B-133736, OCT. 1, 1957

B-133736, OCT. 1, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 9, 1957, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION CONCERNING THE REQUEST OF J. W. C. BUCKLEY LUMBER COMPANY FOR THE RESCISSION OF CONTRACT NO. DA-09-026- ENG-56568, ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID UPON WHICH THE CONTRACT IS BASED.

THE CONTRACT WAS ENTERED INTO UNDER DATE OF APRIL 18, 1957, BETWEEN THE J. W. C. BUCKLEY LUMBER COMPANY AND THE PROCUREMENT BRANCH, SOUTH ATLANTIC DIVISION, CORPS OF ENGINEERS, UNITED STATES ARMY, ATLANTA, GEORGIA, AT A LUMBER AUCTION CONDUCTED IN ATLANTA ON APRIL 17, 18 AND 19, 1957. THE J. W. C. BUCKLEY LUMBER COMPANY WAS REPRESENTED AT THE AUCTION BY MR. T. G. TILFORD, WHO SUBMITTED A LETTER DATED APRIL 13, 1957, SIGNED BY J. W. C. BUCKLEY AS OWNER OF J. W. C. BUCKLEY LUMBER COMPANY, AUTHORIZING HIM TO REGISTER AT THE AUCTION AND TO SUBMIT BIDS IN THE NAME OF THE COMPANY.

ON INVITATION NO. 278, MR. TILFORD SUBMITTED A BID IN THE NAME OF J. W. C. BUCKLEY LUMBER COMPANY IN THE AMOUNT OF $91.19 PER MBM FOR NO. 1 SOUTHERN PINE. INVITATION NO. 278 COVERED THE FURNISHING AND DELIVERY OF 15,300 FBM, GRADE-MARKED LUMBER TO THE TINKER AIR FORCE BASE, OKLAHOMA, SHIPMENT OF THE LUMBER TO BE MADE IN TIME TO ARRIVE AT DESTINATION ON OR BEFORE MAY 7, 1957. THE THREE OTHER BIDS RECEIVED ON THIS INVITATION WERE IN THE AMOUNTS OF $98.90, $104.26, AND $107.25 PER MBM.

IT IS REPORTED THAT IN VIEW OF THE CONSIDERABLE SPREAD BETWEEN THE LOW AND THE NEXT-LOW BID, THE CONTRACTING OFFICER QUESTIONED THE CONTRACTOR'S REPRESENTATIVE IN THE AUCTION ROOM AS TO WHETHER HIS BID WAS CORRECT AND THAT MR. TILFORD VERIFIED THE CORRECTNESS OF THE BID, AFTER WHICH, ITS ACCEPTANCE WAS IMMEDIATELY ANNOUNCED. A NOTATION WAS MADE ON THE BID FORM THAT THE BID HAD BEEN VERIFIED. WRITTEN NOTICE OF AWARD (SAD FORM 1500), SIGNED BY THE CONTRACTING OFFICER, WAS EITHER DELIVERED TO MR. TILFORD DURING THE COURSE OF THE AUCTION OR WAS MAILED TO THE CONTRACTOR WITHIN TWO OR THREE DAYS THEREAFTER. THE SIGNED DEFINITIVE CONTRACT WAS MAILED TO THE CONTRACTOR ON APRIL 26, 1957.

