B-158980, MAR. 29, 1967

B-158980, MAR. 29, 1967

TO SCHURR AND FINLAY, INC.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 28, 1967, REQUESTING REVIEW OF OUR DECISION B-158980, DATED JUNE 20, 1966, WHICH DENIED YOUR REQUEST FOR RELIEF FROM AN ALLEGED MISTAKE IN YOUR BID UNDER CONTRACT NBY-67349 FOR THE CONSTRUCTION OF AN ELECTRICAL DISTRIBUTION SYSTEM (PIERS 1 AND 3 AND DRY DOCK 1), LONG BEACH NAVAL SHIPYARD, LONG BEACH, CALIFORNIA. FULL RECITAL OF THE FACTS WHICH WERE SET OUT IN OUR DECISION OF JUNE 20, 1966, IS NOT NECESSARY TO OUR REVIEW.

IN THAT DECISION, WE AGREED WITH THE PROCURING AGENCY THAT WHILE YOUR ALLEGATIONS MIGHT ESTABLISH THE EXISTENCE OF A MISTAKE IN YOUR BID, SUCH ALLEGATIONS DID NOT ESTABLISH BY CLEAR AND CONVINCING EVIDENCE BOTH THE FACT OF ERROR AND THE BID ACTUALLY INTENDED AS REQUIRED BY THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 2-406.3 BEFORE A BIDDER IS PERMITTED TO CORRECT HIS BID AFTER OPENING. WE FURTHER PREMISED OUR DECISION UPON THE FACT THAT, AFTER ALLEGING MISTAKE, YOU WERE GIVEN AN OPPORTUNITY PRIOR TO AWARD TO REVIEW AND CONFIRM YOUR BID OR REQUEST PERMISSION TO WITHDRAW BECAUSE OF ERROR. HOWEVER, YOU VERIFIED YOUR BID AS SUBMITTED AND STATED THAT IT WAS ACCEPTABLE. ACCORDINGLY, THE CONTRACT IN THE AMOUNT OF YOUR BID PRICE OF $428,153 WAS AWARDED TO YOU ON NOVEMBER 30, 1965.

YOUR LETTER OF FEBRUARY 28, 1967, STATES IN PERTINENT PART AS FOLLOWS:

"ON NOVEMBER 19, 1965, THE DAY FOLLOWING BID OPENING, MR. R. D. SCHURR, PRESIDENT AND MR. ROY LA MORA, ESTIMATOR, DID VISIT THE CONTRACTS DIVISION OF THE COMMANDER'S OFFICE, THE COGNIZANT OFFICE, AND NOT ONLY ORALLY DID WE TELL ABOUT OUR ERROR, BUT ALSO HAD OUR ESTIMATE SHEETS, WHICH YOU NOW HAVE, AND HAD THEM EXAMINED BY THE COGNIZANT OFFICE. HE DID IN FACT EXAMINE THE ESTIMATE SHEETS AND DID DETERMINE THAT WE HAD AN ERROR AND HAD NOT EXTENDED THE CABLE PRICE ON OUR BID SHEET NO. 1 OF 23 SHEETS. WE FEEL THAT YOUR OFFICE STILL HAS OUR ESTIMATE SHEETS TO VERIFY.

"WE POINT THIS OUT BECAUSE WE FEEL THAT YOUR OFFICE MUST NOT HAVE BEEN TOLD BY THE COGNIZANT OFFICE THAT THEY DID EXAMINE OUR ESTIMATE SHEETS ON NOVEMBER 19, 1965, THE DAY AFTER THE BIDS WERE RECEIVED. ALSO, WE DID NOT RECEIVE A COPY OF ANY CORRESPONDENCE BETWEEN THE COGNIZANT OFFICE AND YOUR OFFICE PERTAINING TO THE ABOVE CLAIM.

"AT THE TIME OF OUR VISIT, NOVEMBER 19TH, WE POINTED OUT TO THE CONTRACTS DIVISION THAT CORRECTION COULD STILL BE MADE AND THE GOVERNMENT WOULD HAVE A SUBSTANTIAL SAVING OVER THE NEXT BID.

"WE WERE ADVISED BY THE CONTRACTS DIVISION OFFICE THAT WE HAD ONLY TWO ALTERNATIVES, OF EITHER WITHDRAWING OUR BID OR ACCEPTING IT WITH ERROR. WE ASKED IF WE COULD NOT PRESENT IT TO THE COMPTROLLER GENERALS OFFICE AND THEY ADVISED US ONLY WHEN AND IF CONTRACT WAS ALREADY SIGNED. WE HAVE SINCE FOUND OUT THAT THIS IS NOT THE CASE, THAT WE SHOULD HAVE BEEN ADVISED THAT WE COULD HAVE SENT IN A REQUEST FOR RELIEF TO THE COMPTROLLER GENERALS OFFICE BEFORE WE SIGNED CONTRACT. WE, ALSO, SHOULD HAVE BEEN ADVISED THAT THE COGNIZANT OFFICE OR CONTRACTS DIVISION OFFICE COULD ONLY AUTHORIZE AN ERROR OF $1,000.00 OR LESS.'

