B-122666, MAY 13, 1955

B-122666, MAY 13, 1955

PRECIS-UNAVAILABLE

SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MARCH 11, 1955, WITH ENCLOSURES, FROM THE BUREAU OF SUPPLIES AND ACCOUNTS (R111 L4/NT4-29), IN REPLY TO LETTER DATED FEBRUARY 1, 1955, WITH WHICH WAS FORWARDED FOR REPORT A LETTER DATED JANUARY 19, 1955, FROM EFENGEE ELECTRICAL SUPPLY COMPANY, INC., CONCERNING CERTAIN ERRORS ALLEGED TO HAVE BEEN MADE IN ITS BIDS ON WHICH CONTRACTS NOS. N155S-13451 AND N155S-13408 ARE BASED.

INVITATION NO. 155(2)22-55 (CONTRACT N155S-13451) REQUESTED BIDS - TO BE OPENED AUGUST 24, 1954 - FOR FURNISHING TOGGLE AND SAFETY SWITCHES IN ACCORDANCE WITH PRESCRIBED SPECIFICATIONS, INCLUDING DESIGNATED REQUIREMENTS AS TO THE PRESERVATION, PACKAGING, PACKING AND MARKING OF THE MATERIAL. IN RESPONSE THERETO, THE EFENGEE ELECTRICAL SUPPLY COMPANY, INC., SUBMITTED A BID WHEREIN IT OFFERED TO DELIVER 1,000 TOGGLE SWITCHES UNDER ITEM 1 AT A PRICE OF $0.85 EACH OR A TOTAL CONSIDERATION OF $850. THE BID ORIGINALLY SPECIFIED AN ACCEPTANCE PERIOD OF 15 DAYS BUT WAS SUBSEQUENTLY EXTENDED, IN AN EFFORT TO OBTAIN FAVORABLE CONSIDERATION THEREOF, TO SEPTEMBER 18, 1954. THIS BID, BEING THE LOWEST RECEIVED, WAS ACCEPTED BY PRELIMINARY NOTICE OF AWARD DATED SEPTEMBER 17, 1954, AND CONFIRMED BY THE ISSUANCE OF CONTRACT NO. N155S-13451.

UPON BEING INFORMED THAT THE TOGGLE SWITCH OFFERED FOR DELIVERY TO THE GOVERNMENT FAILED TO MEET THE CONTRACT SPECIFICATIONS, THE CONTRACTOR, BY LETTER DATED DECEMBER 8, 1954, ALLEGED THAT ITS BID HAD BEEN BASED IN ERROR ON FURNISHING THE REJECTED TOGGLE SWITCH AND REQUESTED A "NO COST TERMINATION" OF THE ORDER. BY LETTER DATED DECEMBER 17, 1954, THE CONTRACTOR WAS INFORMED THAT, SINCE ACCEPTABLE SUPPLIES WERE READILY AVAILABLE AND THE ITEM WAS STILL REQUIRED, ITS REQUEST COULD NOT BE GRANTED. BY LETTER OF DECEMBER 29, 1954, THE CONTRACTOR REQUESTED RECONSIDERATION OF THE DENIAL OF ITS REQUEST ON THE BASIS THAT AN HONEST MISTAKE HAD BEEN MADE AND ALLEGED THAT IT HAD MADE AN ADDITIONAL MISTAKE IN THAT IT HAD OVERLOOKED THE SPECIAL PACKAGING AND MARKING REQUIREMENTS OF THE CONTRACT. IN LETTER DATED JANUARY 7, 1955, THE CONTRACTING OFFICER REAFFIRMED HIS PRIOR POSITION THAT NO BASIS EXISTED FOR A NO COST CANCELLATION OF THE CONTRACT AND POINTED OUT THAT THE CONTRACTOR'S BID, WHILE SUPPLEMENTED BY INFORMATION AS TO THE LOCATION AND NAME OF THE PROPOSED SUPPLIER, DID NOT INDICATE THAT IT WAS BASED ON A SPECIFIC TOGGLE SWITCH; THAT THE BID PRICE IN COMPARISON WITH OTHER BIDS RECEIVED WAS NOT SO LOW AS TO BE UNREASONABLE OR TO CAUSE THE CONTRACTING OFFICER TO SUSPECT A MISTAKE IN BID; AND, THAT IT WAS THE RESPONSIBILITY OF EACH BIDDER TO DETERMINE THAT THE SUPPLIES IT PROPOSED TO FURNISH CONFORMED WITH THE REQUIRED SPECIFICATIONS. UNDER DATE OF JANUARY 31, 1955, THE CONTRACTOR ADVISED THAT IT HAD CANCELLED THE ORDER PLACED WITH ITS ORIGINAL SUPPLIER; THAT ARRANGEMENTS WERE BEING MADE WITH ANOTHER SUPPLIER FOR THE REQUIRED MATERIAL; AND AGAIN REFERRED TO ITS ALLEGED ERROR IN FAILING TO INCLUDE "THE SPECIAL PACKAGING AND PRESERVATION CHARGES" IN ITS BID. FINALLY, THE RECORD SHOWS THAT BY LETTER OF FEBRUARY 4, 1955, THE CONTRACTOR AGAIN REQUESTED RECONSIDERATION OF ITS REQUEST TO CANCEL THE CONTRACT AT NO COST OR, IN THE ALTERNATIVE, THAT IT BE PERMITTED TO DELIVER THE REQUIRED TOGGLE SWITCHES AT ITS ALLEGED COST PRICE, INCLUDING THE REQUIRED PACKAGING, OF $1.0825 EACH.

