B-4118, JUNE 19, 1939, 18 COMP. GEN. 942

B-4118, JUNE 19, 1939, 18 COMP. GEN. 942

CONTRACTS - MISTAKES - BIDS - ALLEGATION AFTER VERIFICATION AND AWARD WHERE, AFTER GOVERNMENT REPRESENTATIVES HAD CONFERRED WITH THE LOW BIDDER TO ASCERTAIN ITS ABILITY TO PERFORM THE WORK CONTEMPLATED BY THE INVITATION FOR BIDS, AND ACCEPTANCE OF THE BID AFTER ASSURANCE OF THE BIDDER THAT IT FULLY UNDERSTOOD THE REQUIREMENTS OF THE INVITATION, THE BIDDER ALLEGES MISTAKE IN THAT IT WAS UNAWARE THAT THE ARTICLES COULD NOT BE MANUFACTURED IN THE MANNER IT HAD CONTEMPLATED AND THAT CERTAIN TYPE TESTS WOULD BE REQUIRED, THERE IS NO LEGAL BASIS FOR RELEASING THE BIDDER FROM THE OBLIGATIONS IMPOSED UNDER ITS ACCEPTED BID AND BID BOND, THE SPECIFICATIONS AND DRAWINGS HAVING BEEN CLEAR AND UNAMBIGUOUS; THE RELIANCE ON REPRESENTATIONS OF ITS SUPPLIER NOT AFFORDING ANY BASIS FOR RELIEF; THE CONTRACT RESULTING FROM THE BID ACCEPTANCE NOT BEING UNCONSCIONABLE; THE MISTAKE IN BID NOT HAVING BEEN MUTUAL, NOR THE DIFFERENCE IN BID PRICES BETWEEN THE ACCEPTED BID AND THE ONLY OTHER BID SUCH AS TO INDICATE ERROR OR SO APPARENT AS TO PRESUME THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF; THE BID PRICE AND BID ACCEPTANCE HAVING BEEN AS INTENDED BY THE RESPECTIVE PARTIES; AND THE GOVERNMENT OR ITS REPRESENTATIVES NOT BEING UNDER ANY DUTY TO INFORM THE BIDDER THAT THE MEANS IT PROPOSED TO FOLLOW IN THE MANUFACTURE OF THE ARTICLES MIGHT NOT BE SUCCESSFUL, IT BEING THE DUTY OF THE BIDDER TO ANTICIPATE ANY OBSTACLE WHICH MIGHT BE ENCOUNTERED IN THE PERFORMANCE OF THE WORK. 11 COMP. GEN. 65, INVOLVING MISTAKE ALLEGED OR DISCOVERED PRIOR TO AWARD, DISTINGUISHED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, JUNE 19, 1939:

THERE HAS BEEN RECEIVED YOUR LETTER OF JUNE 1, 1939, AS FOLLOWS:

ENCLOSED HEREWITH IS LETTER DATED MAY 18, 1939, FROM THE H. K. PORTER COMPANY, INC., PITTSBURGH, PA., REQUESTING RELEASE FROM BID SUBMITTED BY IT IN RESPONSE TO CIRCULAR NO. 953-39-179, ISSUED BY THE WATERVLIET ARSENAL FOR THE PROCUREMENT OF FORGINGS AND PLUNGERS FOR 5 INCH NAVY GUNS UNDER MANUFACTURE AT THE WATERVLIET ARSENAL.

THIS MATERIAL HAS BEEN PROCURED IN THE PAST AND THE ONLY BIDDER IN EACH CASE WAS THE INTERNATIONAL NICKEL COMPANY, INC. THE CIRCULAR ADVERTISEMENT HERE REFERRED TO WAS FORWARDED TO EACH OF THE FOLLOWING FIRMS:

THE INTERNATIONAL NICKEL CO., INC.

AMERICAN BRASS COMPANY.

WHITEHEAD METAL PRODUCTS CO.

AMERICAN MANGANESE BRONZE CO.

PITTSBURGH FORGE CO.

HEPPENSTALL CO.

BOLTON AND LUCAS.

THE STEEL IMPROVEMENT AND FORGE CO.

KOPPERS CO.

TIMKEN DETROIT AXLE CO.

THE BURGESS CO., INC.

