B-135017, FEB. 12, 1958

B-135017, FEB. 12, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 22, 1958, FROM THE ASSISTANT SECRETARY (LOGISTICS), WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY SWIFT AND COMPANY, BALTIMORE, MARYLAND, TO HAVE BEEN MADE IN ITS BID SUBMITTED ORALLY ON SEPTEMBER 19, 1957, IN RESPONSE TO A NOTICE OF INTENT TO PURCHASE ISSUED BY THE RICHMOND MILITARY SUBSISTENCE MARKET CENTER, RICHMOND, VIRGINIA, FOR FURNISHING 15,000 POUNDS OF CHEDDAR CHEESE TO BE DELIVERED TO THE MARKET CENTER.

THE CLOSING DATE FOR QUOTATIONS WAS SEPTEMBER 19, 1957, AND ON THAT DATE ORAL AWARD--- CONFIRMED BY WRITTEN PURCHASE ORDER NO. RICH 3208 58--- WAS MADE TO SWIFT AND COMPANY ON ITS BID OF $0.3574 PER POUND. THE OTHER BIDS RECEIVED WERE IN THE AMOUNTS OF $0.3823 AND $0.3894 AND $0.4425 PER POUND. BY A LETTER DATED SEPTEMBER 27, 1957, SWIFT AND COMPANY ALLEGED AN ERROR IN ITS BID IN THAT IT HAD FAILED TO INCLUDE FREIGHT CHARGES OF $1.21 PER HUNDREDWEIGHT FROM MARION, INDIANA, TO RICHMOND, VIRGINIA. BY ITS LETTER DATED OCTOBER 8, 1957, IT REQUESTED THAT ITS BID BE INCREASED TO $0.3695 PER POUND, STATING THAT ALTHOUGH A TELEGRAM FROM ITS CHICAGO OFFICE HAD QUOTED A COST OF $0.35 PER POUND F.O.B. MARION, INDIANA, THE BID WAS SUBMITTED WITHOUT ADDING FREIGHT CHARGES FROM MARION, INDIANA, TO RICHMOND, VIRGINIA.

IN 20 COMP. GEN. 652, IT IS STATED:

"THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362.'

IN THE INSTANT MATTER THE QUESTION FOR CONSIDERATION IS NOT WHETHER SWIFT AND COMPANY MADE AN ERROR IN ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ACCEPTANCE OF THE BID. THERE WAS NOTHING IN THE BID TO INDICATE AN ERROR THEREIN AND NO ALLEGATION OF ERROR WAS MADE UNTIL AFTER THE AWARD. THE CONTRACTING OFFICER HAS STATED THAT NO ERROR WAS APPARENT TO HIM PRIOR TO AWARD. THE DIFFERENCE BETWEEN THE PRICE QUOTED BY SWIFT AND COMPANY AND THE PRICES QUOTED BY OTHER BIDDERS APPARENTLY WAS NOT SO GREAT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AND IT DOES NOT APPEAR THAT SUCH DIFFERENCE WAS SO GREAT THAT HE SHOULD HAVE BEEN ON NOTICE OF ERROR. NEITHER WAS THE ERROR INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. THE NOTICE OF INTENT TO PURCHASE CLEARLY REQUESTED DELIVERY TO:

"PROPERTY OFFICER, RICH

MS MARKET CENTER, 1709

KELLY ROAD, RICHMOND, VA.'

ACCORDINGLY, THE ESTABLISHED RULE ABOVE QUOTED IS FOR APPLICATION HERE. THE ACCEPTANCE OF THE SWIFT AND COMPANY BID UNDER THE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE CO. 249 U.S. 313; AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75; 26 COMP. GEN. 415; 29 ID. 323 AND AUTHORITIES CITED IN THOSE DECISIONS.

IT MAY BE NOTED THAT THIS TRANSACTION IS READILY DISTINGUISHABLE FROM THE CLASS OF CASES CONSIDERED IN OUR DECISION TO YOU OF OCTOBER 18, 1957, B- 131228, 37 COMP. GEN. 258, IN THAT THE ,NOTICE OF INTENT TO PURCHASE" APPEARS TO BE DESIGNED TO ELICIT FIRM OFFERS WHICH MAY BE ACCEPTED WITHOUT FURTHER NEGOTIATION. THE "STANDARD CONDITIONS" ATTACHED TO THE NOTICE OF INTENT INCLUDE A SPECIFIC PROVISION THAT ANY OFFER RECEIVED IN RESPONSE MAY BE ACCEPTED BY MAILING OR OTHERWISE COMMUNICATING A NOTICE OF AWARD OR PURCHASE ORDER, AND THE NOTICE ALSO SPECIFIES BY REFERENCE ALL TERMS OF THE CONTRACT TO BE EFFECTED BY AN AWARD.

FOR THE REASONS ABOVE SET OUT NO VALID BASIS APPEARS FOR INCREASING THE CONTRACT PRICE.

ONE SET OF THE PAPERS TRANSMITTED WITH THE LETTER OF JANUARY 22, 1958, IS RETURNED HEREWITH.