B-175748, DEC 15, 1972

B-175748, DEC 15, 1972

CONTRACTS - BID CORRECTION - GOVERNMENT DURESS DECISION DENYING THE CLAIM OF MOREY MACHINERY CO., INC. FOR ADDITIONAL PAYMENTS ON A CONTRACT WITH THE DEPARTMENT OF THE ARMY FOR METAL CUTTING SHAPERS ON THE BASIS THAT IT WAS FORCED TO WITHDRAW A CORRECTION TO ITS BID BY REASON OF GOVERNMENT DURESS. IT IS NOT DURESS TO INSTITUTE OR THREATEN TO INSTITUTE CIVIL SUITS WHERE THE THREAT TO DO SO IS MADE IN THE HONEST BELIEF THAT A GOOD CAUSE OF ACTION EXISTS. MILLS V. UNITED STATES, 187 CT. CL. 696 (1969). FROM THE RECORD, IT IS REASONABLY CLEAR THAT THE CONTRACTING OFFICER HONESTLY BELIEVED THAT A GOOD CAUSE OF ACTION WOULD EXIST AGAINST MOREY IN THE EVENT IT ATTEMPTED TO RENEGE ON ITS ORIGINAL OFFER.

TO WACHTEL, WIENER & ROSS:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 12, 1972, AND PRIOR CORRESPONDENCE, REGARDING THE CLAIM OF MOREY MACHINERY CO., INC., WITH RESPECT TO DEPARTMENT OF THE ARMY CONTRACT NO. DAAG11-70-C-0118.

THE SOLICITATION UPON WHICH THE CONTRACT WAS BASED REQUESTED OFFERS FOR TWO METAL CUTTING SHAPERS. BY A SERIES OF AMENDMENTS "THE CLOSING DATE FOR RECEIPT OF BIDS" WAS EXTENDED FROM 3 P.M., MAY 28, 1969, TO 3 P.M., JUNE 27, 1969. MOREY SUBMITTED AN OFFER IN THE AMOUNT OF $62,920 PER UNIT. THE ONLY OTHER OFFER WAS SUBMITTED BY THE CINROCK MACHINERY COMPANY IN THE AMOUNT OF $41,569 PER UNIT. HOWEVER, THE CINROCK OFFER WAS REJECTED AS NONRESPONSIVE TO THE SPECIFICATIONS.

AFTER THE EVALUATION OF THE OFFERS AND THE RECEIPT OF A FAVORABLE PREAWARD SURVEY ON MOREY, THE CONTRACTING OFFICER TELEPHONED THE COMPANY TO ADVISE THAT IT COULD EXPECT TO RECEIVE AWARD OF THE CONTRACT. AT THAT TIME, MR. LEONARD MOREY ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN THE PREPARATION OF THE OFFER IN THAT THE COST OF LIVING PROVISIONS IN THE NEW UNION CONTRACT HAD BEEN OVERLOOKED. THE CONTRACTING OFFICER TOLD MR. MOREY THAT THE PROCUREMENT WAS A FORMALLY ADVERTISED PROCUREMENT AND THAT THE OFFER COULD NOT BE REVISED IN THE SAME MANNER AS IN THE CASE OF A NEGOTIATED PROCUREMENT.

HOWEVER, ON JULY 29, 1969, MOREY SENT A TELEGRAM TO THE CONTRACTING AGENCY REPEATING THE NATURE OF THE ERROR AND REQUESTING AN INCREASE OF $14,400 IN ITS TOTAL PRICE FOR BOTH UNITS, OR ALTERNATIVELY, A CONTRACT ESCALATION CLAUSE BASED ON THE UNION CONTRACT. UPON RECEIPT OF THE TELEGRAM, THE CONTRACTING OFFICER TELEPHONED THE COMPANY AND SPOKE TO MR. ROBERT MOREY. THE CONTRACTING OFFICER ADVISED HIM THAT ANY CORRECTION IN THE OFFER WOULD HAVE TO BE MADE IN ACCORDANCE WITH THE MISTAKE IN BID PROCEDURES OF THE ARMED SERVICES PROCUREMENT REGULATION, AND THAT, UNLESS THE COMPANY COULD SUBMIT CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID, THE COMPANY WOULD BE HELD TO ITS ORIGINAL OFFER.

THEREAFTER, THE COMPANY SENT A TELEGRAM TO THE CONTRACTING OFFICER ON JULY 31, 1969, RESCINDING THE TELEGRAM OF JULY 29, 1969, AND REAFFIRMING THE ORIGINAL OFFER OF $62,920 PER UNIT. SUBSEQUENTLY, ON AUGUST 5, 1969, MR. ROBERT MOREY MET WITH CONTRACTING AGENCY REPRESENTATIVES TO DISCUSS THE SPECIFICATION REQUIREMENTS. ON AUGUST 26, 1969, CONTRACT NO. DAAG11- 70-C-0118 WAS AWARDED TO MOREY FOR THE EQUIPMENT.

