A-60211, MARCH 2, 1935, 14 COMP. GEN. 680

A-60211, MARCH 2, 1935, 14 COMP. GEN. 680

MISTAKE IN BIDS - CODE COMPLIANCE IF THE NOTICE OF WITHDRAWAL OF THE LOWEST BID FOR NONCOMPLIANCE WITH THE APPLICABLE APPROVED CODE WAS NOT RECEIVED BY THE UNITED STATES OFFICER PRIOR TO ACCEPTANCE OF THE BID, AND AN AWARD WAS LATER REQUIRED TO BE MADE TO THE NEXT TO THE LOWEST BIDDER BECAUSE OF THE WITHDRAWAL OF THE LOWEST BID, ANY DIFFERENCE IN COST TO THE GOVERNMENT IS CHARGEABLE TO THE LOWEST BIDDER.

ACTING COMPTROLLER GENERAL ELLIOTT TO A. W. SMITH, REGIONAL FISCAL AGENT, FOREST SERVICE, MARCH 2, 1935:

THERE HAS BEEN RECEIVED YOUR LETTER OF FEBRUARY 1, 1935, AS FOLLOWS:

I AM ATTACHING HERETO A COPY OF AN INFORMAL DECISION, RENDERED BY TELEGRAM, FROM MR. FRANK HEALY, CHIEF, GOVERNMENT CONTRACTS BRANCH OF THE NATIONAL RECOVERY ADMINISTRATION, ADDRESSED TO THE REGIONAL DIRECTOR OF THE N.R.A. IN REGARD TO THE MATTER OF CODE COMPLIANCE BY THE PIRU ROCK COMPANY.

THIS FIRM, AS INDICATED BY THE COMPLETE FILE WHICH I AM ATTACHING FOR YOUR INFORMATION, WAS AWARDED A BID FOR 750 SACKS OF CEMENT TO BE USED ON A STATE CCC PROJECT BUT DEFAULTED BECAUSE OF AN ALLEGED UNINTENTIONAL VIOLATION OF THE CODE FOR ITS INDUSTRY. ACTION IN THE MATTER OF REAWARDING THE BID WAS WITHHELD PENDING A DETERMINATION BY THE N.R.A. ADMINISTRATOR IN ACCORDANCE WITH YOUR DECISION (A-57106/A 57573) OF OCTOBER 31, 1934, TO THE SECRETARY OF AGRICULTURE.

UPON RECEIPT OF THE ATTACHED INFORMAL DECISION OF THE N.R.A. ADVISING THAT THE FOREST SERVICE WOULD BE JUSTIFIED IN MAKING AWARD TO THE NEXT HIGHEST BIDDER WE INSTRUCTED OUR CONTRACTING OFFICER TO MAKE SUCH REAWARD.

THERE NOW ARISES THE QUESTION OF COLLECTING FROM THE PIRU ROCK COMPANY THE AMOUNT OF $45 REPRESENTING ADDITIONAL COST TO THE GOVERNMENT OCCASIONED BY THE DEFAULT OF THIS BIDDER. I HESITATE TO CALL UPON THIS DEALER TO PAY THESE ADDITIONAL COSTS WITHOUT KNOWING WHAT YOUR ATTITUDE WOULD BE IN THAT REGARD, IN VIEW OF YOUR DECISION THAT YOU WOULD "NOT BE REQUIRED TO OBJECT TO THE USES OF APPROPRIATED MONEYS FOR MAKING PAYMENT UNDER A CONTRACT AWARDED TO THE NEXT LOW BIDDER, IN EVENT THE CONTRACT IS OTHERWISE CORRECT, WHEN THE ADMINISTRATOR FOR INDUSTRIAL RECOVERY HAS DETERMINED THAT THE LOWEST BIDDER WAS NOT COMPLYING WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION.' THE INFORMAL RULING OF THE CHIEF OF GOVERNMENT CONTRACTS BRANCH, N.R.A., IS NOT SPECIFIC ON THE POINT OF CODE VIOLATION BUT THE INFERENCE IS THAT HIS BID WAS IN VIOLATION OF THE CODE FOR HIS INDUSTRY INASMUCH AS THE N.R.A. AUTHORIZES REAWARD TO THE NEXT HIGHEST BIDDER.

