B-160636, AUG. 22, 1967

B-160636, AUG. 22, 1967

CONTRACTS - MISTAKES - RELIEF DECISION TO NATIONAL COMPANY, INC. REQUESTING RELIEF IN AMOUNT OF $1,479,563 UNDER A.F. CONTRACT FOR FURNISHING COMMUNICATION SETS. CONTRACTOR WHOSE BID WAS $17,965, LOWER THAN SECOND LOW BID FOR COMMUNICATION SETS AND WHO CLAIMS THAT BID SHOULD HAVE BEEN $4,428,018 INSTEAD OF $2,948,455 MAY NOT HAVE CLAIM ALLOWED SINCE AWARD WAS MADE ON FIXED-PRICE BASIS WITHOUT COST BREAKDOWN AND THERE IS NO BASIS TO CONCLUDE THAT CONTRACTING OFFICER SHOULD BE A NOTICE OF ERROR.

TO NATIONAL COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTERS OF OCTOBER 17 AND DECEMBER 20, 1966, REQUESTING FINANCIAL RELIEF IN THE AMOUNT OF $1,479,563, UNDER CONTRACT NO. AF 19/628/-4860.

THE CONTRACT WAS AWARDED AS A RESULT OF TWO-STEP FORMAL ADVERTISEMENT AND PROVIDES FOR THE FURNISHING OF 26 OPERATIONS CENTRALS AND 26 COMMUNICATION SETS TO BE DELIVERED FOR THE SUM OF $2,948,455. IN YOUR CLAIM FOR RELIEF YOU STATE THAT YOUR BID ON WHICH THE CONTRACT WAS BASED WAS ERRONEOUS BECAUSE THE OFFICER OF YOUR COMPANY WHO SUBMITTED THE BID WAS NOT RESPONSIBLE FOR HIS ACTS. YOU HAVE FURNISHED AN ESTIMATE OF $4,428,018 WHICH YOU SAY SHOULD HAVE BEEN SUBMITTED AS YOUR BID. IN ADDITION, YOU HAVE FURNISHED A BRIEF OF ALL BIDS SUBMITTED UNDER THE INVITATION. THE SECOND LOW BID WAS THAT SUBMITTED BY WESTINGHOUSE IN THE AMOUNT OF $2,966,420. THE SIX OTHER BIDS RECEIVED RANGED IN PRICE FROM $4,624,765 TO $8,961,217. YOU INDICATE THAT WITH THE EXCEPTION OF THE BID OF WESTINGHOUSE, THE THEN CURRENT CONTRACTOR, YOUR ESTIMATE WHICH SHOULD HAVE BEEN BID IS MORE IN LINE WITH THE OTHER BIDS SUBMITTED.

ALTHOUGH YOUR BID WAS CONSIDERABLY LOWER THAN SIX OF THE OTHER BIDS RECEIVED, IT WAS ONLY $17,965 LOWER THAN THE BID OF WESTINGHOUSE FROM WHICH, BUT FOR YOUR ERRONEOUS BID, THE GOVERNMENT COULD HAVE OBTAINED THE SUPPLIES AND SERVICES. IN ADDITION, IT IS ADMINISTRATIVELY REPORTED THAT SINCE THE AWARD WAS MADE ON A FIXED-PRICE BASIS NO COST BREAKDOWN WAS SUBMITTED FOR ANALYSIS PRIOR TO AWARD. IN VIEW THEREOF, WE DO NOT THINK IT REASONABLY CAN BE CONCLUDED THAT THE CONTRACTING OFFICER WAS ON NOTICE OF ANY ERROR IN YOUR BID EVEN THOUGH SIX OF THE BIDS WERE HIGHER THAN YOUR BID. CONSEQUENTLY, IT APPEARS THAT THE ACCEPTANCE OF YOUR BID WAS MADE IN GOOD FAITH AND IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. IT APPEARS THAT THE ERROR MADE IN SUBMITTING THE ERRONEOUS BID WAS UNILATERAL--NOT MUTUAL--AND THEREFORE NO LEGAL BASIS EXISTS FOR RELIEVING YOU OF YOUR OBLIGATIONS UNDER THE CONTRACT. SEE EDWIN DOUGHERTY AND M. H. OGDEN V. UNITED STATES, 102 CT. CL. 249, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, HAVING REGARD FOR THE FACTS AND THE LAW APPLICABLE THERETO WE SEE NO LEGAL BASIS FOR ALLOWING ANY PART OF YOUR CLAIM.