THE RECORD BEFORE US SHOWS THAT MR. SCHURR PRESENTED WORKSHEETS IN SUPPORT OF THE CLAIM OF ERROR PRIOR TO AWARD. HOWEVER, THOSE SHEETS DID NOT, IN THE CONSIDERED OPINION OF THE CONTRACTING AGENCY, CONSTITUTE CLEAR AND CONVINCING EVIDENCE BOTH OF THE FACT OF ERROR OR THAT THE BID AS SUBMITTED WAS NOT AS INTENDED BECAUSE OF SUCH ERROR. WHILE AN ERROR APPARENTLY WAS MADE IN PREPARING THE BID, YOU WERE GIVEN AN OPPORTUNITY TO EITHER REQUEST WITHDRAWAL OR TO CONFIRM YOUR BID. YOU CHOSE TO CONFIRM YOUR BID AS SUBMITTED.

IT APPEARS THAT THERE ARE FOR APPLICATION HERE THE PRINCIPLES LAID DOWN IN THE CASES, PREVIOUSLY CITED, OF THE MASSMAN CONSTRUCTION CO. V. UNITED STATES, 102 CT.CL. 699 (CERTIORARI DENIED 325 U.S. 866), AND THE BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON CO., INC., 133 F.2D 399. IN DENYING RELIEF IN BOTH OF THESE CASES FOR THE AMOUNTS CLAIMED BY REASON OF ERROR IN BIDS--- WHICH WERE LATER ACCEPTED BY SUBSEQUENTLY EXECUTED CONTRACTS--- THE COURTS STATED, IN EFFECT, THAT WHERE THE CONTRACTOR, AS WELL AS THE GOVERNMENT, IS FULLY AWARE OF THE MISTAKE IN ITS BID AT THE TIME THE CONTRACT WAS SIGNED AND THE SIGNING BY THE CONTRACTOR WAS NOT IN ANY WAY INDUCED BY UNCONSCIONABLE CONDUCT--- FRAUD, MISTAKE, DURESS, ETC.--- ON THE PART OF THE GOVERNMENT OR BY ANY PROMISES FOR SUBSEQUENT RELIEF, THE CONTRACTOR CAN RECOVER NO MORE THAN THE CONTRACT PRICE. THE COURTS POINTED OUT THAT THE CONTRACTOR COULD NOT, ON ANY THEORY, CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NO CONTRACT.

WITH REFERENCE TO THE PROCEDURES FOR CONSIDERING ALLEGATIONS OF MISTAKES IN BID PRIOR TO AWARD, YOUR ATTENTION IS INVITED TO THE ABOVE CITED REGULATION (ASPR 2-406) WHICH PROVIDES THAT "IF THE BID IS VERIFIED, THE CONTRACTING OFFICER WILL CONSIDER THE BID AS ORIGINALLY SUBMITTED.' THESE PROCEDURES FOR PROCESSING AND CONSIDERING REQUESTS FOR RELIEF ON ACCOUNT OF BID ERRORS--- EITHER BEFORE OR AFTER AWARD--- ARE PUBLISHED IN THE CODE OF FEDERAL REGULATIONS AND CONSTITUTE LEGAL NOTICE THEREOF TO ALL CONCERNED PARTIES. ALTHOUGH PROCUREMENT AGENCIES ARE AUTHORIZED BY ASPR 2 -406.4 (B) TO REFORM CONTRACTS TO CORRECT MISTAKES NOT IN EXCESS OF $1,000, THE SAME STANDARD OF "CLEAR AND CONVINCING EVIDENCE" IS REQUIRED. UNDER THOSE PROCEDURES, IT WAS YOUR BURDEN TO PROVE THE EXISTENCE OF A BONA FIDE MISTAKE IN YOUR INTENDED BID PRIOR TO AWARD. THIS YOU DID NOT DO BUT CHOSE INSTEAD TO ACCEPT THE CONTRACT AND TO PERFORM IT AT YOUR BID PRICE. THERE THEN EXISTED NOT THE QUESTION OF MISTAKE IN BID BUT WHETHER A VALID CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF YOUR BID. UNDER THE PRINCIPLES ABOVE STATED, WE SEE NO LEGAL BASIS TO RELIEVE YOU FROM THE CONSEQUENCES OF YOUR CONTRACT BY INCREASING THE CONTRACT PRICE WITHOUT COMPENSATING BENEFIT TO THE GOVERNMENT.

ACCORDINGLY, UPON REVIEW WE HAVE NO ALTERNATIVE BUT TO SUSTAIN OUR DECISION OF JUNE 20, 1966.