B-152992, APR. 2, 1964

B-152992, APR. 2, 1964

TO THE SECRETARY OF THE ARMY:

WE ARE IN RECEIPT OF A LETTER FROM THE OFFICE OF ENGINEERS DATED AUGUST 28, 1963, SIGNED BY COLONEL W. M. GLASGOW, JR., REQUESTING OUR ADVICE ON THE DISPOSITION TO BE MADE OF THE CLAIM OF THE INGERSOLL RAND COMPANY. THE LETTER IT IS RECOMMENDED THAT CONTRACT NO. DA-23 065-ENG-10574 (PURCHASE ORDER NO. 34-24369) WITH THE CORPS OF ENGINEERS BE REFORMED TO INCREASE THE PRICE IN AN AMOUNT NOT TO EXCEED THE AMOUNT OF THE NEXT LOWEST QUOTATION.

ON APRIL 14, 1961, THE COMPANY WAS INVITED BY THE UNITED STATES ARMY ENGINEER DISTRICT OF SAINT LOUIS, MISSOURI, TO SUBMIT A QUOTATION UPON THE SUPPLY OF, INTER ALIA, THE FOLLOWING ITEM:

"2. PICK, PAVING BREAKER, STEEL, 2-3/4 INCHES LONG BY 7/8 INCH WIDE HEXAGON SHANK, 8 INCHES LONG BY 3-1/8 INCHES WIDE BLADE, INGERSOLL RAND OR EQUAL. (FSN 3820-290-4269)

(A) F.O.B. SCHENECTADY GENERAL DEPOT * * * NEW YORK, 200 EACH

(B) F.O.B. SHARPE GENERAL DEPOT * * * CALIFORNIA, 50 EACH"

CLAIMANT'S QUOTATION WAS $2.86 EACH ON BOTH ITEMS 2 (A) AND 2 (B). BECAUSE THE OTHER QUOTATIONS RECEIVED WERE CONSIDERABLY HIGHER (THE NEXT LOW BID WAS $6.87 ON ITEM 2A AND $7.13 ON ITEM 2B), ON OR ABOUT MAY 2, 1961, CLAIMANT WAS REQUESTED BY TELEPHONE TO CONFIRM THE PRICE. ALTHOUGH COGNIZANT PROCUREMENT PERSONNEL DO NOT REMEMBER WHETHER THE COMPANY WAS INFORMED AT THAT TIME THAT ITS QUOTATION ON ITEM 2 WAS ONLY APPROXIMATELY 40 PERCENT AS LARGE AS THE NEXT LOWEST QUOTATION, WE ARE ASSURED BY THE CONTRACTING OFFICER THAT IT WAS A POLICY OF THE DISTRICT TO ADVISE THE SUPPLIER IF HIS QUOTATION WAS OUT OF LINE UPON REQUESTING VERIFICATION OF THE QUOTATION. AS THE CONTRACTING OFFICER NOW STATES:

"SINCE I AWARDED THE CONTRACT, I OF COURSE WAS SATISFIED THAT THE OFFICE POLICY CONCERNING THIS MATTER HAD BEEN ADHERED TO.'

THE CONTRACTOR IN HIS LETTER OF MAY 2, 1961, IN RESPONSE TO THE TELEPHONED REQUEST, SPECIFICALLY CONFIRMED THE OFFERED PRICES FOR ITEMS 2 AND 3. THEREUPON, THE AFOREMENTIONED PURCHASE ORDER DATED MAY 5, 1961, WAS ISSUED TO CLAIMANT, CONTAINING THE SAME DESCRIPTION AS THE REQUEST FOR QUOTATIONS.

AFTER RECEIPT OF THE PURCHASE ORDER CONTRACTOR SHIPPED THE REQUIRED QUANTITY OF THEIR MODEL NO. 1PBA5-14 3-INCH CHISEL BITS. THESE WERE RETURNED TO THE CONTRACTOR WITH THE ADVICE THAT THEY DID NOT MEET THE SPECIFICATIONS. THE CONTRACT WAS MODIFIED WITHOUT CHANGE IN PRICE BY CHANGE ORDER NUMBER 1, DATED NOVEMBER 22, 1961, TO DELETE THE NOMENCLATURE OF THE ITEM AND TO SUBSTITUTE THEREFOR THE FOLLOWING:

"PICK, PAVING BREAKER, STEEL, 2-3/4 INCHES LONG BY 7/8 INCH WIDE HEXAGON SHANK, 8 INCHES LONG BY 3 INCHES WIDE BLADE, 19 INCH NOMINAL LENGTH UNDER COLLAR, INGERSOLL-RAND NO. 1PBA11-19. (FSN 3820-290 4269)"

SUBSEQUENTLY, AND PRESUMABLY AFTER RECEIPT OF THE MODIFICATION, CONTRACTOR FURNISHED THE REQUIRED QUANTITY OF THEIR MODEL NO. 1PBA11-19 3- INCH FLAT PICK IN SHIPMENTS RECEIVED AND ACCEPTED ON DECEMBER 27, 1961, MARCH 14, 1962 AND MARCH 19, 1962. FINAL PAYMENT UNDER THE CONTRACT WAS EFFECTED ON MARCH 22, 1962.

