B-126971, MAR. 7, 1956

B-126971, MAR. 7, 1956

TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 8, 1955, FROM THE DIRECTOR OF FISCAL POLICY AND PROCEDURE, OFFICE OF THE COMPTROLLER, SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MARYLAND, FORWARDING FOR DIRECT SETTLEMENT THE CLAIM OF FOREIGN LANGUAGE SERVICE FOR $960, THE AMOUNT STATED TO BE DUE BY REASON OF AN ERROR IN ITS BID ON WHICH CONTRACT NO. SASS-5643, DATED AUGUST 31, 1955, WAS AWARDED.

THE MATTER PRESENTED NOT ONLY INVOLVES PAYMENT FOR SERVICES RENDERED UP TO OCTOBER 31, 1955, BUT ALSO THE QUESTION AS TO WHETHER THE CONTRACTOR SHOULD BE REQUIRED TO RENDER FURTHER SERVICES AT THE CONTRACT PRICE IN VIEW OF THE ALLEGATION OF ERROR IN ITS BID. SINCE THE MATTER HAS NOT BEEN SUBMITTED BY AN OFFICER ENTITLED TO A DECISION (26 COMP. GEN. 993, AND 28 ID. 401), AND SINCE A DECISION APPEARS NECESSARY, THIS LETTER IS BEING ADDRESSED TO YOU.

IN RESPONSE TO INVITATION NO. SSF-2840, FOREIGN LANGUAGE SERVICE SUBMITTED A BID OFFERING TO FURNISH TO THE SOCIAL SECURITY ADMINISTRATION, BALTIMORE, MARYLAND, TRANSLATION AND DUPLICATION SERVICE AS REQUIRED DURING THE PERIOD FROM THE DATE OF AWARD THROUGH JUNE 30, 1956, FOR $12 PER HUNDRED WORDS ON EACH FINISHED ARTICLE WITH A $12 MINIMUM. THE CONTRACTOR WAS REQUIRED TO TRANSLATE NONTECHNICAL ENGLISH ARTICLES OF APPROXIMATELY 200 TO 600 WORDS INTO 20 DIFFERENT FOREIGN LANGUAGES AND TO MAKE DUPLICATES THEREFROM. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS RECEIVED WERE $43 PER HUNDRED WORDS WITH A MINIMUM OF $86 AND $125 PER HUNDRED WORDS WITH A MINIMUM OF $250. THE RECORD SHOWS THAT PRIOR TO AWARD OF THE CONTRACT THE CONTRACTING OFFICER TALKED WITH THE CONTRACTOR BY TELEPHONE AND CALLED ITS ATTENTION TO THE WIDE DIFFERENCE BETWEEN ITS BID AND THE OTHER TWO BIDS. AFTER THE CONTRACTOR HAD ASSURED THE CONTRACTING OFFICER THAT THE OTHER TWO BIDS WERE APPROXIMATELY WHAT IT HAD EXPECTED THEM TO BE AND THAT IT COULD PERFORM AT ITS BID PRICE, THE CONTRACT WAS AWARDED THE CONTRACTOR.

AFTER RECEIPT OF THE CONTRACTOR'S INVOICE IN THE AMOUNT OF $960, COVERING THE FIRST JOB UNDER THE CONTRACT, THE CONTRACTING OFFICER WROTE THE CONTRACTOR THAT IT WAS APPARENT THAT IT HAD NOT PROPERLY UNDERSTOOD THE TERMS OF THE INVITATION AND THE SIGNIFICANCE OF THE TELEPHONE CONVERSATION PRIOR TO AWARD AND AS CONTRACTING OFFICER HE WAS COMPELLED TO HOLD HIM TO THE TERMS OF THE CONTRACT AS INTERPRETED BY HIM (THE CONTRACTING OFFICER). THE CONTRACTING OFFICER STATED THAT THE GOVERNMENT INTENDED BIDDERS TO QUOTE THEIR PRICES PER HUNDRED WORDS IN THE ARTICLES TO BE TRANSLATED, NOT THE PRICE PER HUNDRED WORDS OF THE TRANSLATED MATERIAL. THE CONTRACTOR REPLIED THAT IT WAS APPARENT THAT THE CONTRACTING OFFICER "ALWAYS INTERPRETED CONTRACT NO. SASS-5643 IN A WAY THAT I NEVER UNDERSTOOD AND THAT WAS NEVER MADE PLAIN TO ME.' IT APPEARS FROM THE CONTRACTOR'S INVOICE AS PRESENTED, THAT THE BID AS INTENDED BY THE CONTRACTOR, IN ACCORDANCE WITH ITS INTERPRETATION OF THE INVITATION, IS 20 TIMES THE AMOUNT BASED UPON THE INTERPRETATION BY THE CONTRACTING OFFICER OF THE INVITATION FOR BID.

