B-146524, AUG. 29, 1961

B-146524, AUG. 29, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.4) DATED JULY 26, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING THE MATTER OF A MISTAKE IN BID ALLEGED BY ELECTRO -MECHANICAL CO., PORTLAND, OREGON, AFTER AWARD OF SALES CONTRACT NO. N63118S-53328 (ITEM NO. 1 OF SALES INVITATION NO. B-163-61 63118).

BY THE INVITATION CONSOLIDATED SURPLUS SALES OFFICE, U.S. NAVAL SUPPLY DEPOT, CLEAR FIELD, OGDEN, UTAH, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF A NUMBER OF ITEMS OF SURPLUS PROPERTY AS LISTED AND DESCRIBED IN DETAIL UNDER EACH ITEM, BEGINNING ON PAGE 9. BID QUOTATIONS WERE REQUIRED TO BE ENTERED ON THE BID FORM, BEGINNING ON PAGE 3, OPPOSITE THE RESPECTIVE NUMBERED ITEMS BID ON. ON THIS FORM APPEARED ONLY A GENERAL DESCRIPTION OF THE MATERIAL OFFERED FOR SALE UNDER EACH ITEM. ALSO, PAGE 2 OF THE BID INVITATION WAS TO BE COMPLETED BY THE BIDDER, WITH THE TOTAL AMOUNT BID ENTERED THEREON AS WELL AS THE AMOUNT OF BID DEPOSIT (NOT LESS THAN 20 PERCENT OF THE TOTAL BID PRICE) TRANSMITTED WITH THE BID.

IN RESPONSE TO THE INVITATION CLAIMANT SUBMITTED A BID WITH PRICE QUOTATIONS ENTERED ON THREE OF THE ADVERTISED ITEMS, INCLUDING A PRICE OF "$111.00" EACH AND A TOTAL OF "$111.00" FOR TWO OF THE TEN UNITS ADVERTISED AND DESCRIBED UNDER ITEM NO. 1, A TOTAL BID OF $70 ON ITEM NO. 14 AND OF $160 ON ITEM NO. 15. NO BID PRICE APPEARED OPPOSITE ITEM NO. 2. ON THE FACE OF THE COMPANY'S BID THE TOTAL BID PRICE WAS SHOWN AS "$341.00," AND IT WAS INDICATED THAT A BID DEPOSIT OF $118.60 WAS BEING FORWARDED WITH THE BID.

THE RECORD SHOWS THAT WHEN BIDS WERE BEING EVALUATED IT WAS NOTED THAT ELECTRO-MECHANICAL CO. HAD BID ON ITEM NO. 1 FOR A QUANTITY OF TWO UNITS AT $111 EACH, WHILE THE EXTENDED AMOUNT IN THE TOTAL COLUMN OF ITS BID FOR THAT ITEM WAS ALSO $111. THE BIDDER WAS PROMPTLY CONTACTED ON JUNE 12, 1961, BY TWX AND REQUESTED TO RESTATE ITS BID "PER EACH ITEM 1 COVERING TWO MOTOR GENERATORS.' THE COMPANY REPLIED BY TELEGRAM DATED JUNE 13, 1961,"RETEL BID B163-61-63118 TOTAL ITEM ONE SHOULD BE 222.00 TOTAL BID 452.00.'

THE CONTRACTING OFFICER IN HER REPORT CONCERNING THE SALE TRANSACTION STATES THAT AFTER DETERMINING THE COMPANY'S CONFIRMED UNIT BID PRICE AND THE CORRECTED TOTAL FOR TWO UNITS IN ITEM NO. 1 WERE "AUTHENTIC AND EQUITABLE" AND HAVING NO FURTHER REASON TO QUESTION THE CORRECTNESS THEREOF, THE BID OF ELECTRO-MECHANICAL CO., AS HIGH BIDDER FOR TWO OF THE MOTOR GENERATORS COVERED BY ITEM NO. 1, WAS ACCEPTED AND AWARD OF THE TWO UNITS WAS EFFECTED ON CONTRACT NO. H63118S-53328 UNDER DATE OF JUNE 15, 1961, AT ITS CONFIRMED BID PRICE OF $111 EACH AND A TOTAL OF $222. THE PURCHASER WAS NOTIFIED OF THE AWARD WITH ADVICE THAT A BALANCE OF $103.40 OF THE PURCHASE PRICE WAS DUE AND SHOULD BE PAID PRIOR TO 3 P.M., JUNE 23, 1961. THIS AMOUNT HAS BEEN PAID BY THE PURCHASER.

