B-129571, NOV. 1, 1956

B-129571, NOV. 1, 1956

TO HONORABLE RAYMOND BLATTENBERGER, PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 22, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THE HALLOWELL COMPANY, NINTH AND SANSOM STREETS, PHILADELPHIA, PENNSYLVANIA, SHOULD BE REQUIRED TO PERFORM THE WORK HEREINAFTER REFERRED TO, IN ACCORDANCE WITH ITS ORIGINAL QUOTATION, OR WHETHER ITS BID MAY BE INCREASED FROM $407 TO $499, THE LATTER BEING THE AMOUNT OF THE NEXT LOW BID RECEIVED.

THE RECORD SHOWS THAT YOUR INVITATION TO BID, JACKET NO. 391150, REQUESTED PRICES FOR THE PRINTING AND BINDING OF 2,463 COPIES OF A BOOK CONTAINING 116 PAGES FOR SHIPMENT ON OR BEFORE NOVEMBER 9, 1956. THE BIDS WERE OPENED ON OCTOBER 11, 1956, AND IT WAS FOUND THAT THE HALLOWELL COMPANY WAS THE LOW BIDDER AT A PRICE OF $407. FIVE OTHER BIDS WERE RECEIVED WHICH RANGED IN PRICE FROM $499 TO $700. THE BID OF THE HALLOWELL COMPANY BEING THE LOWEST AND IN ACCORDANCE WITH THE SPECIFICATIONS, NOTICE OF AWARD WAS MAILED TO THE COMPANY ON OCTOBER 12, 1956, AND PURCHASE ORDER NO. 5991 WAS MAILED TO THEM ON THE SAME DAY.

IT IS REPORTED THAT AFTER THE RECEIPT OF THE NOTICE OF AWARD AND PURCHASE ORDER, A REPRESENTATIVE OF THE HALLOWELL COMPANY TELEPHONED THE CONTRACTING OFFICER AND ADVISED THAT UPON CHECKING THEIR QUOTATION THEY HAD DISCOVERED AN ERROR IN THEIR BID, IT BEING STATED THAT THE ERROR OCCURRED WHEN A CHARGE OF $27.50 WAS MADE FOR A BINDING WHEN THE FIGURE FOR BINDING SHOULD HAVE BEEN $275. IT WAS EXPLAINED BY THE CONTRACTOR'S REPRESENTATIVE THAT THE ERROR WAS MADE BY THE ESTIMATOR WHEN MULTIPLYING THE UNIT COST BY THE TOTAL QUANTITY OF BOOKS. BY LETTER OF OCTOBER 15, 1956, THE CONTRACTOR REQUESTED THAT THE DIFFERENCE BE ALLOWED OR THAT THE TOTAL PRICE BE CHANGED TO THE NEXT HIGHEST FIGURE RECEIVED FOR PRODUCING THIS JOB.

YOU STATE THAT THE CONTRACTING OFFICER DID NOT NOTE BEFORE AWARDING THE CONTRACT FOR THE WORK THAT THE BID BY THE HALLOWELL COMPANY MAY HAVE BEEN IN ERROR BECAUSE THE GOVERNMENT PRINTING OFFICE ESTIMATE OF $478.72 WAS NOT MUCH HIGHER THAN THE AMOUNT BID BY THIS FORM; BUT THAT, HOWEVER, SINCE THE CONTRACTOR HAD CLAIMED AN ERROR IN BID AND HAD REQUESTED THAT ITS BID BE INCREASED UP TO THE NEXT LOW BID ($499 QUOTED BY MACCALA AND COMPANY), YOU ADVISED THE CONTRACTOR NOT TO START PRODUCTION ON THE ORDER UNTIL THE QUESTION IS RESOLVED.

IN VIEW OF THE FACT THAT THE CONTRACTOR'S BID PRICE OF $407 WAS IN LINE WITH THE NEXT LOW BID AND THE GOVERNMENT PRINTING OFFICE ESTIMATE, THERE WAS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR, AND THUS TO REQUIRE VERIFICATION BEFORE AWARD. THE AWARD OF THE CONTRACT TO THE HALLOWELL COMPANY, THEREFORE, APPEARS TO HAVE BEEN PROPER. INSOFAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID IN THIS CASE WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. ACCORDINGLY, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

UNDER THE FACTS REPORTED, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFICATION OF THE CONTRACT IN THIS CASE TO PERMIT PAYMENT OF AN AMOUNT GREATER THAN THE STIPULATED CONTRACT PRICE.