BY LETTER DATED MARCH 4, 1963, NEARLY ONE YEAR AFTER FINAL PAYMENT, THE CONTRACTOR FOR THE FIRST TIME ALLEGED A MISTAKE IN THAT ITS QUOTE HAD BEEN PREDICATED UPON FURNISHING THE WRONG ITEM AND REQUESTED THE ADJUSTMENT WHICH IS THE SUBJECT OF THIS CLAIM. CONTRACTOR ADMITS THE ERROR WAS DUE SOLELY TO THE NEGLIGENCE OF ITS OWN EMPLOYEES, BUT SUBMITS ITS CURRENT COMMERCIAL PRICE LISTS TO SHOW THAT WHEREAS THE INVITATION HAD REQUIRED THE EQUIVALENT OF ITS MODEL 3-INCH FLAT PICK HAVING A LIST PRICE (ADJUSTED FOR GOVERNMENT DISCOUNT) OF $9 EACH, THE COMPANY HAD COMPUTED ITS BID ON THE BASIS OF FURNISHING ITS LESS EXPENSIVE MODEL 3-INCH CHISEL BIT.

WE THINK THAT THE CONTRACTOR HAS ADEQUATELY DEMONSTRATED THE MAKING OF A BONA FIDE MISTAKE IN THE FORMULATION OF ITS QUOTATION. NONETHELESS WE ARE CONSTRAINED TO DENY THE CLAIM. THE REQUEST FOR QUOTATIONS IN THIS CASE CLEARLY AND UNAMBIGUOUSLY INVITED OFFERS FOR THE FURNISHING OF AN ITEM EQUIVALENT TO THE 3-INCH FLAT PICK AND SHOULD NOT HAVE MISLED THE BIDDER INTO THINKING THAT THE 3-INCH CHISEL BITS WOULD BE ACCEPTABLE. THE FEDERAL STOCK NUMBER RECITED THEREIN, WHICH WAS REPEATED UNCHANGED IN THE SUBSEQUENT CHANGE ORDER, DESIGNATED AN ITEM EQUIVALENT TO THE PICK TO THE EXCLUSION OF ALL OTHER POSSIBLE ITEMS.

FURTHER, AS ALREADY INDICATED, THE CLAIMANT RAISED NO ALLEGATION OF ERROR UNTIL WELL AFTER COMPLETION OF THE CONTRACT EVEN THOUGH THE ORIGINAL ITEMS SHIPPED WERE RETURNED, THE SPECIFICATION WAS AMENDED TO CLARIFY THE ITEM TO BE FURNISHED WITHOUT CHANGE IN THE CONTRACT PRICE, AND THE ITEMS ACTUALLY REQUIRED BY THE SPECIFICATIONS HAD LONG SINCE BEEN SHIPPED, ACCEPTED, AND PAID FOR AT THE CONTRACT PRICE. A CONTRACTOR WHO PROCEEDS WITH PERFORMANCE AFTER HE HAS OBTAINED KNOWLEDGE OF HIS ERROR WITHOUT MAKING SEASONABLE CLAIM FOR ADJUSTMENT WILL BE HELD TO HAVE AFFIRMED THE TERMS OF THE ORIGINAL CONTRACT. SEE 39 COMP. GEN. 27; 38 COMP. GEN. 218; 36 COMP. GEN. 191. AS THE COURT SAID IN BOARD OF TRUSTEES OF NATIONAL TRAINING SCHOOL FOR BOYS V. O. D. WILSON COMPANY, INCORPORATED, 133 F.2D 399, AT PAGE 400, CONTRACTOR MAY NOT "CONTRACT, PERFORM, COLLECT THE FULL CONTRACT PRICE, AND THEN REPUDIATE THE CONTRACT AND RECOVER AS IF THERE HAD BEEN NONE.' FURTHERMORE, WE THINK THE CLAIM FOR ADJUSTMENT IS PROPERLY BARRED BY THE DOCTRINE OF LACHES.

FOR THE ABOVE-STATED REASONS IT MUST BE CONCLUDED THAT THERE IS NO BASIS IN LAW FOR MAKING THE UPWARD PRICE ADJUSTMENT REQUESTED BY THE INGERSOLL- RAND COMPANY AND THAT PERMISSION TO TENDER A FURTHER INVOICE MUST BE DENIED THE CONTRACTOR.