IT THUS APPEARS THAT EVERY OPPORTUNITY HAS BEEN AFFORDED THE CONTRACTOR TO EFFECT DELIVERY OF THE TOGGLE SWITCHES AND THAT, NOTWITHSTANDING THAT DELIVERY WAS REQUIRED WITHIN 45 DAYS AFTER DATE OF THE CONTRACT, OR BY NOVEMBER 1, 1954, NO PART THEREOF HAS BEEN DELIVERED NOR HAS ADMINISTRATIVE ACTION BEEN TAKEN TO TERMINATE THE CONTRACT.

INVITATION NO. 155(2)-38-55 (CONTRACT NO. N155S-13408) REQUESTED BIDS - TO BE OPENED AUGUST 19, 1954 - FOR FURNISHING TOGGLE AND SAFETY SWITCHES IN ACCORDANCE WITH PRESCRIBED SPECIFICATIONS, INCLUDING - AS IN THE CASE OF THE INVITATION DISCUSSED ABOVE - CERTAIN DESIGNATED REQUIREMENTS AS TO THE PRESERVATION, PACKAGING, PACKING AND MARKING OF THE MATERIAL. RESPONSE THERETO, THE EFENGEE ELECTRICAL SUPPLY COMPANY, INC., SUBMITTED A BID WHEREIN IT OFFERED TO DELIVER 6,000 TOGGLE SWITCHES UNDER ITEM 2 AT A PRICE OF $0.145 EACH OR A TOTAL CONSIDERATION OF $870, LESS 2 PERCENT DISCOUNT FOR PROMPT PAYMENT. THE BID SPECIFIED AN ACCEPTANCE PERIOD OF 15 DAYS BUT WAS SUBSEQUENTLY EXTENDED TO SEPTEMBER 18, 1954.

THE RECORD SHOWS THAT THE BAITINGER ELECTRIC COMPANY WAS THE LOW BIDDER ON ITEM 2 AT A UNIT PRICE OF $0.1345 EACH, BUT SINCE THIS BIDDER OFFERED THE MATERIAL PACKED 10 PER CARTON IN LIEU OF 1 PER BOX, 10 BOXES PER CARTON, AS SPECIFIED AND REQUIRED, THE BID WAS REJECTED. THE EFENGEE ELECTRICAL SUPPLY COMPANY, INC., DID NOT TAKE ANY EXCEPTION TO ANY REQUIREMENT OF THE INVITATION AND, ACCORDINGLY, BEING THE LOWEST RESPONSIVE BIDDER, WAS AWARDED ITEM 2 UNDER CONTRACT NO. N155S-13408, DATED SEPTEMBER 16, 1954.

