B-127157, APR. 26, 1956

B-127157, APR. 26, 1956

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 29, 1956, WITH ENCLOSURES, FROM THE ASSISTANT ADMINISTRATOR, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE WOODHOUSE STATIONERY COMPANY, WASHINGTON, D.C., ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. GS-07S- 4682 WAS AWARDED.

BY INVITATION NO. DA-43832, THE FEDERAL SUPPLY SERVICE, REGION 7, FORT WORTH, TEXAS, REQUESTED BIDS--- TO BE OPENED JULY 19, 1955--- FOR FURNISHING A QUANTITY OF TYPEWRITER ERASERS WITH BRUSHES. IN RESPONSE, THE WOODHOUSE STATIONERY COMPANY SUBMITTED A BID DATED JULY 18 1955, OFFERING TO FURNISH THE TYPEWRITER ERASERS AT A PRICE OF $0.54 PER DOZEN. THE ABSTRACT OF BIDS SHOWS THAT THE SIX OTHER BIDS ON THE ERASERS WERE IN THE AMOUNTS OF $0.94, $0.945, $0.95 (TWO BIDS), $0.97 AND $1.04 PER DOZEN.

UPON BEING REQUESTED BY TELEGRAM DATED JULY 20, 1955, TO VERIFY ITS BID, THE WOODHOUSE STATIONERY COMPANY ADVISED THAT ITS BID PRICE OF $0.54 PER DOZEN FOR THE ERASERS DESCRIBED IN THE INVITATION WAS CORRECT. THE BID OF THE COMPANY WAS ACCEPTED ON JULY 22, 1955, AND ON THE SAME DATE, PURCHASE ORDER NO. DA-43832 WAS ISSUED REQUESTING DELIVERY OF THE ERASERS.

BY LETTER DATED JULY 28, 1955, THE WOODHOUSE STATIONERY COMPANY ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT ITS BID PRICE OF $0.54 PER DOZEN WAS BASED ON A TYPEWRITER ERASER WITHOUT BRUSH; AND THAT THE CORRECT PRICE FOR A TYPEWRITER ERASER WITH A BRUSH IS $1.0125 PER DOZEN. THE COMPANY REQUESTED THAT THE PURCHASE ORDER BE CANCELLED. IN REPLY, THE CONTRACTING OFFICER ADVISED THE COMPANY BY LETTER DATED JULY 29, 1955, THAT HE WAS WITHOUT AUTHORITY TO GRANT THE RELIEF REQUESTED BECAUSE THE COMPANY HAD VERIFIED ITS BID PRICE PRIOR TO AWARD. SUBSEQUENTLY, THE COMPANY BY LETTER DATED AUGUST 5, 1955, ADDRESSED ITS REQUEST FOR RELIEF TO THE COMMISSIONER, FEDERAL SUPPLY SERVICE, WASHINGTON, D.C. BY TELEGRAM DATED SEPTEMBER 13, 1955, THE PURCHASING OFFICER ADVISED THE COMPANY THAT, SINCE THERE WAS AN URGENT NEED FOR THE ERASERS, HE COULD NOT AWAIT THE DECISION OF THE COMMISSIONER ON THE COMPANY'S REQUEST FOR RELIEF, BUT THAT IT SHOULD MAKE AN IMMEDIATE SHIPMENT OF THE ERASERS AND SUBMIT A CLAIM FOR THE ADDITIONAL COMPENSATION BELIEVED DUE. BY LETTER DATED SEPTEMBER 20, 1955, THE ACTING DIRECTOR, NATIONAL BUYING DIVISION, FEDERAL SUPPLY SERVICE, WASHINGTON, D.C., ADVISED THE COMPANY THAT THE BUREAU COULD NOT GRANT THE RELIEF REQUESTED BECAUSE OF THE VERIFICATION OF ITS BID PRIOR TO AWARD. AFTER DELIVERY OF THE ERASERS, THE COMPANY, BY LETTER DATED NOVEMBER 11, 1955, REQUESTED THAT THE CONTRACT PRICE OF THE ERASERS BE INCREASED TO THE AMOUNT OF THE NEXT-LOWEST BID AND REQUESTED FURTHER THAT ITS REQUEST FOR RELIEF BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FOR CONSIDERATION. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED PHOTOSTATIC COPIES OF ITS SUPPLIER'S INVOICES WHICH SHOW THAT THE COMPANY WAS BILLED AT A PRICE OF $ 0.94 PER DOZEN FOR THE TYPEWRITER ERASERS.