BY LETTER DATED APRIL 26, 1957, THE CONTRACTOR RETURNED THE NOTICE OF AWARD, STATING THAT HIS REPRESENTATIVE EVIDENTLY HAD MADE A $10 ERROR AND THAT THE PRICE SHOULD HAVE BEEN $101.19 PER MBM. THE CONTRACTOR NOTED IN THE LETTER THAT THE LUMBER WAS REQUIRED TO BE GRADE-MARKED BY THE SOUTHERN PINE INSPECTION BUREAU, AND THAT THE MILL THAT WOULD HAVE SHIPPED THE LUMBER AT $101.19 WAS NOT A MEMBER OF THE BUREAU AND THAT, THEREFORE, IT WOULD BE NECESSARY TO SEND A GOVERNMENT INSPECTOR IF THE LUMBER WAS TO BE SHIPPED AT THE REVISED PRICE. THE CONTRACTING OFFICER, BY LETTER DATED APRIL 30, 1957, RETURNED THE NOTICE OF AWARD TO THE CONTRACTOR ADVISING THAT SINCE A BONA FIDE BID HAD BEEN MADE, THE CORRECTNESS OF THE BID VERIFIED, AND THE CONTRACT REDUCED TO WRITING AND MAILED TO HIM, THERE EXISTED A VALID AND BINDING CONTRACT BETWEEN THE COMPANY AND THE GOVERNMENT AND THAT, THEREFORE, THE CONTRACT WOULD HAVE TO BE COMPLETED IN ACCORDANCE WITH ITS TERMS AND CONDITIONS. BY LETTER DATED MAY 6, 1957, THE CONTRACTOR RETURNED THE NOTICE OF AWARD AND THE DEFINITIVE CONTRACT, STATING THAT HIS REPRESENTATIVE EVIDENTLY WAS CONFUSED WHEN MAKING THE BID AS THE CORRECT PRICE SHOULD HAVE BEEN $101.19 AND HE REQUESTED THAT THE CONTRACT BE CANCELED.

IT IS REPORTED THE FACT THAT THE LUMBER IS REQUIRED TO BE GRADE MARKED COULD NOT BE THE SOLE CAUSE OF THE ALLEGED ERROR. ALTHOUGH ONLY THOSE MILLS WHICH ARE MEMBERS OF THE SOUTHERN PINE INSPECTION BUREAU ARE AUTHORIZED TO APPLY THE GRADE-MARK AND SYMBOL, NON-MEMBER MILLS MAY HAVE THEIR STOCK GRADED, GRADE-MARKED AND CERTIFIED BY AN OFFICIAL INSPECTOR OF THE BUREAU FOR A MINIMUM FEE OF $35. IF THE SERVICE REQUIRES MORE THAN ONE DAY OF THE INSPECTOR'S TIME, THE FEE IS $35 PER DAY. IT IS FURTHER REPORTED THAT THE AMOUNT OF LUMBER HERE INVOLVED COULD EASILY HAVE BEEN GRADE-MARKED AND CERTIFIED IN LESS THAN ONE DAY BY THE SOUTHERN PINE INSPECTION BUREAU FOR THE MINIMUM CHARGE OF $35, OR AN AVERAGE OF $2.29 PER MBM FOR THE QUANTITY INVOLVED.

NO DELIVERY HAVING BEEN MADE UNDER THE CONTRACT, THE CONTRACTOR'S RIGHT TO PROCEED WITH PERFORMANCE WAS TERMINATED FOR DEFAULT BY LETTER DATED MAY 17, 1957, AND THE CONTRACTOR WAS ADVISED THAT HE WOULD BE LIABLE FOR AN EXCESS COST AND DAMAGES SUFFERED BY THE GOVERNMENT DUE TO THE DEFAULT. THE CONTRACTOR REPLIED BY LETTER DATED MAY 23, 1957, EXPRESSING HIS WILLINGNESS TO PAY THE EXCESS REPURCHASE COSTS IF SUCH COSTS WERE NOT MORE THAN $4 OR $5 PER MBM. THE LUMBER COVERED BY THE DEFAULTED CONTRACT WAS REPURCHASED ON MAY 28, 1957, AT A PRICE OF $99.99 PER MBM.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENTS OF THE GOVERNMENT. WHILE THE DIFFERENCE BETWEEN THE LOW BID AND THE NEXT-LOW BID APPARENTLY WAS SUFFICIENT TO CAUSE THE CONTRACTING OFFICER TO REQUEST VERIFICATION OF THE BID, SUCH DIFFERENCE WAS NOT SUFFICIENT TO WARRANT THE BELIEF THAT THE BID WAS ERRONEOUS AFTER IT HAD BEEN VERIFIED. THE RECORD OTHERWISE INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. UNDER THESE CIRCUMSTANCES, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS DUE SOLELY TO THE NEGLIGENCE OR OVERSIGHT OF THE BIDDER, OR HIS DULY AUTHORIZED REPRESENTATIVE, AND 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 CONTRACTOR. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN V. UNITED STATES, 56 F.SUPP. 505.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR RESCINDING CONTRACT NO. DA-09-026-ENG-56568 OR FOR RELIEVING THE CONTRACTOR FROM LIABILITY UNDER ITS TERMS AND CONDITIONS.