B-153480, MAR. 6, 1964

B-153480, MAR. 6, 1964

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 10, 1964, WITH ENCLOSURES, FROM THE ACTING ADMINISTRATOR, REQUESTING A DECISION AS TO THE EXTENT OF LIABILITY OF A DEFAULTING CONTRACTOR UNDER THE CIRCUMSTANCES SET FORTH BELOW.

THE FEDERAL SUPPLY SERVICE, SAN FRANCISCO, CALIFORNIA, BY INVITATION NO. SFT-70068-63 REQUESTED BIDS FOR FURNISHING ESTIMATED QUANTITIES OF LIQUID AND PASTE WAXES, TO BE DELIVERED AS ORDERED BY THE STORES DEPOTS AT SAN FRANCISCO, OAKLAND AND BELL, CALIFORNIA, DURING THE PERIOD FROM DATE OF AWARD TO MAY 1, 1964. IN RESPONSE TO THE INVITATION THE JONES WAX COMPANY SUBMITTED A BID DATED MAY 2, 1963, OFFERING TO DELIVER TO THE THREE DESTINATIONS MENTIONED IN THE INVITATION VARIOUS TYPES OF WAXES AT THE PRICES SET FORTH OPPOSITE EACH OF ITEMS 1 THROUGH 21. THE ABSTRACT OF BIDS SHOWS THAT ON THE BASIS OF THE UNIT PRICES QUOTED BY ALL BIDDERS FOR ITEMS 1 THROUGH 18, THE JONES WAX COMPANY'S TOTAL AGGREGATE BID PRICE FOR THESE ITEMS IS $9,146.13 AND THAT THE 10 OTHER RESPONSIVE BIDDERS THEREON QUOTED TOTAL AGGREGATE PRICES RANGING FROM $11,911.50 TO $51,627.75. THE ABSTRACT ALSO SHOWS THAT ON ITEMS 19, 20 AND 21 THE JONES WAX COMPANY QUOTED UNIT PRICES OF $0.24, $0.25 AND $0.255, RESPECTIVELY, AND THAT THE 11 OTHER RESPONSIVE BIDDERS ON THESE ITEMS QUOTED UNIT PRICES RANGING FROM $0.368 TO $0.944.

UPON BEING REQUESTED BY TELEGRAM TO CONFIRM ITS BID PRICES, THE JONES WAX COMPANY ADVISED BY TELEGRAM DATED MAY 22, 1963, THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT IN COMPUTING ITS BID PRICES IT FAILED TO INCLUDE THEREIN AN AMOUNT TO COVER THE ITEMS OF PROFIT AND FREIGHT. THE COMPANY REQUESTED THAT THE APPLICABLE BID PRICES BE INCREASED $0.05 PER GALLON AND $0.05 PER POUND AND THAT THE GOVERNMENT PAY TRANSPORTATION COSTS TO THE DESTINATIONS. BY LETTER DATED MAY 23, 1963, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT IT SHOULD SUBMIT A STATEMENT EXPLAINING THE ERROR IN ITS BID AND ALSO COPIES OF ITS ORIGINAL AND REVISED ESTIMATE SHEETS.

IN A LETTER DATED JUNE 3, 1963, THE PRESIDENT OF THE COMPANY STATED THAT DUE TO HIS ILLNESS HE DID NOT CHECK THE COMPANY'S BID COMPLETELY WHICH, HE STATED, HAD BEEN PREPARED BY HIS SON. THE PRESIDENT OF THE COMPANY REQUESTED THAT THE COMPANY BE RELIEVED FROM THE OBLIGATION OF DELIVERING THE WAXES REQUIRED UNDER THE CONTRACT OR, IN THE ALTERNATIVE, THAT THE GOVERNMENT PAY THE COST OF FREIGHT FROM NEW YORK TO CALIFORNIA. BY LETTER DATED JUNE 7, 1963, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT ITS ESTIMATE SHEETS AND A STATEMENT EXPLAINING THE ERROR SHOULD BE SUBMITTED TO HIS OFFICE NO LATER THAN JUNE 20, 1963. IN A LETTER DATED JUNE 24, 1963, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT SINCE HE HAD NOT RECEIVED A REPLY TO HIS LETTER OF JUNE 7, 1963, HE WAS PROCEEDING WITH THE AWARD OF THE CONTRACT TO THE COMPANY.

BY LETTER DATED OCTOBER 8, 1963, THE COMPANY SUBMITTED ITS SUPPLIER'S PRICE LIST WHICH SHOWS AN F.O.B. ORIGIN PRICE OF $0.75 PER GALLON FOR LIQUID WAX AND AN F.O.B. ORIGIN PRICE OF $0.19 FOR A 4 POUND CAN OF PASTE WAX. IN THAT CONNECTION, IT IS NOTED FROM THE COMPANY'S BID THAT IT QUOTED A PRICE OF $0.795 PER 1-GALLON CAN, F.O.B. BELL, CALIFORNIA, FOR THE REQUIRED LIQUID WAX, AND A PRICE OF $0.21 PER 4-POUND CAN, F.O.B. SOUTH SAN FRANCISCO, CALIFORNIA, FOR THE REQUIRED PASTE WAX.

ALTHOUGH THE COMPANY FURNISHED NO EVIDENCE IN SUPPORT OF ITS ALLEGATION OF ERROR PRIOR TO AWARD, THE DISPARITY BETWEEN ITS BID AND THE OTHER BIDS SUFFICIENTLY WARRANTS THE CONCLUSION THAT SUCH A BONA FIDE MISTAKE WAS MADE BY THE COMPANY AS TO AUTHORIZE THE WITHDRAWAL OF ITS BID. IN 36 COMP. GEN. 441, 444, WE STATED:

"* * * IN UNDERTAKING TO BIND A BIDDER BY ACCEPTANCE OF A BID AFTER NOTICE OF A CLAIM OF ERROR BY THE BIDDER, THE GOVERNMENT VIRTUALLY UNDERTAKES THE BURDEN OF PROVING EITHER THAT THERE WAS NO ERROR OR THAT THE BIDDER'S CLAIM WAS NOT MADE IN GOOD FAITH. * * *"

ACCORDINGLY, SINCE IT WAS BELIEVED THAT A MISTAKE WAS MADE BY THE COMPANY IN ITS BID AND THAT POSSIBILITY WAS CONFIRMED BY INFORMATION RECEIVED FROM THE BIDDER PRIOR TO AWARD, WE DO NOT REGARD THE AWARD AS HAVING RESULTED IN A BINDING CONTRACT. SEE ALTA ELECTRIC AND MECHANICAL COMPANY, INC. V. UNITED STATES, 90 CT.CL. 466, 476; AND 17 COMP. GEN. 416, 418. IT FOLLOWS THAT THE INDEBTEDNESS FOR EXCESS COSTS STATED AGAINST THE JONES WAX COMPANY SHOULD BE CANCELED.