B-138622, AUG. 13, 1959

B-138622, AUG. 13, 1959

TO NAVAJO FREIGHT LINES, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 16, 1959, REQUESTING REVIEW OF THE AUDIT ACTION TAKEN ON YOUR BILL NO. 277-4236 FOR TRANSPORTATION CHARGES ON SHIPMENTS MOVING FROM SAVANNA, OKLAHOMA, TO HAWTHORNE, NEVADA, IN MARCH 1956.

YOU BILLED ORIGINALLY AND COLLECTED CHARGES COMPUTED AT A RATE OF $3.43 PER 100 POUNDS, AS PROVIDED IN ITEM 600 ON 1ST REVISED PAGE 78 B, EFFECTIVE NOVEMBER 28, 1955, OF U.S. GOVERNMENT QUOTATION NO. 43-D, ISSUED BY THE ROCKY MOUNTAIN MOTOR TARIFF BUREAU, INC. YOUR SUPPLEMENTAL BILL NO. 277-4236-A WAS PREDICATED UPON A RATE OF $3.93 PER 100 POUNDS, AS PROVIDED IN ITEM 600 ON 4TH REVISED PAGE 78-B OF THE SAID QUOTATION, ISSUED APRIL 20, 1956, AND STATED THEREON TO BE EFFECTIVE NOVEMBER 28, 1955. THE LATTER BILL WAS PAID ON VOUCHER NO. 522005, JUNE 1956 ACCOUNT OF M. C. DODSON. THIS RETROACTIVE QUOTATION AMENDMENT, MADE "TO CORRECT PUBLICATION ERROR," APPARENTLY WAS INTENDED TO APPLY A $3.93 RATE FOR THE PERIOD FROM NOVEMBER 28, 1955, TO MARCH 19, 1956, WHILE THE 1ST AND 2ND REVISED PAGES 78-B WERE IN EFFECT. IN THE SUBSEQUENT AUDIT OF THE PAYMENTS MADE INCIDENT TO YOUR BILLS NOS. 277-4236 AND 277-4236-A, WE DETERMINED THAT YOU WERE ENTITLED TO THE RATE OF $3.43 PER 100 POUNDS, AUTHORIZED IN ITEM 600 ON 2ND REVISED PAGE 78-B OF THE QUOTATION IN QUESTION, ISSUED DECEMBER 27, 1955, AND EFFECTIVE THE SAME DAY, AND WE ISSUED A NOTICE OF OVERPAYMENT, FORM NO. 1003, IN THE AMOUNT OF $909.40 COMPUTED ON THAT BASIS.

ROCKY MOUNTAIN MOTOR TARIFF BUREAU, INC., U.S. GOVERNMENT QUOTATION NO. 43-D, WHICH WAS VOLUNTARILY PROMULGATED PURSUANT TO SECTION 22 OF THE INTERSTATE COMMERCE ACT, 49 U.S.C.A. 22, CONSISTS OF A SERIES OF CONTINUING UNILATERAL OFFERS BY ITS PARTICIPANTS TO TRANSPORT FREIGHT FOR THE UNITED STATES, ON AND AFTER SPECIFIED DATES, AT RATES AND CHARGES NAMED THEREIN. ITEM 600 ON 2ND REVISED PAGE 78-B, OFFERED, ON AND AFTER DECEMBER 27, 1955, A RATE OF $3.43 PER 100 POUNDS, SUBJECT TO 30,000 POUNDS VOLUME MINIMUM WEIGHTS, FOR THE CARRIAGE OF AMMUNITION AND/OR EXPLOSIVES AND/OR FIREWORKS, BETWEEN THE NAVAL AMMUNITION DEPOT, MCALESTER (SAVANNA, HAYWOOD), OKLAHOMA, AND THE NAVAL AMMUNITION DEPOT, HAWTHORNE, NEVADA. THE GOVERNMENT'S TENDER AT MCALESTER (SAVANNA), OKLAHOMA, ON MARCH 13, 14 AND 16, 1956, OF SIX SHIPMENTS OF AMMUNITION FOR CANNON WITH EXPLOSIVE PROJECTILES--- WEIGHING IN EXCESS OF 30,000 POUNDS EACH--- FOR TRANSPORTATION TO HAWTHORNE, NEVADA, OPERATED AS ACCEPTANCE OF THIS OFFER. THE CARRIER'S UNDERTAKING, PURSUANT TO THE TERMS OF THE BILL OF LADING CONTRACT, WAS FULLY EXECUTED WHEN THE SHIPMENTS WERE DELIVERED AT HAWTHORNE ON MARCH 19, 20 AND 27, 1956, AT WHICH TIME YOU WERE ENTITLED TO, CLAIMED, AND DID COLLECT, CHARGES IN ACCORDANCE WITH THE OFFER HELD OUT IN ITEM 600 ON 2ND REVISED PAGE 78-B, EFFECTIVE DECEMBER 27, 1955.

IT IS A FUNDAMENTAL PRINCIPLE OF CONTRACT LAW THAT WHEN 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. SEE ELLICOTT MACHINE COMPANY V. UNITED STATES, 44 C.CLS. 127; AMERICAN WATER SOFTENER COMPANY V. UNITED STATES, 50 ID. 209; UNITED STATES V. CONTI; 119 F.2D 652; 6 COMP. GEN. 526; 8 ID. 362; 15 ID. 1049; 18 ID. 942; 20 ID. 652; 23 ID. 596, 598. IT IS EQUALLY WELL ESTABLISHED THAT MUTUAL MISTAKE--- NOT UNILATERAL--- AFFORDS THE ONLY LEGAL JUSTIFICATION FOR THE MODIFICATION OR REVISION OF AN OTHERWISE VALID CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; SELIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; 29 COMP. GEN. 323, 324. NO EVIDENCE OF MUTUAL MISTAKE HAS BEEN PRESENTED IN THIS INSTANCE.

WHILE THERE MAY HAVE BEEN CIRCUMSTANCES WHICH YOU DEEM SUFFICIENT TO JUSTIFY THE RETROACTIVE EFFECTIVE DATE, WE MUST NEVERTHELESS ADHERE TO THE RULE THAT GOVERNMENT OFFICERS HAVE NO AUTHORITY TO CHANGE OR MODIFY EXISTING GOVERNMENT CONTRACTS SO AS TO INCREASE THE GOVERNMENT'S LIABILITY WITHOUT A CORRESPONDING INCREASED BENEFIT TO THE UNITED STATES. SEE VULCANITE CEMENT CO. V. UNITED STATES, 74 C.CLS. 692, 705; J. J. PRESIS AND CO. V. UNITED STATES, 58 ID. 81; YALE AND TOWNE MFG. CO. V. UNITED STATES, 67 ID. 618. THIS BEING TRUE, WE CANNOT AUTHORIZE GIVING EFFECT TO THE INCREASED RATE IN ITEM 600 ON 4TH REVISED PAGE 78-B PRIOR TO APRIL 20, 1956, THE DATE OF ISSUE.

ACCORDINGLY, THE CHARGES COLLECTED ON YOUR SUPPLEMENTAL BILL NO. 277 4236 -A REPRESENT AN ERRONEOUS PAYMENT IN THAT THEY EXCEED CHARGES ON THE SHIPMENTS INVOLVED COMPUTED ON THE BASIS OF THE RATE OF $3.43 PER 100 POUNDS FOUND TO BE APPLICABLE UNDER THE SAID ITEM 600 ON 2ND REVISED PAGE 78-B. THE OVERPAYMENT OF $909.40 ON THIS BILL SHOULD BE REFUNDED PROMPTLY.