ON JUNE 21, 1961, MR. TROUT, OWNER OF ELECTRO-MECHANICAL CO., TELEPHONED THE CONTRACTING OFFICER OF THE DISPOSAL DEPOT AND INFORMED HIM THAT A MISTAKE HAD BEEN MADE IN HIS COMPANY'S BID, STATING THAT ITS BID ON ITEM NO. 1 WAS IN ERROR AS IT HAD INTENDED TO PLACE A BID ON ITEM NO. 2 AND NOT ON ITEM NO. 1. BY LETTER OF JUNE 22, 1961, TO THE CONTRACTING OFFICER THE COMPANY'S OFFICE MANAGER, WHO PREPARED AND SIGNED THE BID ON WHICH THE SALE WAS BASED, CONFIRMED THE ALLEGATION OF ERROR AND EXPLAINED THAT THE ERROR WAS MADE IN PREPARING THE BID IN THAT SHE INADVERTENTLY ENTERED A PRICE QUOTATION OPPOSITE ITEM NO. 1 INSTEAD OF OPPOSITE ITEM NO. 2 AS INTENDED. SHE CONTENDED THAT THE ERROR RESULTED PARTLY FROM THE FACT THAT BOTH ITEMS NOS. 1 AND 2 WERE "MOTOR-GENERATORS; " ALSO, BECAUSE THERE WAS A CONFUSION AS TO THE CORRECT BID INVITATION NUMBER, AS WILL BE NOTED ON PAGE 9 OF THE INVITATION ON WHICH ITEMS NOS. 1 AND 2 WERE LISTED AND DESCRIBED THE NUMBER APPEARING AS "B-162" WHEREAS ON PAGE 3 AND OTHER PAGES IT IS SHOWN AS 163.' BECAUSE OF THE ERROR, AS ALLEGED, SHE REQUESTED THAT THE BID BE REVOKED AND THE FULL PURCHASE PRICE PAID FOR THE MATERIAL COVERED BY ITEM NO. 1 BE RETURNED TO ELECTRO-MECHANICAL CO.

THE ESTABLISHED RULE IS THAT, WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED AND AWARD OF A CONTRACT MADE, THE BIDDER MUST BEAR THE CONSEQUENCES OF THE ERROR UNLESS THE MISTAKE WAS MUTUAL OR THE OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. 39 COMP. GEN. 36.

IN THE INSTANT CASE, WHILE IT IS TRUE THAT THERE WAS A CONFLICT AS TO THE INVITATION BID NUMBER APPEARING ON PAGE 9 AND PAGE 3 AND OTHER PAGES OF THE INVITATION, IT IS NOT APPARENT HOW THIS FACT COULD HAVE IN ANY WAY CONTRIBUTED TO THE ERROR, AS ALLEGED, PARTICULARLY SINCE ITEM NO. 1 AND ITEM NO. 2, HERE INVOLVED, WERE LISTED CONSECUTIVELY ON BOTH PAGES NOS. 3 AND 9. FURTHERMORE, ON BOTH PAGES ITEM NO. 1 WAS LISTED AS "MOTOR AND GENERATOR" WHILE ITEM NO. 2 WAS DESCRIBED AS ,MOTOR GENERATOR AND CONTROL PANEL.' THUS, WHILE IT MAY BE THAT ELECTRO MECHANICAL CO. MAY HAVE MADE AN ERROR IN ITS BID, AS ALLEGED, IT IS CLEAR FROM THE RECORD THAT THE ERROR WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO THE NEGLIGENCE OF THE BIDDER IN THE PREPARATION OF ITS BID. CONSEQUENTLY, SUCH ERROR WAS UNILATERAL--- NOT MUTUAL--- AND WOULD AFFORD NO BASIS FOR RELIEF UNLESS THE CONTRACTING OFFICER IS CHARGEABLE WITH NOTICE--- EITHER ACTUAL OR CONSTRUCTIVE--- OF SUCH ERROR AT THE TIME OF HER ACCEPTANCE OF THE BID. OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F. 505, 507.

WHILE AT THE TIME THE BIDS IN THIS CASE WERE OPENED THERE WAS SOME DOUBT ON THE PART OF THE CONTRACTING OFFICER AS TO THE CORRECTNESS OF THE BID PRICE OF ELECTRO-MECHANICAL CO. ON ITEM NO. 1, THERE WAS NOTHING ON THE FACE OF ITS BID TO INDICATE THAT THE BID ON ITEM NO. 1 MAY HAVE BEEN INTENDED FOR ITEM NO. 2. BECAUSE OF AN APPARENT ERROR IN THE BID ON ITEM NO. 1, HOWEVER, THE BIDDER WAS REQUESTED TO VERIFY AND CONFIRM THE CORRECTNESS OF ITS BID PRICE ON ITEM NO. 1, AND UPON RECEIPT OF THE COMPANY'S CONFIRMATION OF THE BID WITH A CORRECTION IN THE TOTAL AMOUNT OF THE BID PRICE ON ITEM NO. 1 THE CONTRACTING OFFICER ACCEPTED THE BID AND AWARDED THE ITEM TO IT. UNDER THE CIRCUMSTANCES, THE CONTRACTING OFFICER HAD NO CHOICE BUT TO AWARD THE CONTRACT TO ELECTRO-MECHANICAL CO. AS THE HIGHEST BIDDER. SHRIMPTON MFG. COMPANY V. 125 S.W. 942; ALABAMA SHIRT AND TROUSER CO. V. UNITED STATES, 121 CT.CL. 313; AND 37 COMP. GEN. 786.

SINCE THE RECORD FULLY ESTABLISHES THAT THE ACCEPTANCE OF THE BID OF ELECTRO-MECHANICAL CO. WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER ANY SUCH CONTRACTUAL RIGHTS WITHOUT ADEQUATE CONSIDERATION. UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED, 280 U.S. 574; AND PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 CT.CL. 327, 335.

IN VIEW OF THE FOREGOING, THERE IS NO LEGAL BASIS FOR CANCELING CONTRACT NO. N63118S-53328 OR FOR GRANTING ANY RELIEF THEREUNDER.