B-165329, OCT. 22, 1968

B-165329, OCT. 22, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 24, 1968, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE INTERSTATE ELECTRIC CO., INC., TO HAVE BEEN MADE IN ITS BID UPON WHICH AN AWARD WAS MADE BY THE BUREAU OF RECLAMATION.

THE BUREAU OF RECLAMATION, UNITED STATES DEPARTMENT OF INTERIOR, BY INVITATION DATED JULY 18, 1968, UNDER SPECIFICATIONS NO. DC-6664, REQUESTED BIDS FOR THE CONSTRUCTION OF THE PARKER-BLYTHE 161 - KILOVOLT TRANSMISSION LINE NO. 2, PARKER-DAVIS PROJECT, CALIFORNIA. THE WORK TO BE PERFORMED WAS DIVIDED INTO 63 ITEMS BUT IT WAS PROVIDED THAT NO BID WOULD BE CONSIDERED FOR ONLY A PART OF THE SCHEDULE.

TEN BIDS WERE RECEIVED AND OPENED ON AUGUST 6, 1968, AND THE INTERSTATE ELECTRIC CO., INC., WAS DETERMINED TO BE THE LOW RESPONSIVE BIDDER WITH AN AGGREGATE BID TOTALING $1,471,422.53. OTHER BIDS VARIED FROM $1,581,087.53 TO $2,998,545.53. THE GOVERNMENT ENGINEER'S ESTIMATE WAS $1,746,802. THEREFORE, INTERSTATE WAS ADVISED OF AN AWARD TO IT ON AUGUST 27, 1968. ON AUGUST 29, 1968, AN OFFICIAL OF INTERSTATE ASSERTED IN A TELEPHONE CALL TO THE BUREAU OFFICES IN DENVER THAT THE INTERSTATE BID FOR ITEM NO. 1 WAS IN ERROR BY $100,000 AND THAT THE PRICE FOR ITEM 1 SHOULD HAVE BEEN $161,760. ITEM NO. 1 CALLED FOR A LUMP-SUM BID FOR "CONSTRUCTING ACCESS ROADS AND CLEARING LAND AND RIGHT-OF-WAY.' THE CIRCUMSTANCES SURROUNDING THE CLAIMED MISTAKE ARE STATED TO BE THE FOLLOWING:

INTERSTATE ELECTRIC CO., INC.'S CHIEF ENGINEER TELEPHONED THE PRESIDENT OF INTERSTATE ON AUGUST 6, 1968, JUST PRIOR TO BID OPENING, AND STATED THAT THE AMOUNT TO BE INSERTED IN ITEM 1 WAS $161,760. HOWEVER, THE PRESIDENT OF INTERSTATE INSERTED THE AMOUNT OF $61,760 IN THE BID RATHER THAN THE AMOUNT STATED BY THE CHIEF ENGINEER. THE PRESIDENT AND THE CHIEF ENGINEER OF INTERSTATE HAVE SUBMITTED AFFIDAVITS ALONG WITH ATTACHMENTS PURPORTING TO BE WORKSHEETS SUBSTANTIATING THE ASSERTED OMISSION OF $100,000 IN ITEM NO. 1. ACCORDINGLY, THE CONTRACTOR HAS REQUESTED THAT THE CONTRACT BE REVISED UPWARDS BY $100,000.

