B-165297, AUG. 4, 1969

B-165297, AUG. 4, 1969

CONTRACTS - MISTAKES DECISION TO FRED EGGERS CO. DENYING RELIEF BASED ON ALLEGED SUPPLIER'S ERROR IN BID FOR CONSTRUCTION AT CAMP SAN ONOFRE FOR NAVY. REQUEST FOR RECONSIDERATION IS BASED ON FACT THAT SPECIFICATION CHANGES CONFIRMED PRIOR ERROR AND THAT REVISED QUOTATIONS COVER SAME MATERIALS FOR WHICH PRICE RELIEF HAD BEEN REQUESTED. THE QUESTION OF WHETHER A CONTRACT MAY BE REFORMED BY REASON OF ERROR RELATES BACK TO DATE BIDS ARE OPENED. ONCE IT HAS BEEN DETERMINED THAT NO BASIS EXISTS FOR CONTRACT REFORMATION, MATTERS OF CONTRACT PERFORMANCE AND ADMINISTRATION HAVE NO BEARING ON LEGAL MATTER THERETOFORE DETERMINED.

TO FRED EGGERS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 30, 1969, AND ENCLOSURES, REQUESTING RECONSIDERATION OF OUR DECISION B-165297, DECEMBER 6, 1968, IN THE LIGHT OF NEW FACTS WHICH YOU STATE HAVE DEVELOPED SUBSEQUENT TO OUR DECISION. THE DECISION DENIED YOUR REQUEST FOR RELIEF BASED ON AN ALLEGED SUPPLIER'S ERROR INCLUDED IN YOUR BID ON WHICH CONTRACT NO. 62473-67-C- 3040 WITH THE SOUTHWEST DIVISION, NAVAL FACILITIES ENGINEERING COMMAND, SAN DIEGO, CALIFORNIA, WAS BASED. THE CONTRACT WAS FOR FURNISHING OF ALL PLANT LABOR, EQUIPMENT AND MATERIAL FOR THE CONSTRUCTION OF UTILITIES AT CAMP SAN ONOFRE, INCLUDING ELECTRICAL SYSTEM MODIFICATION AND GAS DISTRIBUTION SYSTEM, AND MISCELLANEOUS RELATED WORK ALL IN ACCORDANCE WITH PLANS AND SPECIFICATIONS. RELIEF WAS DENIED ON THE BASIS THAT YOU HAD VERIFIED YOUR BID WITH KNOWLEDGE OF THE FACTS WHICH PROMPTED THE CONTRACTING OFFICER TO REQUEST VERIFICATION AND THAT THE RESULTING ERROR WAS UNILATERAL -- NOT MUTUAL - AND THEREFORE DID NOT ENTITLE YOU TO THE RELIEF ASKED FOR.

YOUR LETTER OF JUNE 30, 1969, STATES, IN PERTINENT PART, THAT:

"SUBSEQUENT TO YOUR RESPONSE, NEW FACTS HAVE DEVELOPED IN THIS CASE, WHICH WE FEEL NECESSARILY REQUIRE AND DEMAND FURTHER ATTENTION AND EVALUATION FROM YOUR OFFICE. * * *

"FOLLOWING THE COMPLETION OF THE WORK CALLED OUT IN THE CONTRACT IN QUESTION AND ACTUAL USE OF THE INSTALLATIONS, THE UNITED STATES NAVY FOUND THAT THE MATERIALS CALLED OUT IN ITS SPECIFICATION WERE NOT CORRECT AND WERE NOT SUITABLE. INCIDENT THERETO, IT WAS NECESSARY TO INITIATE SUITABLE MODIFICATIONS. * * * THE MODIFICATION INITIATED BY THE UNITED STATES NAVY CALLS OUT THE PRECISE MATERIALS ON WHICH KEENAN PIPE AND SUPPLY COMPANY HAD BASED ITS ORIGINAL QUOTATION, AND WHICH ARE NOW BEING INSTALLED BY THE FRED EGGERS COMPANY.

"* * * IT APPEARS QUITE REASONABLE THAT THIS WOULD GIVE RISE TO POSSIBLE RE-EVALUATION FROM YOUR STANDPOINT AND A REDETERMINATION AS TO RESPONSIBILITY FOR REQUIRING ALLOWANCE OF AN INCREASE IN THE ORIGINAL BID OF THE FRED EGGERS COMPANY. SIMPLY STATED, IT APPEARS THAT THE ORIGINAL SPECIFICATIONS FURNISHED BY THE UNITED STATES NAVY WERE IN ERROR AND THAT AT ALL TIMES IT WAS INTENDED THAT SAID SPECIFICATIONS CALL OUT MATERIAL AS PER ACTUAL QUOTATION ON THE PART OF KEENAN PIPE AND SUPPLY COMPANY. THIS PRECISE MATERIAL IS NOW BEING INSTALLED THROUGH APPROPRIATE MODIFICATION AS ABOVE MENTIONED.'

YOU SEEM TO BASE YOUR REQUEST FOR RECONSIDERATION ON THE FACT THAT THE CHANGES IN SPECIFICATIONS CONFIRMED YOUR ALLEGATION OF PRICE ERROR AND THAT THE REVISED QUOTATIONS FROM YOUR SUPPLIER COVER THE PRECISE MATERIALS NOW BEING INSTALLED THROUGH CONTRACT MODIFICATIONS.

HOWEVER, THE QUESTION WHETHER A CONTRACT MAY BE REFORMED BY REASON OF ERROR RELATES BACK TO THE DATE BIDS ARE PUBLICLY OPENED AND DEPENDS UPON THE EVIDENCE RELATING TO THE BID PREPARATION AND THE EVENTS LEADING UP TO THE SUBMISSION OF THE BID. ONCE IT HAS BEEN DETERMINED THAT NO LEGAL BASIS EXISTS FOR CONTRACT REFORMATION, MATTERS OF CONTRACT PERFORMANCE AND ADMINISTRATION MAY NOT BE REGARDED AS HAVING ANY BEARING UPON THE LEGAL MATTER THERETOFORE DETERMINED.

MOREOVER, IT APPEARS THAT THE ACTIONS TAKEN WITH REFERENCE TO THE SPECIFICATIONS WERE IN CONSONANCE WITH THE CONTRACT "CHANGES" CLAUSE WHICH SPECIFICALLY PROVIDES THE PROCEDURES FOR EFFECTING CHANGES TO SPECIFICATIONS WITH EQUITABLE ADJUSTMENT TO THE CONTRACT PRICE. SINCE IT APPEARS THAT CONTRACT CHANGES WERE EFFECTED WITH ALLOWANCE OF ADDITIONAL COMPENSATION UNDER THE CONTRACT, WE SEE NO BASIS TO TAKE ANY FURTHER ACTION ON YOUR CLAIM FOR RELIEF.