APPROXIMATELY TWO YEARS AFTER AWARD OF THE CONTRACT, MOREY SUBMITTED A FINAL INVOICE CLAIMING $134,272.90 IN ADDITION TO THE $125,000 PREVIOUSLY PAID TO IT AS PROGRESS PAYMENTS. IN THE TRANSMITTAL LETTER ACCOMPANYING THE INVOICE, MOREY STATED THAT THE BILL WAS BEING PRESENTED FOR PAYMENT ON THE BASIS OF ITS TELEGRAM OF JULY 29, 1969, "WHICH WE WERE FORCED TO WITHDRAW UNDER DURESS." ALSO, MOREY STATED THAT SINCE THE OFFER WAS A NEGOTIATED BID, AS EVIDENCED BY THE FACE SHEET OF THE BID FORM, IT HAD EVERY RIGHT TO WITHDRAW ITS ORIGINAL OFFER, ALTHOUGH IT WAS NOT PERMITTED TO DO SO BECAUSE OF THREATS MADE BY THE GOVERNMENT REPRESENTATIVE.

AFTER EXPLORING THE MATTER WITH THE CONTRACTING AGENCY, MOREY DECIDED TO FILE THE CLAIM WITH OUR OFFICE. BY LETTER DATED MAY 22, 1972, TO OUR OFFICE, YOU INDICATED THAT MOREY IS NOW CLAIMING $226,239.

AS INDICATED ABOVE, MOREY CONTENDS THAT IT ENTERED INTO THE CONTRACT UNDER DURESS AND THREATS BY THE CONTRACTING OFFICER. IN THAT CONNECTION, IT POINTS OUT THAT, ALTHOUGH THE FACE SHEET OF THE SOLICITATION WAS MARKED "NEGOTIATED" AND PARAGRAPH 7 OF THE SOLICITATION INSTRUCTIONS AND CONDITIONS PROVIDED THAT IF THE SOLICITATION IS NEGOTIATED OFFERS MAY BE MODIFIED OR WITHDRAWN AT ANY TIME PRIOR TO AWARD, IT WAS COERCED INTO WITHDRAWING ITS REQUEST TO CHANGE ITS ORIGINAL OFFER BY REPRESENTATIONS THAT THE PROCUREMENT WAS AN ADVERTISED PROCUREMENT AND THAT IT WOULD BE HELD LIABLE TO ITS ORIGINAL OFFER. SUCH REPRESENTATIONS ARE ALLEGED TO HAVE BEEN MADE AT THE AUGUST 5, 1969, MEETING, AS WELL AS IN THE PRIOR TELEPHONE CALLS WITH THE CONTRACTING OFFICER.

ANY REPRESENTATIONS THAT WERE MADE IN THIS REGARD APPEAR TO HAVE BEEN BASED UPON THE FACT THAT THE CONTRACTING AGENCY INTENDED THE PROCUREMENT TO BE ADVERTISED, NOTWITHSTANDING THAT THE SOLICITATION WAS MARKED "NEGOTIATED" ON ITS FACE SHEET. IN THAT REGARD, WE NOTE THAT THE PROCUREMENT WAS LISTED IN THE MAY 1, 1969, ISSUE OF THE COMMERCE BUSINESS DAILY AS "IFB DAAG11-69-B-4135 - BID OPENING 26 MAY 69." WE NOTE ALSO THAT THE AMENDMENTS TO THE SOLICITATION EXTENDING THE TIME FOR THE RECEIPT OF OFFERS REFERRED TO "THE CLOSING DATE FOR RECEIPT OF BIDS." THE USE OF THE TERMS "IFB," "BID OPENING," AND "RECEIPT OF BIDS" ARE COMMON TO ADVERTISED, RATHER THAN NEGOTIATED, PROCUREMENTS. MOREOVER, THE "PRESOLICITATION DATA ON PROPOSED PROCUREMENT ACTIONS" SHEET, WHICH WAS PREPARED ON APRIL 14, 1969, SHOWS THE PROPOSED METHOD OF PROCUREMENT AS "FORMAL ADVERTISEMENT." ACCORDINGLY, IT APPEARS, AS REPRESENTED BY THE CONTRACTING AGENCY, THAT THE DESIGNATION OF THE PROCUREMENT AS NEGOTIATED, RATHER THAN ADVERTISED, ON THE FACE SHEET OF THE SOLICITATION WAS INADVERTENT RATHER THAN INTENDED. IN THE CIRCUMSTANCES, IN VIEW OF THE INADVERTENT NATURE OF THE "NEGOTIATED" DESIGNATION, THE CONTRACTING OFFICER BELIEVED THE PROCUREMENT TO BE AN ADVERTISED PROCUREMENT AND, ON THE BASIS OF THAT BELIEF, ADVISED MOREY THAT IT WOULD BE COMPELLED TO PERFORM ON THE ORIGINAL OFFER.

IT HAS BEEN HELD THAT IT IS NOT DURESS TO INSTITUTE OR THREATEN TO INSTITUTE CIVIL SUTIS WHERE THE THREAT TO DO SO IS MADE IN THE HONEST BELIEF THAT A GOOD CAUSE OF ACTION EXISTS. MILLS V. UNITED STATES, 187 CT. CL. 696 (1969); AND BEATTY V. UNITED STATES, 144 CT. CL. 203 (1958). FROM THE RECORD, IT IS REASONABLY CLEAR THAT THE CONTRACTING OFFICER HONESTLY BELIEVED THAT A GOOD CAUSE OF ACTION WOULD EXIST AGAINST MOREY IN THE EVENT IT ATTEMPTED TO RENEGE ON ITS ORIGINAL OFFER.

ACCORDINGLY, THE CLAIM OF MOREY IS DENIED.