IT WILL BE NOTED THAT NO COPY WAS FURNISHED THE H. K. PORTER COMPANY, INC. HOWEVER, IN VIEW OF THE FACT THAT MR. LYON MCCANDLESS IS VICE PRESIDENT OF THE BURGESS COMPANY AND ALSO THE H. K. PORTER COMPANY, IT IS POSSIBLE THAT THE INVITATION TO BID FORWARDED TO THE BURGESS COMPANY MAY HAVE BEEN TURNED OVER BY THAT FIRM TO THE PORTER COMPANY.

ON APRIL 12TH, BIDS WERE OPENED AT THE WATERVLIET ARSENAL AND ONLY TWO FIRMS BID ON THIS MATERIAL, NAMELY, THE H. K. PORTER COMPANY AND THE INTERNATIONAL NICKEL COMPANY. A SIGNED COPY OF EACH OF THE BIDS SUBMITTED IS ENCLOSED HEREWITH FOR YOUR INFORMATION. IT WILL BE NOTED THAT THE BID SUBMITTED BY THE H. K. PORTER COMPANY IS APPROXIMATELY 2/3 OF THE BID OF THE INTERNATIONAL NICKEL COMPANY, THE TOTAL DIFFERENCE BETWEEN THE TWO BIDS BEING APPROXIMATELY $9,000.

INASMUCH AS THE BID OF THE H. K. PORTER COMPANY WAS SO MUCH LOWER THAN ANY PRICE HERETOFORE QUOTED ON THIS MATERIAL THE WATERVLIET ARSENAL REQUESTED THE ORDNANCE OFFICER STATIONED AT THE PITTSBURGH DISTRICT ORDNANCE OFFICE TO CONTACT THE PORTER COMPANY WITH A VIEW TOWARD ASCERTAINING ITS ABILITY TO SATISFACTORILY PERFORM UNDER THIS CONTRACT. CORRESPONDENCE BETWEEN THE WATERVLIET ARSENAL AND PITTSBURGH ORDNANCE DISTRICT IS ENCLOSED HEREWITH, WHICH INDICATES THAT AFTER DUE INSPECTION AND CONFERENCE WITH OFFICIALS OF THE H. K. PORTER COMPANY THE WAR DEPARTMENT WAS ASSURED THAT IF AWARD BE MADE TO THE H. K. PORTER COMPANY PERFORMANCE COULD REASONABLY BE EXPECTED WITHIN THE TIME SET FOR DELIVERY.

AFTER SUBMITTING CONTRACT TO THE PORTER COMPANY FOR EXECUTION, THIS FIRM REALIZED ITS INABILITY TO PERFORM ONLY AFTER CERTAIN MATTERS PERTAINING TO THE CONTRACT WERE BROUGHT TO ITS ATTENTION BY REPRESENTATIVES OF THE INTERNATIONAL NICKEL COMPANY. THE BID APPEARS TO HAVE BEEN SUBMITTED IN GOOD FAITH WITH THE DEFINITE UNDERSTANDING OF WHAT WAS ULTIMATELY REQUIRED BUT DUE TO INEXPERIENCE ON THE PART OF THE SUCCESSFUL BIDDER, MANUFACTURING PROCESSES WERE NOT KNOWN.

THE ITEMS TO BE PROCURED ARE REQUIRED IN THE MANUFACTURE OF 5 INCH GUNS FOR THE NAVY DEPARTMENT AND IT IS VITALLY IMPORTANT THAT THESE ITEMS BE PROCURED WITHOUT DELAY IN ORDER THAT THE NAVY ORDER MAY BE COMPLETED WITHIN A SPECIFIED TIME, AS THESE GUNS MUST BE INSTALLED ON SHIPS NOW UNDER CONSTRUCTION. HOWEVER, THIS DEPARTMENT IS OF THE OPINION THAT THE H. K. PORTER COMPANY CANNOT LEGALLY BE RELIEVED FROM THE TERMS OF ITS BID.

IT IS REQUESTED THAT THE ENCLOSED PAPERS BE RETURNED TO THIS OFFICE WITH YOUR DECISION.

THE NEEDS OF THE GOVERNMENT WERE DESCRIBED IN THE INVITATION AS FOLLOWS:

TABLE ITEM ARTICLES OR SERVICES QUANTITY

NO. 1 FORGINGS, COPPER-NICKEL ALLOY, AIR CYLINDERS

FOR 5-INCH NAVY GUNS PER NAVY DEPARTMENT

SPECIFICATION 46 M 7F, MACHINED AND TESTED 43 TO 50

IN ACCORDANCE WITH DRAWING 159364 DATED

6/3/32.

DRAWING QUOTED ABOVE SHOWS THE DIMENSIONS

THE FORGINGS MUST BE MACHINED TO PRIOR TO

THE HYDROSTATIC TESTS INDICATED.

