B-84111, MARCH 17, 1949, 28 COMP. GEN. 527

B-84111: Mar 17, 1949

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ALLEGED ERROR IN BID IN THAT ITS BID PRICE WAS LESS THAN THE MINIMUM PRICE FIXED BY AGREEMENT WITH ITS SUPPLIER PURSUANT TO THE FAIR TRADE ACT OF AUGUST 17. THERE IS NO BASIS FOR PERMITTING THE BIDDER TO WITHDRAW ITS BID WHICH. HAVING BEEN ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER WHO HAD NOT DUTY TO DETERMINE WHETHER THE PRICES QUOTED WERE IN CONFORMITY WITH FAIR TRADE AGREEMENTS. 1949: THIS OFFICE IS IN RECEIPT OF A LETTER DATED FEBRUARY 28. WHEREIN A DECISION IS REQUESTED AS TO WHETHER THE ABBOTT AND LITCHFIELD COMPANY MAY BE PERMITTED TO WITHDRAW ITS ACCEPTED BID FOR THE STATED REASON THAT THE PRICE SPECIFIED THEREIN IS BELOW THAT PRESCRIBED BY THE " FAIR TRADE LAW". - WAS ACCEPTED ON JANUARY 31.

B-84111, MARCH 17, 1949, 28 COMP. GEN. 527

BIDS - MISTAKES - WITHDRAWALS WHERE THE BIDDER, AFTER AWARD, ALLEGED ERROR IN BID IN THAT ITS BID PRICE WAS LESS THAN THE MINIMUM PRICE FIXED BY AGREEMENT WITH ITS SUPPLIER PURSUANT TO THE FAIR TRADE ACT OF AUGUST 17, 1937, THERE IS NO BASIS FOR PERMITTING THE BIDDER TO WITHDRAW ITS BID WHICH, ON ITS FACE, DID NOT INDICATE THE EXISTENCE OF MISTAKE, AND WHICH, HAVING BEEN ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER WHO HAD NOT DUTY TO DETERMINE WHETHER THE PRICES QUOTED WERE IN CONFORMITY WITH FAIR TRADE AGREEMENTS, CONSUMMATED A VALID AND BINDING CONTRACT.

COMPTROLLER GENERAL WARREN TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, MARCH 17, 1949:

THIS OFFICE IS IN RECEIPT OF A LETTER DATED FEBRUARY 28, 1949, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER, VETERANS' ADMINISTRATION HOSPITAL, FRAMINGHAM, MASSACHUSETTS, WHEREIN A DECISION IS REQUESTED AS TO WHETHER THE ABBOTT AND LITCHFIELD COMPANY MAY BE PERMITTED TO WITHDRAW ITS ACCEPTED BID FOR THE STATED REASON THAT THE PRICE SPECIFIED THEREIN IS BELOW THAT PRESCRIBED BY THE " FAIR TRADE LAW"--- APPARENTLY THE FAIR TRADE ACT OF AUGUST 17, 1937, 50 STAT. 693, 15 U.S. CODE, SECTION 1.

THE VETERANS' ADMINISTRATION HOSPITAL, FRAMINGHAM, MASSACHUSETTS, BY INVITATION NO. 49-336, REQUESTED BIDS--- TO BE OPENED JANUARY 31, 1949- - FOR FURNISHING 100 BEDSPREADS TO BE BATES FABRICS NO. 8670-8672, OR EQUAL. IN RESPONSE TO THE INVITATION, THE ABBOTT AND LITCHFIELD COMPANY SUBMITTED A BID DATED JANUARY 28, 1949, WHEREIN IT OFFERED TO FURNISH BATES NO. 8672 BEDSPREADS FOR $4.68 EACH. THE BID OF THE COMPANY BEING THE LOWEST RECEIVED--- THE ONLY OTHER BID HAVING BEEN SUBMITTED BY BATES FABRICS, INC., IN THE AMOUNT OF $4.80 EACH--- WAS ACCEPTED ON JANUARY 31, 1949.