THE PAPERS TRANSMITTED BY YOU INDICATE THAT IN ACCORDANCE WITH AN ADVERTISEMENT DATED DECEMBER 26, 1934, BIDS WERE REQUESTED FOR OPENING JANUARY 3, 1935, FOR THE DELIVERY OF 750 SACKS OF CEMENT AND THAT THE BID OF PIRU ROCK COMPANY, LTD., WAS ACCEPTED IN AN ORDER OF JANUARY 4, 1935, AND IT APPEARS THAT IN A LETTER OF JANUARY 4, 1935, THE SAID COMPANY ALLEGED THAT IT MADE A MISTAKE IN FAILING TO SUBMIT BID PRICES IN ACCORDANCE WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION AND REQUESTED, IN EFFECT, THAT IT BE PERMITTED TO WITHDRAW ITS BID OR THAT ITS BID BE CORRECTED TO INCLUDE SUCH OMITTED DIFFERENCE BETWEEN ITS BID PRICE AND THE PRICE FILED WITH THE APPLICABLE CODE AUTHORITY, AND THAT A REPRESENTATIVE OF THE CODE AUTHORITY IN LETTER OF JANUARY 4, 1935, STATED THAT THE BID WAS NOT IN ACCORDANCE WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION.

IT DOES NOT APPEAR WHETHER THE LETTER OF JANUARY 4, 1935, WAS RECEIVED BEFORE OR AFTER THE ISSUANCE OF THE ORDER OF JANUARY 4, 1935, ACCEPTING THE BID OF THE PIRU ROCK COMPANY, LTD., FOR THE DELIVERY OF THE CEMENT. IF IT WAS NOT RECEIVED UNTIL AFTER THE BID WAS ACCEPTED SUCH ACCEPTANCE IMPOSED ON THE COMPANY THE LEGAL OBLIGATION TO MAKE DELIVERIES IN ACCORDANCE THEREWITH OR PAY THE UNITED STATES ANY DAMAGES RESULTING FROM DEFAULTS IN PERFORMANCE. SEE UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88. THE FACT THAT THE BID MAY NOT HAVE BEEN IN ACCORDANCE WITH THE APPLICABLE APPROVED CODE OF FAIR COMPETITION IS NOT A MATTER OF CONCERN TO THE UNITED STATES AS CONTRACTOR AS THE BIDDING AND SUBMISSION OF THE REQUIRED CERTIFICATE OF COMPLIANCE WITH THE CODE WERE THE CONCERN OF THE PIRU ROCK COMPANY, LTD., AND IT IS NOTED THAT SAID COMPANY SUBMITTED THE REQUIRED CERTIFICATE. THE UNITED STATES WAS JUSTIFIED IN RELYING THEREON AND ACCEPTING THE BID AND, AS STATED, IF THE NOTICE OF WITHDRAWAL OF THE BID AND NOTICE FROM THE CODE AUTHORITY THAT THE BID WAS NOT IN ACCORDANCE WITH THE APPLICABLE APPROVED CODE WERE NOT RECEIVED PRIOR TO THE ACCEPTANCE OF THE BID DEMAND SHOULD BE MADE ON THE PIRU ROCK COMPANY, LTD., FOR THE DIFFERENCE IN COST, AND IN EVENT OF FAILURE TO MAKE THE PAYMENT OF THE LOSS RESULTING TO THE UNITED STATES THE MATTER SHOULD BE REPORTED HERE IN ACCORDANCE WITH THE PROCEDURE STATED IN 7 COMP. GEN. 193 FOR COLLECTION. IF SUCH NOTICES WERE RECEIVED PRIOR TO THE ACCEPTANCE OF THE BID, THE MATTER OF CODE COMPLIANCE SHOULD HAVE BEEN SUBMITTED TO THE NATIONAL INDUSTRIAL RECOVERY ADMINISTRATION FOR DETERMINATION IN ACCORDANCE WITH EXECUTIVE ORDER NO. 6646 OF MARCH 14, 1934.