AIR-PRESSURE TESTS WILL BE MADE BY THIS

ARSENAL AFTER FINAL MACHINING OF THE

REMAINDER OF THE FORGINGS AT THIS PLANT.

SHOULD ANY FORGING FAIL TO MEET THE AIR TESTS

PRESCRIBED THE CONTRACTOR WILL BE REQUIRED

TO MAKE REPLACEMENT. 2 PLUNGERS, PER DRAWING 159398 REVISED 2/26/35 ---- 43 TO 50

ITEM 2 TO BE MADE OF COPPER-NICKEL ALLOY, THE

CHEMICAL AND PHYSICAL REQUIREMENTS OF WHICH

ARE SHOWN ON THE DRAWING QUOTED ABOVE.

BE SEMIFINISH MACHINED BY CONTRACTOR IN

ACCORDANCE WITH THE DRAWING REQUIREMENTS.

FINAL MACHINING WILL BE DONE BY THIS ARSENAL.

AN ECCENTRICITY OF .02 IN THE BORE OF THE

PLUNGER IN RELATION TO THE EXTERIOR WILL BE

PERMITTED.

INSPECTION OF BOTH THE ABOVE ITEMS WILL BE MADE

AT PLANT OF THE CONTRACTOR WITH FINAL

INSPECTION AND ACCEPTANCE AT THIS ARSENAL. ALL

HYDROSTATIC TESTS WHICH MUST BE MADE BY THE

CONTRACTOR WILL BE MADE IN THE PRESENCE OF THE

INSPECTOR.

EXAMINATION OF THE BIDS SUBMITTED WITH YOUR LETTER SHOWS THAT THE BID OF THE H. K. PORTER CO., INC., FOR FURNISHING 50 FORGINGS UNDER ITEM 1 AND 50 PLUNGERS UNDER ITEM 2 WAS IN THE RESPECTIVE AMOUNTS OF $17,933 AND $3,925, AS AGAINST THE PRICES OF $24,733.50 AND $5,205 QUOTED BY THE INTERNATIONAL NICKEL CO., INC., THE ONLY OTHER BIDDER.

IT APPEARS THAT THE CONTRACTING OFFICER, BEFORE MAKING THE AWARD, REQUESTED THE PITTSBURGH ORDNANCE DISTRICT TO FURNISH A REPORT AS TO WHETHER THE LOW BIDDER WAS IN A POSITION TO MANUFACTURE THE REQUIRED PARTS IN ACCORDANCE WITH THE DRAWINGS AND SPECIFICATIONS AND WITHIN THE PERIOD OF 60 DAYS DESIGNATED IN ITS BID. THE PITTSBURGH DISTRICT REPORTED UNDER DATE OF APRIL 15, 1939, IN PART, AS FOLLOWS:

2. * * * THE BID SUBMITTED BY THIS FACILITY WAS FORWARDED WITHOUT THE KNOWLEDGE OF OR SUGGESTION BY THIS OFFICE. SINCE RECEIVING YOUR LETTER, I HAVE BEEN INFORMED THAT THE PLANT MANAGER VISITED WASHINGTON, D.C., AND STUDIED PRODUCTION OF THIS ITEM AT THE NAVY YARD. THE MANAGEMENT HAS INFORMED ME THAT THEY HAVE SPECIFIC QUOTATION FROM THE INTERNATIONAL NICKEL COMPANY FOR THE METAL TO BE USED.

3. PROMPTLY UPON RECEIPT OF THE BASIC LETTER, A CONFERENCE WAS ARRANGED BETWEEN THE INSPECTION STAFF OF THIS OFFICE AND THE MANAGEMENT OF THE H. K. PORTER COMPANY IN ORDER TO DETERMINE THE CAPABILITY OF THIS FACILITY TO PERFORM THE WORK IN QUESTION. THE INSPECTION STAFF OF THIS OFFICE IS FULLY AWARE OF THE MANUFACTURING AND TEST PROBLEMS INVOLVED, AS THEY HAVE BEEN ENGAGED FOR SOME TIME IN CONDUCTING SUCH INSPECTION FOR WATERTOWN AND ROCK ISLAND ARSENALS AT THE PLANT OF THE INTERNATIONAL NICKEL COMPANY. A RESULT OF THE CONFERENCE, THE QUESTIONS RAISED BY WATERVLIET ARSENAL ARE ANSWERED SPECIFICALLY AS FOLLOWS:

1. Q. BID SUBMITTED ON PATENTED CHEMICAL ANALYSIS OF MONEL METAL.

A. THE H. K. PORTER COMPANY WILL OBTAIN THE K MONEL METAL FROM THE INTERNATIONAL NICKEL COMPANY, HUNTINGTON, W.VA., IF THEY ARE THE SUCCESSFUL BIDDERS ON THE SUBJECT ORDER. ALL CHEMICAL AND POSSIBLY PHYSICAL TESTS WILL HAVE TO BE CONDUCTED AT THE INTERNATIONAL NICKEL COMPANY. THE PORTER COMPANY HAS NO CHEMICAL OR PHYSICAL LABORATORY FACILITIES. TENTATIVE ARRANGEMENTS HAVE BEEN MADE WITH OUR INSPECTION STAFF TO MAKE TESTS LOCALLY OR AT THE INTERNATIONAL NICKEL COMPANY.

2. Q. CAN THEY MANUFACTURE IN ACCORDANCE WITH DRAWINGS, SPECIFICATIONS, AND PRESCRIBED TESTS?

A. WHILE THE H. K. PORTER COMPANY'S EQUIPMENT IS QUITE OLD, IT IS BELIEVED THAT THEY CAN MACHINE TO THE TOLERANCE REQUIRED ON THE DRAWINGS. THEY ARE NOT EQUIPPED FOR FINE PRECISION WORK.

3. Q. CAN THEY DELIVER IN SIXTY DAYS?

A. IT IS BELIEVED THAT DELIVERY SCHEDULES CAN BE MET PROVIDED THE INTERNATIONAL NICKEL COMPANY MAKES DELIVERY OF MONEL METAL ON SCHEDULE.

4. Q. HAVE THEY PREVIOUSLY MANUFACTURED PARTS OF THIS TYPE?

A. NO. THEY ARE DOING ROUGH MACHINE WORK ON SHAFTS, FORGINGS, AND VALVES FOR THE U.S. ARMY ENGINEERS.

5. Q. STATEMENT OF SOURCE OF FOREIGN MATERIALS.

A. THE INTERNATIONAL NICKEL COMPANY WILL SUPPLY THE MONEL METAL.

6. Q. STATEMENT OF EXCEPTIONS.

A. THE PORTER COMPANY STATES THEY FULLY UNDERSTAND REQUIREMENTS AND DO NOT DESIRE TO SUBMIT A STATEMENT OF EXCEPTIONS.

4. IN VIEW OF THE FACT THAT THE MONEL METAL WILL BE SUPPLIED BY THE INTERNATIONAL NICKEL COMPANY, AND SINCE PRECISION MACHINE WORK IS NOT INVOLVED, IT IS THE OPINION OF THIS OFFICE THAT THE H. K. PORTER COMPANY IS IN A POSITION TO MANUFACTURE THE REQUIRED PARTS AND IN THE TIME SPECIFIED.

THE RECORD SHOWS THAT AFTER RECEIPT OF THE ABOVE-QUOTED REPORT AWARD WAS MADE AND PURCHASE ORDER ISSUED TO THE LOW BIDDER, THE H. K. PORTER CO., INC., ON APRIL 19, 1939, AND THAT IT WAS NOT UNTIL SOME TIME THEREAFTER THAT ANY MISTAKE OR INABILITY TO PERFORM WAS ALLEGED BY THE CONTRACTOR.

THE BASIS OR THEORY OF THE CONTRACTOR'S CLAIM FOR RELIEF FROM THE CONSEQUENCES OF THE ALLEGED MISTAKE IS SET FORTH IN ITS LETTER OF MAY 18, 1939, AS FOLLOWS:

THE H. K. PORTER COMPANY, INC., WAS FOUNDED IN 1866 AND HAS BEEN MANUFACTURING INDUSTRIAL LOCOMOTIVES AND MACHINERY FOR MORE THAN SEVENTY YEARS. THIS WORK INVOLVES EXTENSIVE FORGING AND MACHINING OF STEEL. THE RESULT OF THE DEPRESSION THE COMPANY WAS FORCED THROUGH A PERIOD OF REORGANIZATION. IT WAS FINALLY REFINANCED AND BEGAN BUSINESS ANEW ON MARCH 1, OF THIS YEAR. BUSINESS WAS SLOW AND WE TURNED TO GOVERNMENT WORK IN AN EFFORT TO SUPPLEMENT AND KEEP OUR ORGANIZATION INTACT AND FORGE AHEAD. WE HAVE RECEIVED AND COMPLETED SEVERAL CONTRACTS FOR THE U.S. ENGINEERS FOR MACHINE WORK IN LINE WITH OUR LONG YEARS OF EXPERIENCE. THE ABOVE CIRCULAR NO. 953-39-179, CAME INTO OUR FACTORY. THIS WAS OUR FIRST INVITATION TO BID ON ORDNANCE WORK, BUT ON LOOKING IT OVER WE SAW NO REASON WHY WE SHOULD NOT BE ABLE TO DO IT.