IN A LETTER DATED FEBRUARY 17, 1949, ADDRESSED TO THE VETERANS' ADMINISTRATION HOSPITAL, FRAMINGHAM, MASSACHUSETTS, THE COMPANY REQUESTED PERMISSION TO WITHDRAW ITS BID FOR THE REASON THAT " AT THE TIME WE SUBMITTED THE BID, WE DID NOT KNOW ANYTHING ABOUT A FAIR TRADE LAW WHICH WOULD PREVENT A DEALER OR JOBBER FROM SELLING THESE SPREADS BELOW THE ESTABLISHED PRICE OF $5.17 EACH.

SECTION 1 OF THE ACT OF AUGUST 17, 1937, SUPRA, RELATING TO THE ILLEGALITY OF CONTRACTS IN RESTRAINT OF TRADE PROVIDES, IN SUBSTANCE, THAT NOTING THEREIN SHALL RENDER ILLEGAL, CONTRACTS OR AGREEMENTS PRESCRIBING MINIMUM PRICES FOR THE RESALE OF A COMMODITY WHICH BEARS THE TRADE MARK, BRAND, OR NAME OF THE PRODUCER OF DISTRIBUTOR, WHEN CONTRACTS OR AGREEMENTS OF THAT DESCRIPTION ARE LAWFUL AS APPLIED TO INTRA-STATE TRANSACTIONS UNDER ANY STATUTE, LAW, OR OTHER POLICY NOW OR THEREAFTER IN EFFECT IN ANY STATE, TERRITORY, OR THE DISTRICT OF COLUMBIA IN WHICH RESALE IS MADE.

THE BID OF THE ABBOTT AND LITCHFIELD COMPANY APPEARS TO HAVE BEEN AS INTENDED AT THE TIME IT WAS SUBMITTED. AFTER ACCEPTANCE OF ITS BID BY THE GOVERNMENT, THE COMPANY APPARENTLY CONCLUDED THAT ITS BID PRICE WAS LESS THAN THE PRICE FOR WHICH IT HAD AGREED WITH THE MANUFACTURER TO SELL THE BEDSPREADS. THE MATTER OF DETERMINING THE PRICE AT WHICH THE BEDSPREADS WERE TO BE OFFERED TO THE GOVERNMENT WAS UPON THE BIDDER. THE ACT OF AUGUST 17, 1937, SUPRA, DOES NOT IMPOSE ANY DUTY UPON CONTRACTING OFFICERS OF THE GOVERNMENT TO DETERMINE WHETHER PRICES QUOTED BY BIDDERS ARE IN CONFORMITY WITH THE REQUIREMENTS OF ANY AGREEMENT WHICH THE MANUFACTURERS AND SUPPLIERS OF THE PRODUCTS MAY HAVE ENTERED INTO PURSUANT TO SAID ACT. THE MATTER OF BIDDING IS NOT THE RESPONSIBILITY OF THE CONTRACTING OFFICER OF THE GOVERNMENT, THE DUTY OF THE CONTRACTING OFFICER BEING TO ACCEPT THE LOWEST RESPONSIBLE BID MEETING THE REQUIREMENTS OF THE SPECIFICATIONS.

THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF THE ABBOTT AND LITCHFIELD COMPANY WAS MADE IN GOOD FAITH, THERE BEING NOTHING ON THE FACE OF THE BID TO INDICATE THE EXISTENCE OF MISTAKE AND NO ERROR HAVING BEEN ALLEGED BY THE COMPANY UNTIL AFTER AWARD. CONSEQUENTLY, THERE WOULD APPEAR TO BE NO BASIS ON WHICH IT COULD BE HELD THAT THE ACCEPTANCE OF THE BID DID NOT CONSUMMATE A VALID AND BINDING CONTRACT.

ACCORDINGLY, IF ABBOTT AND LITCHFIELD COMPANY FAILS TO DELIVER THE BEDSPREADS AT THE PRICE SPECIFIED THEREFOR IN ITS BID AND THE BEDSPREADS ARE PROCURED FROM OTHER SOURCES, THE EXCESS COST, IF ANY, SHOULD BE CHARGED TO THE COMPANY.

THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION--- THE CONTRACT HAVING BEEN AWARDED (CF. 16 COMP. GEN. 565/--- BUT SINCE A DECISION IN THE MATTER APPEARS NECESSARY, IT IS BEING RENDERED TO YOU.

THE PAPERS WHICH ACCOMPANIED THE LETTER OF FEBRUARY 28, 1949, ARE TRANSMITTED HEREWITH.