THE PRESENT CASE IS SIMILAR TO THE CASE OF UNITED STATES V. METRO NOVELTY MANUFACTURING CO., INC., 125 F.SUPP. 713. THERE THE COURT STATED AS FOLLOWS:

"CROSS MOTIONS ARE PRESENTED FOR SUMMARY JUDGMENT. PLAINTIFF SEEKS TO RECOVER $12,000 DAMAGES FROM DEFENDANT FOR ITS FAILURE TO CARRY OUTA $6,000 BID FOR UNIFORM ORNAMENTS. DEFENDANT CLAIMS A MISTAKE IN THE COMPUTATION OF THE BID. PLAINTIFF ADMITS THAT THE ERROR WAS SO GROSS THAT IT WAS PLACED ON NOTICE. IT FURTHER ADMITS THAT THE ONLY CONSEQUENCE OF DEFENDANT'S FAILURE TO PERFORM WAS THE ACCEPTANCE OF THE SECOND LOWEST BID AND THAT THERE WAS NO DAMAGE TO THE GOVERNMENT FROM THE DELAY IN EXECUTION WHICH RESULTED FROM DEFENDANT'S PARTICIPATION IN THE BIDDING.

"PLAINTIFF'S PURCHASING AGENT SOUGHT TO AVOID THE FORCE OF KEMP V. UNITED STATES, D.C. MD. 1941, 38 F.SUPP. 568, BY TELEPHONING THE DEFENDANT AND ASKING FOR A "VERIFICATION" OF THE BID AND BY HAVING IT "CONFIRMED" BY TELEPHONE AND LETTER FROM DEFENDANT'S PRESIDENT. PLAINTIFF, HOWEVER, DID NOT PUT DEFENDANT ON NOTICE OF THE MISTAKE WHICH IT SURMISED. REAFFIRMATION OF THE BID UNDER THESE CIRCUMSTANCES DOES NOT BAR THE DEFENSE OF RESCISSION.

"DEFENDANT'S MOTION FOR SUMMARY JUDGMENT IS GRANTED.'

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942 AND 27 ID. 17. IN THE PRESENT CASE ALTHOUGH AT THE TIME OF AWARD THE CONTRACTING OFFICER REQUESTED, BY TELEPHONE, THAT THE FOREIGN LANGUAGE SERVICE VERIFY ITS BID, HE SHOULD HAVE REALIZED THAT A BIDDER INTENTIONALLY WOULD NOT OFFER TO FURNISH THE SERVICES REQUIRED FOR $12 PER HUNDRED WORDS IN VIEW OF THE GREAT DIFFERENCES BETWEEN THE CONTRACTOR'S BID AND THE TWO OTHER BIDS RECEIVED AS WELL AS THE FACT THAT FOR THE PRIOR YEAR THE CONTRACT PRICE WAS $43 PER HUNDRED WORDS. IN THESE CIRCUMSTANCES, THERE APPEARS TO BE SERIOUS DOUBT THAT THE REQUEST FOR VERIFICATION AS MADE DID IN FACT MEET THE STANDARD REQUIRED BY THE METRO CASE.

THE CLAIM FOR THE SERVICES RENDERED WILL BE ALLOWED BY OUR OFFICE IN AN AMOUNT NOT IN EXCESS OF THE NEXT LOWEST CORRECT BID. IF THE SUBCONTRACTOR IS UNWILLING TO CONTINUE THE SERVICES FOR THE BALANCE OF THE CONTRACT PERIOD AT THE PRICE OFFERED BY THE SECOND LOW BIDDER THE CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY TO THE CONTRACTOR.