Request for Reconsideration of Denial of Claim for Road Clearing Work

A firm requested reconsideration of the denial of its claim for road-clearing work done in connection with a timber sale under a Department of Agriculture contract. The basis of the firm's request was that the legal principle of mutual mistake allows reformation of the contract and payment of the claim. In a recent decision, the Court of Claims noted that a mutual mistake justifying reformation would exist where the purchaser and the Forest Service believed that the estimates showed unreasonably inaccurate estimates due to a mistake on the Forest Service's part. The court also noted that even though the prospectus warned potential bidders that estimates were not guaranteed, mutual mistake existed because the Government is not insulated from liability where contract estimates are grossly erroneous due to negligence by the Forest Service. Accordingly, the prior decision was reversed and the claim was authorized to be paid upon verification by the agency of the costs incurred by reason of the excess acreage which was cleared. However, payment was to be limited to an amount which would not result in displacement of the second high bidder.