B-163083, DEC. 28, 1967

B-163083, DEC. 28, 1967

BIDS - MISTAKES - CORRECTION DECISION TO SECY. OF AGRICULTURE RE PROPRIETY OF ADDITIONAL PAYMENT TO BIDDER BECAUSE OF ERROR IN BID FOR RENTAL OF TRACTOR FOR SEEDING NATIONAL FOREST LAND IN INYO NATIONAL FOREST. LOW BIDDER WHO WHEN REQUESTED TO VERIFY BID FOR SEEDING ALLEGED THAT PRICE SHOULD HAVE BEEN $3.45 PER ACRE INSTEAD OF $2.84 BECAUSE TRANSPORTATION HAD NOT BEEN INCLUDED IN PRICE PER ACRE MAY BE ALLOWED ADDITIONAL AMOUNT SINCE ACCEPTANCE OF BID WITH KNOWLEDGE OR SUSPICION OF ERROR DOES NOT CONSUMMATE A VALID CONTRACT. THEREFORE, SINCE AMOUNT CLAIMED IS STILL LOWEST PRICE RECEIVED PAYMENT MAY BE MADE.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 8, 1967, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO WHETHER MR. SAM CLELAND MAY BE PAID THE SUM OF $762.50 BECAUSE OF AN ERROR MADE IN HIS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 4-67-3 ISSUED BY THE FOREST SERVICE, INYO NATIONAL FOREST.

THE SUBJECT INVITATION WAS ISSUED ON SEPTEMBER 16, 1966, SOLICITING BIDS FOR THE RENTAL OF A TRACTOR FOR SEEDING APPROXIMATELY 1,250 ACRES OF LAND. THREE BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 26, 1966. THE BIDS WERE IN THE TOTAL AMOUNTS OF $3,550, $4,662.50 AND $18,375. MR. CLELAND WAS THE LOW BIDDER WITH A UNIT PRICE OF $2.84 PER ACRE AND THE SECOND LOW BIDDER QUOTED $3.73 PER ACRE. BY LETTER DATED SEPTEMBER 27, 1966, MR. CLELAND WAS REQUESTED TO VERIFY THE UNIT PRICE AND TOTAL AMOUNT OF HIS BID. IN REPLY, MR. CLELAND STATED THAT HIS BID WAS NOT CORRECT AND THAT THE UNIT PRICE SHOULD BE $3.45 FOR A TOTAL AMOUNT OF $4,312.50. EXPLANATION OF THE ERROR MR. CLELAND STATED THAT THE DIFFERENCE IN PRICE OF $3.45 AND THE ORIGINAL BID PRICE OF $2.84 PER ACRE WAS DUE TO THE FACT THAT TRANSPORTATION WOULD RUN AS HIGH AS $762.50 WHICH HAD BEEN FIGURED BUT WAS NOT INCLUDED IN THE ORIGINAL UNIT PRICE BID PER ACRE. THE CONTRACTING OFFICER BY LETTER OF OCTOBER 4, 1966, ADVISED MR. CLELAND THAT, BECAUSE OF URGENCY, AN AWARD WAS BEING MADE TO HIM ON THE BASIS OF THE MISTAKEN BID, SUBJECT TO LATER DETERMINATION OF THE ERROR BY THE GOVERNMENT. THE WORK HAS BEEN PERFORMED AND THE CONTRACTOR HAS BEEN PAID THE UNIT PRICE OF $2.84 PER ACRE.

THE ACCEPTANCE OF A BID WITH KNOWLEDGE OR SUSPICION OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT AND RESCISSION OF THE CONTRACT IS ALLOWED. SEE 37 COMP. GEN. 706 AND COURT CASES CITED THEREIN. IF, WHEN THE CONTRACT IS RESCINDED, THE INTENDED GOODS HAVE BEEN DELIVERED, RESTITUTION IS MADE ON THE BASIS OF THE REASONABLE VALUE OF THE FULL PERFORMANCE, LIMITED TO THE NEXT LOWEST CORRECT BID. C. N. MONROE MANUFACTURING COMPANY V. UNITED STATES, 143 F.SUPP. 449; M. L. SHEPARD V. UNITED STATES, 95 CT.CL. 407; 37 COMP. GEN. 685.

ACCORDINGLY, SINCE THE ADDITIONAL AMOUNT OF $762.50 CLAIMED BY THE CONTRACTOR IS STILL THE LOWEST PRICE RECEIVED, PAYMENT MAY BE MADE IN THAT AMOUNT AS RECOMMENDED BY THE ASSISTANT SECRETARY.