B-125115, AUG. 25, 1955

B-125115, AUG. 25, 1955

TO LEONARD HAIMES CO., INC.:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 6, 1955, REGARDING YOUR REPORTED INDEBTEDNESS TO THE UNITED STATES IN THE AMOUNT OF $542.87, WHICH AROSE BY REASON OF THE EXCESS COST OF PROCUREMENT SUSTAINED BY THE UNITED STATES DUE TO YOUR DEFAULT IN CONNECTION WITH THE PURCHASE OF A COFFEE AND TEA URN, AND A STAND AND CUP WARMER UNDER PURCHASE ORDER NO. 1399, DATED FEBRUARY 2, 1955.

IT APPEARS FROM THE RECORD THAT ON JANUARY 11, 1955, THE VETERANS ADMINISTRATION HOSPITAL AT TUCSON, ARIZONA, ISSUED INVITATION NO. 55 31--- TO BE OPENED JANUARY 28, 1955--- FOR FURNISHING ONE COFFEE AND TEA URN, AND ONE STAND AND CUP WARMER, IN STRICT ACCORDANCE WITH FEDERAL SPECIFICATIONS NO. X-239, DATED DECEMBER 8,1953, AND FEDERAL SPECIFICATIONS NO. VA-GC-133D, DATED OCTOBER 10, 1946, RESPECTIVELY. RESPONSE THERETO YOU SUBMITTED A BID WHEREIN YOU OFFERED TO FURNISH UNDER ITEM 1 ONE COFFEE AND TEA URN FOR THE PRICE OF $525 AND UNDER ITEM 2 ONE STAND AND CUP WARMER FOR THE PRICE OF $194, OR FOR THE TOTAL PRICE OF $719, LESS DISCOUNT OF ONE-FOURTH OF ONE PERCENT AMOUNTING TO $1.80 OR THE NET SUM OF $717.20. IN YOUR BID YOU STATED THAT YOU WERE QUOTING EXACTLY AS PER THE SPECIFICATIONS. THE RECORD FURTHER SHOWS THAT YOU DEFAULTED IN THE PERFORMANCE OF THE SUBJECT CONTRACT AND THAT THE REPLACEMENT COST AMOUNTED TO $1,260.07, AN EXCESS COST TO THE GOVERNMENT OF THE SUM OF $542.87.

IN YOUR LETTER YOU ADMIT THAT YOUR MR. S. GORDON MADE AN ERROR IN THE BID AND THAT YOU DO NOT DISPUTE THE FACT THAT MR. GORDON ASSUMED THAT HE WAS QUOTING IN ACCORDANCE WITH THE SPECIFICATIONS WHICH WOULD INDICATE THAT HE FAILED AND NEGLECTED TO SECURE AND REVIEW THE SPECIFICATIONS. THE BASIS OF YOUR CONTENTION APPEARS TO BE THAT THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN THAT THE DIFFERENCES IN THE PRICES QUOTED, AS BETWEEN YOUR BID AND THAT OF THE NEXT RESPONSIBLE BIDDER WERE VAST ENOUGH TO CAUSE ANY COMPETENT PURCHASING OFFICER TO IMMEDIATELY DISCERN AN OBVIOUS ERROR.

THERE CAN BE NO DOUBT THAT THE INVITATION TO BID WARNED ALL THE BIDDERS THAT ITEMS 1 AND 2 WERE TO BE FURNISHED IN STRICT ACCORDANCE WITH THE ATTACHED SPECIFICATIONS AND IT IS OF LITTLE CONSEQUENCE WHETHER THE SPECIFICATIONS WERE ATTACHED TO THE INVITATION TO BID. IT IS CLEAR THAT MR. GORDON FAILED TO SECURE AND REVIEW A COPY OF THE SPECIFICATIONS AND THEREFORE, ANY ERROR THAT WAS MADE BY HIM WAS DUE SOLELY TO MR. GORDON'S NEGLIGENCE, CARELESSNESS OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS, THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE YOU TO ANY RELIEF WHATEVER. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. IN REPORTING THE MATTER TO OUR OFFICE, THE ADMINISTRATIVE OFFICE REPORTS THAT SINCE THERE WAS A WIDE VARIANCE IN THE BIDS RECEIVED IT WAS NOT CONSIDERED THAT THE ERROR WAS APPARENT TO THE CONTRACTING OFFICER.

THE PRIMARY QUESTION HERE FOR CONSIDERATION IS NOT WHETHER YOU MADE AN ERROR IN YOUR BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF YOUR BID. THERE WAS NOTHING IN YOUR BID TO INDICATE ANY ERROR IN YOUR BID AND NO ALLEGATION OF ERROR WAS MADE BY YOU UNTIL AFTER AWARD. THE ACCEPTANCE OF YOUR BID, UNDER THE CIRCUMSTANCES INVOLVED, 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; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75; 20 COMP. GEN. 652; AND 26 COMP. GEN. 415. THE RIGHT, WHICH VESTED IN THE UNITED STATES UPON SUCH ACCEPTANCE, TO HAVE PERFORMANCE IN STRICT ACCORD WITH THE TERMS OF THE ACCEPTED BID FOR THE CONSIDERATION NAMED THEREIN, CANNOT BE GIVEN AWAY OR SURRENDERED BY ANY OFFICER OF THE GOVERNMENT. SEE UNITED STATES V. AMERICAN SALES CORPORATION, 27 E.2D 389, AFFIRMED 32 F.2D 141 AND CERTIORARI DENIED 280 U.S. 574; PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C.CLS. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 C.CLS. 584, 607, CERTIORARI DENIED 292 U.S. 645. IN THE ABSENCE OF ANY EVIDENCE THAT THE CONTRACTING OFFICER FAILED TO ACT IN GOOD FAITH, YOU ARE ADVISED THAT IT IS THE INVARIABLE RULE OF OUR OFFICE TO ACCEPT THE REPORT OF THE ADMINISTRATIVE AGENCY. CONSEQUENTLY, THE EXCESS COSTS FOR WHICH YOU WERE BILLED APPEAR TO BE CORRECT AND PROPER.

IN VIEW OF THE FOREGOING FACTS AND CITED LEGAL AUTHORITIES, I FIND NO LEGAL BASIS FOR RELIEVING YOU OF YOUR INDEBTEDNESS TO THE UNITED STATES. ACCORDINGLY, IT IS REQUESTED THAT YOU PROMPTLY REMIT TO OUR OFFICE A CHECK OR MONEY ORDERS IN THE AMOUNT OF $542.87 MADE PAYABLE TO THE UNITED STATES GENERAL ACCOUNTING OFFICE. IN THE EVENT YOU ELECT NOT TO EFFECT SETTLEMENT OF YOUR INDEBTEDNESS IN THIS MANNER, THE ENTIRE MATTER WILL BE REFERRED TO THE DEPARTMENT OF JUSTICE FOR APPROPRIATE ACTION.