B-135837, APR. 23, 1958

B-135837, APR. 23, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER OF APRIL 11, 1958, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR ALLEGED BY STERN AND SHAINFINE, PHILADELPHIA, PENNSYLVANIA, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. N171-15486A IS BASED.

BY INVITATION NO. B-43-58-171, THE NAVAL GUN FACTORY, WASHINGTON, D.C., REQUESTED BIDS, TO BE OPENED MARCH 20, 1958, FOR THE PURCHASE FROM THE GOVERNMENT OF ANY OR ALL OF 88 ITEMS OF SALVAGED MATERIALS WHICH WERE SEPARATELY ENUMERATED AND DESCRIBED THEREIN. IN RESPONSE TO THE INVITATION, STERN AND SHAINFINE SUBMITTED A BID IN WHICH IT QUOTED A PRICE OF $153.69 FOR ITEM NO. 87, DESCRIBED AS "CORK, FOR INSULATING AND REFRIGERATION PURPOSES, APPROXIMATELY AS FOLLOWS: 3,900 LBS. BLOCK FORM, 2 INCHES BY 12 INCHES BY 30 INCHES (AND) 18,700-LBS. BROKEN PIECES, MISC. SIZES.' THE CONCERN ALSO QUOTED A PRICE OF $159.69 FOR ITEM NO. 66.

BY LETTER OF MARCH 26, 1958, THE NAVAL GUN FACTORY ADVISED STERN AND SHAINFINE THAT ITS BID ON ITEM 87 WAS THEREBY ACCEPTED. THE LETTER REQUESTED PAYMENT OF THE SUM OF $93.69, REPRESENTING THE DIFFERENCE BETWEEN THE PURCHASE PRICE AND THE AMOUNT OF $60, WHICH HAD BEEN SUBMITTED AS A BID DEPOSIT. HOWEVER, ON MARCH 27, 1958, AND PRIOR TO ITS RECEIPT OF THE AGENCY'S LETTER, STERN AND SHAINFINE, HAVING LEARNED OF THE AWARD THROUGH ANOTHER BIDDER, ADVISED THE AGENCY BY TELEPHONE AND LETTER THAT AN ERROR HAD BEEN MADE IN ITS BID. ASSERTING THAT IT HAD NOT INTENDED TO QUOTE A PRICE FOR ITEM 87 AND THAT THE PRICE ERRONEOUSLY ENTERED OPPOSITE THAT ITEM WAS INTENDED AS ITS BID PRICE FOR ITEM 88, THE CONCERN REQUESTED THAT THE AWARD BE CANCELED AND ITS BID DEPOSIT RETURNED, SINCE IT HAD NOT RECEIVED THE AWARD FOR ITEM 66. SUBMITTED WITH THE LETTER WAS STERN AND SHAINFINE'S FILE COPY OF ITS BID, WHICH SETS FORTH A PRICE OF $153.69 ON THE LINE DESIGNATED THEREFOR OPPOSITE ITEM 88, BUT QUOTES NO PRICE WITH RESPECT TO ITEM 87.

THE BID SUBMITTED BY STERN AND SHAINFINE DID NOT SPECIFY THE MANNER IN WHICH THE GOVERNMENT WAS TO COMMUNICATE ITS ACCEPTANCE AND, THEREFORE, IN ACCORDANCE WITH THE WELL-ESTABLISHED COMMON-LAW PRINCIPLE, THE MAILING OF THE GOVERNMENT'S NOTICE OF ACCEPTANCE ON MARCH 26, 1958, COMPLETED THE CONTRACT. HENCE, STERN AND SHAINFINE'S ATTEMPTED REVOCATION BY TELEPHONE AND LETTER ON THE NEXT DAY HAS NO BEARING IN DETERMINING THE RIGHTS OF THE PARTIES. UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683.

THERE WAS NOTHING ON THE FACE OF THE BID IN THE PRESENT INSTANCE TO INDICATE THAT IT WAS NOT AS INTENDED. THE ABSTRACT OF BIDS SHOWS THAT, IN ADDITION TO THE BID OF STERN AND SHAINFINE, TWO OTHER BIDS FOR ITEM 87 WERE RECEIVED IN RESPONSE TO THE INVITATION IN THE AMOUNTS OF $11.13 AND $47.50. HOWEVER, IT APPEARS THAT THE ACQUISITION COSTS OF THE ITEM, INASMUCH AS IT WAS SALVAGED MATERIAL, WAS NOT KNOWN TO THE SELLING AGENCY, AND A MERE DIFFERENCE IN THE PRICES BID FOR SUCH MATERIAL WOULD NOT BE CALCULATED TO PLACE THE CONTRACTING OFFICER ON NOTICE OF ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT TO BE FURNISHED TO THE GOVERNMENT. 28 COMP. GEN. 550. THUS, THE BID PRICES SUBMITTED FOR ITEM 88 HAD A STILL WIDER RANGE, FROM $10.97 TO $1,131.52. THEREFORE, IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER WAS ON NOTICE, ACTUAL OR CONSTRUCTIVE, OF THE ALLEGED ERROR PRIOR TO THE AWARD.

UNDER THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID OF STERN AND SHAINFINE CONSUMMATED A VALID AND BINDING CONTRACT CONFERRING RIGHTS AND OBLIGATIONS UPON THE CONTRACTING PARTIES WHICH NEITHER THIS OFFICE NOR ANY OFFICER OF THE GOVERNMENT IS AUTHORIZED TO VARY TO THE DETRIMENT OF THE UNITED STATES. MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. IF STERN AND SHAINFINE DID NOT INTEND TO QUOTE A PRICE FOR ITEM 87, THE ERROR WAS DUE SOLELY TO NEGLIGENCE OR OVERSIGHT ON ITS PART AND WAS NOT INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT, THAT IS, THE ERROR WAS UNILATERAL- - NOT MUTUAL--- AND DOES NOT ENTITLE THE CONCERN TO RELIEF. SEE UNITED STATES V. SABIN METAL CORP., SUPRA, AND THE AUTHORITIES REVIEWED THEREIN.

ACCORDINGLY, YOU ARE ADVISED THAT NO LEGAL BASIS EXISTS FOR RELEASING STERN AND SHAINFINE FROM THE TERMS OF THE CONTRACT INVOLVED.