WE ACCORDINGLY READ THE SPECIFICATION AND THE DRAWINGS AND IT SEEMED QUITE APPARENT TO US THAT THESE COPPER NICKEL FORGINGS COULD BE MADE BY TAKING A SMALL BLOCK AND HAMMERING IT OUT BY THE FORGING PROCESS TO APPROXIMATELY THE SIZE DESIRED. THEN WE PROPOSED TO MACHINE THE FORGING TO THE EXACT DIMENSIONS SHOWN ON NAVY DEPARTMENT DRAWING 159364, REFERRED TO IN THE INVITATION. IN THIS CONNECTION, IT MAY BE MENTIONED THAT OUR SHOP SUPERINTENDENT, AN ENGINEER WITH THIRTY YEARS OF EXPERIENCE IN MACHINE WORK, FOLLOWING EDUCATION AT CARNEGIE INSTITUTE OF TECHNOLOGY, HAD CONFIRMED THIS OPINION. HE HAD RECENTLY VISITED THE NAVAL GUN FACTORY IN WASHINGTON, D.C., LOOKING FOR WORK IN OUR LINE, AND SAW THIS SAME TYPE OF FORGINGS BEING MADE OF STEEL. HE HAD MADE A NOTE OF THESE SO WE DECIDED TO GO AHEAD WITHOUT HESITATION AND SUBMIT A BID, WITHOUT REALIZING THAT MONEL METAL CANNOT BE REFORGED TO MAKE AIR CYLINDERS OF THIS DESIGN.

PREPARATORY TO BIDDING WE INVITED QUOTATIONS ON MONEL METAL FROM WILLIAMS AND COMPANY, INC., OF PITTSBURGH, PA., THE LOCAL REPRESENTATIVES FOR MONEL METAL. WE RECEIVED A QUOTATION COVERING MONEL BILLETS, AND STATING THAT THEY WERE TO "MEET NAVY SPECIFICATIONS 46M7F INSOFAR AS CHEMICAL PROPERTIES ONLY ARE CONCERNED, WHICH WILL BE OF IDENTICAL MATERIAL WHICH INTERNATIONAL NICKEL COMPANY REFORGE TO MEET THE PHYSICAL PROPERTIES OF THIS SPECIFICATION.' THIS THEREBY WAS TO US A CONFIRMATION OF OUR CONCLUSION THAT THIS MONEL METAL COULD BE REFORGED TO MAKE THESE AIR CYLINDERS. WE ACCORDINGLY FIGURED ON A BLOCK OF METAL WHICH WE BELIEVED COULD BE REFORGED TO GIVE THE SIZE REQUIRED ON NAVY DRAWING NO. 159364, AND ON THAT BASIS THE UNIT PRICE OF 35 CENTS PER POUND WHICH THEY QUOTED TO US APPEARED TO BE ABOUT IN LINE. WE ACCORDINGLY FIGURED OUR EXPENSE FOR FORGING AND OTHER COSTS INVOLVED AND SUBMITTED OUR BID IN THE TOTAL SUM OF $19,669.50. WE UNDERSTAND WE ARE LOW BY APPROXIMATELY $7,000 AND THAT THE INTERNATIONAL NICKEL COMPANY WAS THE ONLY OTHER BIDDER.

A FEW DAYS AFTER THE BIDS WERE OPENED, ONE MR. W. A. MORTENSEN, CHIEF INSPECTOR, PITTSBURGH ORDNANCE DISTRICT, CALLED AT OUR FACTORY, WHICH IS LOCATED AT 49TH AND HARRISON STREETS IN PITTSBURGH, ADVISING THAT WATERVLIET ARSENAL HAD REQUESTED HIM TO INVESTIGATE WHETHER OR NOT WE COULD DO THIS JOB. WE SHOWED HIM OUR EQUIPMENT AND FACILITIES AND EXPLAINED TO HIM HOW WE HAD FIGURED ON DOING THIS WORK, INCLUDING THIS REFORGING PROCESS. AT THE CONCLUSION OF THE CONFERENCE HE STATED HE SAW NO REASON WHY WE COULD NOT DO THE JOB.