GENERALLY, A CONTRACT WILL NOT BE REFORMED WHEN A UNILATERAL MISTAKE IS ALLEGED AFTER THE CONTRACT HAS BEEN AWARDED BECAUSE, ONCE A BID HAS BEEN ACCEPTED, A BINDING CONTRACT RESULTS AND THE CONTRACTOR MUST BEAR THE CONSEQUENCES OF HIS OWN MISTAKE. 36 COMP. GEN. 441. HOWEVER, WHERE THE CIRCUMSTANCES ARE SUCH THAT, PRIOR TO ACCEPTANCE OF THE BID, THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR THEREIN, ACCEPTANCE OF THE BID DOES NOT RESULT IN A BINDING CONTRACT. HOWEVER, IN THE INSTANT CASE, NO ERROR WAS APPARENT ON THE FACE OF THE BID AND AT THE TIME OF ACCEPTANCE, THE CONTRACTING OFFICER HAD NO ACTUAL OR CONSTRUCTIVE NOTICE OF THE ALLEGED ERROR. AN EXAMINATION OF THE ABSTRACT OF BIDS DISCLOSES THAT AS TO ITEM NO. 1 THE ENGINEER'S ESTIMATE WAS $180,000 AS COMPARED TO THE INTERSTATE BID OF $61,760. OTHER BIDS FOR THIS ITEM VARIED FROM A LOW OF $83,860 TO A HIGH OF $484,665. HOWEVER, THESE DISPARITIES ARE NOT SIGNIFICANT IN THE CASE OF AN AWARD IN THE AGGREGATE RATHER THAN ON AN ITEM-BY-ITEM BASIS. IT IS THE GENERAL RULE THAT A CONTRACTING OFFICER IS NOT UNDER A DUTY TO COMPARE BID PRICES ON INDIVIDUAL ITEMS WHERE AWARD IS TO BE MADE IN THE AGGREGATE. SEE 17 COMP. GEN. 534; 42 ID. 383; ALLIED CONTRACTORS, INC. V UNITED STATES, 159 CT. CL. 548. WHILE THE AMOUNT INTERSTATE BID FOR ITEM 1 IS ONLY APPROXIMATELY ONE-THIRD THE AMOUNT OF THE GOVERNMENT ENGINEER'S ESTIMATE OF $180,000, THE TOTAL AMOUNT BID FOR THE ENTIRE SCHEDULE BY INTERSTATE WAS NOT SUFFICIENTLY OUT OF LINE WITH THE ENGINEER'S ESTIMATE OR THE AGGREGATE AMOUNT OF THE SECOND LOW BID TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE ERROR. THE LOW BID IS ONLY 16 PERCENT LOWER THAN THE ENGINEER'S ESTIMATE AND ONLY 6.9 PERCENT LESS THAN THE NEXT HIGH BID. IS ALSO NOTED THAT ONE OF THE 10 BIDDERS, WASATCH ELECTRIC CO., BID $83,860 FOR ITEM 1.

THE ACCEPTANCE OF THE BID OF INTERSTATE WAS MADE IN GOOD FAITH AND WITHOUT NOTICE, ACTUAL OR CONSTRUCTIVE, OF ANY ERROR. THE RESULTING CONTRACT, IN OUR OPINION, WAS THEREFORE VALID AND BINDING, AND FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249, 259.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V UNITED STATES, 100 CT. CL. 120, 163. ANY ERROR IN THE BID WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THEREFORE, SUCH ERROR AS WAS MADE IN THE BID WAS UNILATERAL -- NOT MUTUAL -- AND, THEREFORE, DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE B-162811, DECEMBER 22, 1967.

WITHOUT A COMPENSATING BENEFIT TO THE UNITED STATES, AGENTS AND OFFICERS OF THE GOVERNMENT HAVE NO AUTHORITY TO DISPOSE OF THE MONEY OR PROPERTY OF THE UNITED STATES, TO MODIFY EXISTING CONTRACTS, OR TO SURRENDER OR WAIVE CONTRACT RIGHTS THAT HAVE VESTED IN THE GOVERNMENT. SEE SIMPSON V UNITED STATES, 172 U.S. 372; UNITED STATES V AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.2D 141, CERTIORARI DENIED 280 U.S. 574; THE PACIFIC HARDWARE AND STEEL CO. V UNITED STATES, 49 CT. CL. 327, 335; AND BAUSCH AND LOMB OPTICAL COMPANY V UNITED STATES, 78 CT. CL. 584, 607.

THE ENCLOSURES TO THE LETTER OF SEPTEMBER 24, 1968, ARE RETURNED HEREWITH, AND YOU ARE ADVISED THAT UNDER THE FACTS DISCLOSED BY THE RECORD IN THIS CASE, WE CAN FIND NO LEGAL BASIS FOR INCREASING THE CONTRACT PRICE ON ACCOUNT OF THE ALLEGED MISTAKE IN BID.