE BASIS OF BOLTS "WITH STANDARD INCONEL HEXAGON NUTS," IT BEING SPECIFICALLY STATED IN THE INVITATION THAT THE PHYSICAL PROPERTIES OF THE SAID BOLTS AND NUTS WERE TO "BE IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. FF-G-571-A ( BOLTS SHALL BE TYPE B-2 SEMIFINISHED; NUTS SHALL BE TYPE A-2 SEMIFINISHED).' SO FAR AS THE PRESENT RECORD SHOWS, THERE WAS NOTHING ON THE FACE OF THE BID TO INDICATE THAT THE PRICES QUOTED BY THE BIDDER WERE INTENDED TO BE ON ANY OTHER BASIS. THE PURCHASING OFFICER APPEARS TO HAVE ACCEPTED THE BID ON THAT BASIS. IF THE BIDDER ELECTED TO SUBMIT A BID BASED ON THE QUOTATION OF ITS SUPPLIER WITHOUT DEFINITE KNOWLEDGE THAT SAID QUOTATION WAS ON THE BASIS OF FURNISHING BOLTS AND NUTS AS SPECIFIED IN THE GOVERNMENT'S INVITATION, THAT IS A MATTER FOR WHICH THE GOVERNMENT WAS NOT RESPONSIBLE AND WITH WHICH IT NECESSARILY IS NOT CONCERNED. CONSEQUENTLY, THE CONTRACTOR MUST ASSUME THE CONSEQUENCES THEREOF OR LOOK TO ITS SUPPLIER FOR AN ADJUSTMENT IN THE MATTER.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE BE MUTUAL OR THE ERROR IS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.1CLS. 249, 259. ALSO, SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.1SUPP. 505, 507, AND CASES THERE CITED. IN THE PRESENT CASE, IT WAS THE CONTRACTOR'S RESPONSIBILITY TO ASCERTAIN FROM THE INVITATION THE NEEDS OF THE GOVERNMENT. WHILE IT APPEARS CLEAR THAT BOLTS WITH NUTS WERE REQUIRED UNDER ITEMS 136 TO 140, INCLUSIVE, AND THAT NUTS ONLY WERE REQUIRED UNDER ITEM 141, IF THE CONTRACTOR HAD ANY DOUBT AS TO THE REQUIREMENTS, IT SHOULD HAVE ASKED THE PROCUREMENT OFFICER FOR AN EXPLANATION BEFORE PLACING AN ORDER WITH ITS SUPPLIER. THIS IT DID NOT DO. ALTHOUGH THE CONTRACTOR CONTENDS THAT ITS BID WAS SUBMITTED ON THE BASIS OF FURNISHING BOLTS WITHOUT NUTS UNDER ITEMS 136 TO 140, INCLUSIVE, NOTHING WAS INSERTED IN THE BID, OR OTHERWISE SHOWN AT THE TIME THE BID WAS SUBMITTED, TO INDICATE SUCH INTENTION. CONSEQUENTLY, IT MUST BE ASSUMED THAT THE BID WAS SUBMITTED ON THE BASIS OF FURNISHING BOLTS WITH NUTS. IT IS APPARENT THAT SUCH ERROR AS WAS MADE WAS DUE SOLELY TO THE NEGLIGENCE OF THE CONTRACTOR AND ITS SUPPLIER. IN THIS CONNECTION, IT WAS HELD IN THE CASE OF GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61, THAT:

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.'

THE CONTRACTOR--- PRESUMABLY A REGULAR DEALER IN BOLTS AND NUTS--- DID NOT QUESTION THE QUOTATION OF ITS SUPPLIER AND, THEREFORE, THERE WOULD APPEAR TO BE NO BASIS FOR ASSUMING THAT THE PROCUREMENT OFFICER SHOULD HAVE BEEN PUT ON NOTICE OF AN ERROR IN THE BID OF THE CONTRACTOR. UNDER THE CIRCUMSTANCES AND SINCE IT APPEARS THAT SUCH MISTAKE AS WAS MADE WAS UNILATERAL AND NOT MUTUAL AND WAS NOT ALLEGED UNTIL AFTER THE BID WAS ACCEPTED BY THE GOVERNMENT IN GOOD FAITH, THERE IS NO LEGAL BASIS FOR PAYMENT OF ANY AMOUNT IN EXCESS OF THE PRICES AGREED UPON IN THE CONTRACT. ALSO, IT MAY BE STATED THAT NOTHING IN THE NATURE OF A TRADE CUSTOM, PRACTICE OR USAGE MAY BE INVOKED TO VARY OR CONTRADICT THE TERMS OF A CONTRACT WITH THE UNITED STATES. MOORE V. UNITED STATES, 196 U.S. 157; NATIONAL BANK V. BURKHARDT, 100 U.S. 686, AND 18 COMP. GEN. 60, 65.

ACCORDINGLY, ON THE BASIS OF THE FACTS NOW OF RECORD, I FIND NO PROPER LEGAL BASIS FOR INCREASING THE PRICES FOR THE BOLTS AND NUTS, AS REQUESTED BY THE CONTRACTOR.