A FEW DAYS LATER, ABOUT APRIL 21ST, WE RECEIVED NOTIFICATION OF CONTRACT, WITH MULTIPLE COPIES, WITH REQUEST THAT WE EXECUTE THE SAME AND PROVIDE A BOND. WE ACCORDINGLY GOT IN TOUCH WITH A BONDING COMPANY TO WRITE THE BOND AND WERE JUST ABOUT READY TO HAVE THE PAPERS SIGNED UP AND THE CONTRACT RETURNED TO THE ARSENAL WHEN A REPRESENTATIVE FROM NEW YORK OF THE INTERNATIONAL NICKEL COMPANY, TOGETHER WITH A REPRESENTATIVE OF WILLIAMS AND COMPANY, THE LOCAL REPRESENTATIVES, CALLED ON US. AS SOON AS THE CONFERENCE WAS BEGUN THEY TOLD US IN THE FIRST PLACE THAT THE BLOCK WHICH WE HAD FIGURED ON WAS ENTIRELY TOO SMALL; THAT MONEL METAL CANNOT BE REFORGED TO MAKE THESE CYLINDERS; THAT IT IS NECESSARY TO BUY A FULL SIZE BLOCK AND HAVE IT MACHINED DOWN TO THE REQUIRED SIZE OF THE AIR CYLINDERS. THEY EXPLAINED THAT INSTEAD OF HAVING A BLOCK WEIGHING APPROXIMATELY 600 POUNDS, IT SHOULD BE ABOUT 1,700 POUNDS. WE CONFRONTED THEM WITH THE WILLIAMS AND COMPANY'S ABOVE LETTER OF APRIL 11 AND THEY THEN SAID MAYBE IT COULD BE FORGED AND THEY COOPERATED WITH US TO THE EXTENT OF SENDING US A BLOCK OF THE SIZE WE HAD ORDERED AND THE HEAD OF THEIR FORGED DIVISION OF HUNTINGTON, WEST VIRGINIA, TO SUPERINTEND THE WORK, AND AN EFFORT WAS MADE TO FORGE THE BLOCK, BUT WITHOUT SUCCESS. THIS MAN ADVISED THAT WE WOULD BE UNABLE TO MEET THE PHYSICAL TESTS WHICH WERE REQUIRED BY THE ARSENAL. WE HAD FIGURED ON A HYDROSTATIC TEST AS SHOWN ON DRAWING NO. 159364. THERE IS NO MENTION OF A PHYSICAL TEST ON THIS DRAWING, EVEN THOUGH THE INVITATION STATES: "MACHINED AND TESTED IN ACCORDANCE WITH DRAWING 159364.' THE ONLY TEST SHOWN ON THIS DRAWING, FROM OUR OBSERVATION, IS THE HYDROSTATIC TEST. THIS WAS SOLVED EVENTUALLY BY SOME ONE POINTING TO THE FOLLOWING WORDING IN A BLOCK IN THE RIGHTHAND CORNER:

"AIR CYLINDER FORGINGS COPPER NICKEL

ALLOY (46-M-7)," AND FROM THIS WE WERE REFERRED TO SPECIFICATION FOR "NICKEL-COPPER-ALLOY," 46-M-7-F, WHICH WAS A NAVY DEPARTMENT SPECIFICATION, WHICH EVENTUALLY DISCLOSED A PHYSICAL TEST. WE HAVE TO ADMIT THAT WE MISSED THIS EXTENUATING REFERENCE. PARAGRAPH 1 OF INVITATION SCHEDULE FOR BIDS SAID THAT FORGINGS WERE "MACHINED AND TESTED IN ACCORDANCE WITH DRAWING 159364.' WE REFERRED TO THAT DRAWING AND FOUND NOT ONE WORD ABOUT PHYSICAL TESTS, AND UNFORTUNATELY STOPPED THERE.

WE MAY ADD FURTHER THAT TO THE BEST OF OUR INFORMATION AND BELIEF NO ONE EXCEPT THE INTERNATIONAL NICKEL COMPANY, THE OTHER BIDDER ON THIS CIRCULAR, HAS EVER BEEN SUCCESSFUL IN PRODUCING THESE COPPER NICKEL AIR CYLINDERS.