THE PRIMARY QUESTION IS NOT WHETHER THE WOODHOUSE STATIONERY COMPANY MADE AN ERROR IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE INVITATION ISSUED IN THE PRESENT CASE WAS CLEAR AND UNAMBIGUOUS AS TO THE NEEDS OF THE GOVERNMENT. THE RESPONSIBILITY OF THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163, WHEREIN IT WAS STATED BY THE COURT OF CLAIMS OF THE UNITED STATES AS FOLLOWS:

"* * * THE PARTIES ARE DEALING AT ARMS LENGTH AND BIDDERS ARE PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICE AT WHICH THEY CAN PERFORM THE WORK SPECIFIED AT A REASONABLE PROFIT. IF THEY FAIL TO DO SO, AS PLAINTIFF DID IN THIS CASE, THE GOVERNMENT CANNOT FOR THAT REASON BE HELD FOR THE RESULTING LOSS.'

IT IS CLEAR THAT SUCH ERROR AS WAS MADE IN THE BID OF THE COMPANY WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT--- AS ADMITTED BY THE COMPANY--- AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 56, 61, WHEREIN THE SUPREME COURT OF THE UNITED STATES SAID:

"MISTAKE, TO BE AVAILABLE IN EQUITY, MUST NOT HAVE ARISEN FROM NEGLIGENCE, WHERE THE MEANS OF KNOWLEDGE WERE EASILY ACCESSIBLE. THE PARTY COMPLAINING MUST HAVE EXERCISED AT LEAST THE DEGREE OF DILIGENCE "WHICH MAY BE FAIRLY EXPECTED FROM A REASONABLE PERSON.'"

ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505. ALSO, SEE 20 COMP. GEN. 652, AND 26 ID. 415.

AT THE TIME THE BIDS IN THIS CASE WERE OPENED, THERE WAS SOME DOUBT ON THE PART OF THE CONTRACTING OFFICER AS TO THE CORRECTNESS OF THE BID SUBMITTED BY THE WOODHOUSE STATIONERY COMPANY AND THE COMPANY WAS REQUESTED TO VERIFY ITS BID. AFTER AN UNEQUIVOCAL VERIFICATION OF THE BID, THE CONTRACTING OFFICER WAS JUSTIFIED IN AWARDING THE CONTRACT ON THE COMPANY'S BID AS THE LOWEST RECEIVED. SEE CARNEGIE STEEL COMPANY V. CONNELLY, 89 N.J.L. 1, 97 A. 774; SHRIMPTON MFG. COMPANY V. BRIN, 59 TEX. CIV. APP. 352, 125 S.W. 942. THE FACT THAT THE COMPANY'S BID WAS NOT ACCEPTED UNTIL IT WAS OFFERED AN OPPORTUNITY TO, AND DID, VERIFY ITS BID PRICE PRECLUDES ANY ASSUMPTION THAT THE CONTRACTING OFFICER EXERCISED BAD FAITH OR ATTEMPTED TO TAKE ADVANTAGE OF THE COMPANY. SEE 27 COMP. GEN. 17.

IN THAT REGARD, THE CONTRACTING OFFICER HAS STATED THAT AFTER VERIFICATION HE HAD NO FURTHER DOUBT AS TO THE ACCURACY OF THE BID SINCE EXPERIENCE HAS DEVELOPED THAT THERE ARE OCCASIONS WHEN BIDDERS "DESIRE TO UNLOAD MERCHANDISE FOR CONVERSION TO CASH OR TO REDUCE A LONG SUPPLY.' FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE COMPANY'S BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD--- AND IN SUCH CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFYING THE PRICE SPECIFIED IN CONTRACT NO. GS-07S-4682.