THE RECORD FURTHER SHOWS THAT THE FACTS PERTAINING TO THIS CONTRACT ARE SIMILAR IN ALL MATERIAL RESPECTS TO THOSE SET FORTH ABOVE WITH RESPECT TO CONTRACT NO. N155S-13451. IN A LETTER DATED DECEMBER 13, 1954, THE CONTRACTOR ADVISED THAT IT HAD BEEN INFORMED BY ITS SUPPLIER THAT THE MATERIAL OFFERED FOR DELIVERY TO THE GOVERNMENT HAD BEEN REJECTED FOR IMPROPER PACKAGING; THAT ITS BID PRICE DID NOT INCLUDE A CHARGE FOR THE PACKAGING AND MARKING REQUIREMENTS; AND REQUESTED THAT IT BE RELEASED FROM FURNISHING THE MATERIAL. BY LETTER OF DECEMBER 28, 1954, THE CONTRACTOR WAS INFORMED THAT ITS BID DID NOT TAKE ANY EXCEPTIONS TO THE PACKAGING REQUIREMENTS; HENCE, IT WAS CONSIDERED THAT ITS BID MET ALL REQUIREMENTS AND FURTHER THAT ITS BID PRICE WAS NOT OUT OF LINE WITH THE PRICES OF OTHER BIDDERS. ALSO, THE CONTRACTOR WAS REQUESTED TO ADVISE BY JANUARY 10, 1955, OF ITS INTENTION TO COMPLY WITH THE PACKAGING REQUIREMENTS AND DELIVER, SINCE DELIVERY WAS AT THAT TIME DELINQUENT. THE CONTRACTOR FAILED TO REPLY AND ON JANUARY 25, 1955, A NOTICE OF DEFAULT TERMINATION WAS ISSUED TO THE CONTRACTOR WITH AN EFFECTIVE DATE OF FEBRUARY 8, 1955. IN THIS CONNECTION, AS IN THE CASE OF CONTRACT NO. N155S-13451, IT IS NOTED THAT THE CONTRACTOR HAD ADEQUATE OPPORTUNITIES TO REVIEW ITS PRICES, FIRST, WHEN IT AGREED TO AN EXTENSION IN ITS ACCEPTANCE PERIOD; SECOND, UPON RECEIPT OF THE PRELIMINARY NOTICE OF AWARD ON SEPTEMBER 16, 1954; AND FINALLY UPON RECEIPT OF THE CONTRACT ON OCTOBER 4, 1954. NO ALLEGATION OF ERROR, HOWEVER, WAS MADE UNTIL LONG AFTER DELIVERY WAS DELINQUENT.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER THE EFENGEE ELECTRICAL SUPPLY COMPANY, INC., MADE ERRORS IN ITS BIDS AS ALLEGED, BUT WHETHER VALID AND BINDING CONTRACTS WERE CONSUMMATED BY THE ACCEPTANCE THEREOF. THE CONTRACTING OFFICER HAS STATED THAT, PRIOR TO AWARD, HE DID NOT HAVE ANY REASON TO SUSPECT ANY ERROR IN THE BIDS OF THE CONTRACTOR. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BIDS WAS IN GOOD FAITH - NO ERROR HAVING BEEN ALLEGED BY THE CONTRACTOR UNTIL LONG AFTER AWARD WAS MADE IN EACH INSTANCE. THE ACCEPTANCE OF THE BIDS, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED VALID AND BINDING CONTRACTS WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO, INCLUDING THE RIGHT TO HAVE PERFORMANCE STRICTLY IN ACCORDANCE WITH THE TERMS OF THE CONTRACTS. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO DIVEST THE UNITED STATES OF SUCH VESTED RIGHTS. UNITED STATES V. AMERICAN SALES CORPORATION, 27 F. 2D 389, AFFIRMED 32 ID. 141, CERTIORARI DENIED, 280 U.S. 574.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION TO BID IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C. CLS. 120, 163. IT IS CLEAR THAT IF ERRORS WERE MADE IN THE BIDS OF THE CONTRACTOR THEY WERE DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WERE IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERRORS AS WERE MADE WERE UNILATERAL - NOT MUTUAL - AND, CONSEQUENTLY, DO NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE OGDEN & DOUGHERTY V. UNITED STATES, 102 C. CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505 AND THE CASES CITED THEREIN. ALSO, SEE 20 COMP. GEN. 652; 26 ID. 415; AND 30 ID. 509.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE IS NO LEGAL BASIS FOR RELEASING EFENGEE ELECTRICAL SUPPLY COMPANY, INC., FROM THE TERMS OF THE CONTRACTS HERE INVOLVED.