AS ABOVE STATED, IN CASES WHERE THERE HAS BEEN AN HONEST MISTAKE IN BIDDING IT HAS BEEN THE UNIFORM POLICY OF THE GOVERNMENT TO RELIEVE THE CONTRACTOR FROM THE INJUSTICE OF FORCING HIM TO ACCEPT THE CONTRACT ONLY TO SUFFER A HEAVY LOSS. THIS PRINCIPLE, WHICH IS REFERRED TO AS REFORMATION OF BIDDING, IS RECOGNIZED IN 11 COMP. GEN. 65. THIS USUALLY OCCURS WHERE A BIDDER THROUGH MISTAKE LEAVES OUT OR FAILS TO ESTIMATE ON A PART OF THE WORK. IT SEEMS TO US, HOWEVER, THAT THIS CASE IS THE SAME IN PRINCIPLE. IT IS A MISTAKE IN BOTH CASES. WE FEEL THAT THE SITUATION WE ARE IN NOW CANNOT JUSTLY BE SAID TO BE DUE TO ANY FAULT OR NEGLIGENCE ON OUR PART. WE DILIGENTLY ENDEAVORED TO READ AND UNDERSTAND THE DRAWINGS AND SPECIFICATIONS BUT FOUND NOTHING IN THERE TO TELL US OF THE TRICKY CHARACTER OF MONEL METAL, MAKING IT NECESSARY THAT IT BE MACHINED FROM A LARGE BLOCK AND THAT IT COULD NOT BE REFORGED TO MAKE THIS PRODUCT. ALSO OVERLOOKED OR FAILED TO FIND THE SPECIFICATION REQUIREMENTS FOR PHYSICAL TEST.

SINCE THE CONTRACT HAD BEEN AWARDED TO THE H. K. PORTER CO., INC., BEFORE THERE WAS ANY ALLEGATION OF ERROR, THE QUESTION HERE INVOLVED IS NOT WHETHER THE CONTRACTOR MADE A BONA FIDE MISTAKE IN THE PREPARATION OF ITS BID--- WHICH POINT IS NOT CONCEDED--- BUT WHETHER, NEVERTHELESS,A LEGAL AND BINDING CONTRACT WAS FORMED BY THE ACCEPTANCE OF THE BID. IN THIS RESPECT THIS CASE IS TO BE DISTINGUISHED FROM THE CASE REPORTED IN 11 COMP. GEN. 65, AND THE OTHER CASES REFERRED TO IN THE CONTRACTOR'S LETTER, INVOLVING MISTAKES ALLEGED OR DISCOVERED PRIOR TO THE AWARD. THE CASE OF THE WHITE MOTOR CO., ALSO REFERRED TO BY THE COMPANY, APPEARS TO HAVE BEEN DISPOSED OF BY A CLAIMS SETTLEMENT ON THE APPARENT BASIS THAT THE SPECIFICATIONS WERE MISLEADING. THE ACTION IN THAT CASE WOULD NOT, IN ANY EVENT, CONSTITUTE A PRECEDENT FOR DISPOSITION OF THIS CASE.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AT THE TIME HE ACCEPTED THE BID AND SOUGHT TO TAKE ADVANTAGE THEREOF. 26 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362. THE STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS, WHICH BIDDERS ARE CAUTIONED IN THE INVITATION TO READ, PROVIDE IN PARAGRAPHS 14 AND 19 AS FOLLOWS:

WITHDRAWAL OF BIDS.--- BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED FROM BIDDERS PRIOR TO THE TIME FIXED FOR OPENING. NEGLIGENCE ON THE PART OF THE BIDDER IN PREPARING THE BID CONFERS NO RIGHT FOR THE WITHDRAWAL OF THE BID AFTER IT HAS BEEN OPENED.

ERRORS IN BID.--- BIDDERS OR THEIR AUTHORIZED AGENTS ARE EXPECTED TO EXAMINE THE MAPS, DRAWINGS, SPECIFICATIONS, CIRCULARS, SCHEDULE, AND ALL OTHER INSTRUCTIONS PERTAINING TO THE WORK, WHICH WILL BE OPEN TO THEIR INSPECTION. FAILURE TO DO SO WILL BE AT THE BIDDER'S OWN RISK, AND HE CANNOT SECURE RELIEF ON THE PLEA OF ERROR IN THE BID. IN CASE OF ERROR IN THE EXTENSION OF PRICES THE UNIT PRICE WILL GOVERN.

