B-100551, MAR 15, 1951

B-100551, MAR 15, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

I HAVE YOUR LETTER OF JANUARY 4, 1951, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER PURCHASE ORDER NO. (40-087) 51-2357, DATED OCTOBER 5, 1950, ISSUED TO J.E. DILWORTH COMPANY, MEMPHIS, TENNESSEE, MAY BE AMENDED TO INCREASE THE CONSIDERATION SPECIFIED FOR ITEM NO. 1, IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH SAID PURCHASE ORDER WAS BASED.

THE RECORD SHOWS THAT ON OCTOBER 5, 1950, MALLORY AIR FORCE SPECIALIZED DEPOT, MEMPHIS, TENNESSEE, REQUESTED ORAL QUOTATIONS FROM FOUR POTENTIAL SOURCES FOR THREE ITEMS OF CABLE FOR DELIVERY IN A VERY SHORT TIME; THAT J.E. DILWORTH COMPANY WAS THE ONLY COMPANY WHICH OFFERED TO FURNISH THE MATERIAL; AND THAT THE COMPANY QUOTED A PRICE OF $0.1830 PER FOOT FOR THE 6,500 FEET OF 1/4" CABLE EXTRA FLEXIBLE GALVANIZED STEEL COVERED BY ITEM 1. THE BID OF J.E. DILWORTH COMPANY ON THE THREE ITEMS WAS ACCEPTED BY TELEPHONE ON OCTOBER 5, 1950, AND PURCHASE ORDER NO. (40-087) 51-2357 OF THE SAME DATE WAS ISSUED IN CONFIRMATION THEREOF.

BY LETTER DATED NOVEMBER 21, 1950, J.E. DILWORTH COMPANY ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE ON ITEM 1 OF ITS BID. SAID LETTER IS, IN PART, AS FOLLOWS:

"WE QUOTED ON THE SUBJECT WIRE ROPE AS IS CUSTOMARY, ALLOWING THE AIR BASE HALF OF OUR COST. THIS AMOUNTS TO ROUGHLY 10% OFF OF CONSUMER PRICE, INASMUCH AS OUR COST IS 20% OFF.

"IN CHECKING THE SPECIFICATIONS AND FIGURING THE AIR BASE'S COST, WE INADVERTENTLY LISTED THE COST FIGURE INSTEAD OF THE COST PLUS FIGURE ON THIS PARTICULAR ITEM.

"ON RECEIVING OUR FACTORY INVOICE COVERING THE SHIPMENT, WE IMMEDIATELY PHONED YOUR MRS. HIGGENS AND WERE ADVISED THAT THE ORDER HAD BEEN PROCESSED AND IT WOULD BE NECESSARY TO CONTACT YOU TO OBTAIN A CHANGE ORDER COVERING THIS ITEM ONE TO AVOID OUR LOSING MONEY.

"TO SATISFY YOUR OWN MIND, WE WOULD SUGGEST YOUR CHECKING AROUND ON THE PRICE OF 1/4" 6 X 42 GALVANIZED TILLER ROPE. YOU WILL FIND THE LIST PRICE TO BE $24.00 PER 100 FT. DISTRIBUTOR DISCOUNT IS 20%.

"WE HAVE SPLIT THIS COST WITH YOU AND IF YOU WILL TAKE 10% OFF OF $24.00, YOU WILL FIND THE FIGURE TO BE $21.60 AS OUTLINED IN THIS LETTER."

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER J.E. DILWORTH COMPANY MADE AN ERROR IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE BID OF THE COMPANY WAS THE ONLY BID RECEIVED AND THEREFOR THERE WAS NO BASIS FOR COMPARISON OF BIDS. THE CONTRACTING OFFICER STATES THAT AT THE TIME OF THE ACCEPTANCE OF THE BID THERE WERE NO CIRCUMSTANCES OF SUCH NATURE AS TO CAUSE SUSPICION OF ERROR. THUS, THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. SINCE IT APPEARS THAT THE PRICE OF ITEM 1 COVERS THE COST THEREOF AND SINCE THE COMPANY WAS AWARDED TWO OTHER ITEMS TOTALING $428.94, WITH RESPECT TO WHICH NO ERROR IS ALLEGED, IT IS APPARENT THAT ENFORCEMENT OF THE CONTRACT WILL NOT BE UNCONSCIONABLE. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY, 100 C. CLS. 120, 163. IF, AS ALLEGED, THE COMPANY MADE AN ERROR IN ITS BID IN QUOTING ITS ACTUAL COST FOR THE CABLE AND FAILED TO INCLUDE ANY AMOUNTS TO COVER THE COST OF LOCATING THE MATERIAL, OTHER EXPENSES AND PROFIT, IT IS CLEAR THAT SUCH ERROR WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL - NOT MUTUAL - AND THEREFORE AFFORDS NO BASIS FOR GRANTING RELIEF TO THE COMPANY. SEE OGDEN & DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505, 507.

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR INCREASING THE PRICE OF ITEM 1 OF PURCHASE ORDER NO. (40-087) 51-2357, AS REQUESTED BY J. E. DILWORTH COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF FACTS BY THE CONTRACTING OFFICER, ARE RETURNED HEREWITH.