THERE IS NOTHING ON THE FACE OF THE BID OF THE H. K. PORTER CO., INC., TO INDICATE THAT THE AMOUNT THEREOF IS OTHER THAN THAT INTENDED BY THE BIDDER. WHILE ITS BID ON ITEM 1 IS APPROXIMATELY $6,800 LESS THAN THAT OF THE INTERNATIONAL NICKEL CO., INC., AND ITS BID ON ITEM 2 IS APPROXIMATELY $1,300 LESS THAN THAT OF THE OTHER BIDDER, SUCH DIFFERENCES, ALONE, WOULD NOT NECESSARILY INDICATE ERROR. IN FACT IT APPEARS THAT THERE WAS NO MISTAKE OR MISUNDERSTANDING ON THE PART OF EITHER PARTY TO THE CONTRACT AS TO THE ARTICLES THAT WERE REQUIRED TO BE FURNISHED OR THE PRICES THAT WERE TO BE PAID THEREFOR. IN OTHER WORDS IT APPEARS THAT THE BID WAS AS INTENDED BY THE BIDDER AND THE ACCEPTANCE WAS AS INTENDED BY THE CONTRACTING OFFICER. IN ANY EVENT, THE CONTRACTING OFFICER, AS STATED ABOVE, REQUESTED A REPORT AS TO THE BIDDER'S ABILITY TO PERFORM, AND WAS ADVISED THAT THE BIDDER FULLY UNDERSTOOD THE REQUIREMENTS. WHEN THE BIDDER IN EFFECT CONFIRMED ITS BID THE CONTRACTING OFFICER WAS UNDER NO FURTHER OBLIGATION TO PROTECT THE BIDDER'S INTEREST IN THE MATTER. AFTER SUCH VERIFICATION THERE WAS NO OTHER COURSE FOR HIM TO FOLLOW THAN TO ACCEPT THE BID AS SUBMITTED AND VERIFIED. 10 COMP. GEN. 388; 14 ID. 453; 18 ID. 39.

WITH RESPECT TO THE CONTRACTOR'S STATEMENTS TO THE EFFECT THAT IT HAD NOT CONTEMPLATED THAT PHYSICAL TESTS WOULD BE REQUIRED, IN ADDITION TO THE HYDROSTATIC TESTS SHOWN ON DRAWING NO. 159364, IT IS TO BE NOTED THAT THE INVITATION ITSELF SPECIFICALLY STATES THAT THE AIR CYLINDERS UNDER ITEM 1 ARE TO BE "PER NAVY DEPARTMENT SPECIFICATION 46 M 7F.' EXAMINATION OF THAT SPECIFICATION SHOWS THAT IT DEALS EXTENSIVELY WITH THE REQUIRED PHYSICAL PROPERTIES OF THE MATERIAL AND THE METHODS OF TESTING SUCH PROPERTIES. THAT SUCH PHYSICAL PROPERTIES WOULD BE REQUIRED WAS EXPRESSLY RECOGNIZED IN THE QUOTATION OF THE SUPPLIER'S REPRESENTATIVE, REFERRED TO IN THE CONTRACTOR'S LETTER.

THERE HAVE NOT BEEN OVERLOOKED THE CONTRACTOR'S STATEMENTS TO THE EFFECT THAT THE GOVERNMENT'S INSPECTOR WAS SHOWN ITS EQUIPMENT AND FACILITIES AND INFORMED HOW IT PROPOSED TO DO THE WORK, INCLUDING THE REFORGING PROCESS-- - SUCH STATEMENTS APPARENTLY BEING ADDUCED TO SHOW THAT THE GOVERNMENT EITHER JOINED IN A MUTUAL MISTAKE OR THROUGH ITS SUPERIOR KNOWLEDGE ATTEMPTED TO TAKE ADVANTAGE OF THE CONTRACTOR. IT IS IMPOSSIBLE TO DRAW EITHER OF THESE CONCLUSIONS FROM THE ABOVE QUOTED REPORT OF THE PITTSBURGH ORDNANCE DISTRICT. ON THE CONTRARY, IN VIEW OF THE FACTS REPORTED, IT DOES NOT APPEAR THAT THE OFFICERS OF THE GOVERNMENT IN ANY WAY CAUSED OR CONTRIBUTED TO ANY ERROR WHICH MAY HAVE BEEN MADE. THEY DID NOT REQUEST THE CONTRACTOR TO BID, AND, UPON RECEIPT OF ITS BID, TOOK EVERY REASONABLE PRECAUTION TO INSURE THAT THE CONTRACTOR UNDERSTOOD THE REQUIREMENTS OF THE INVITATION.

HOWEVER, EVEN IF IT COULD BE CONCLUSIVELY ESTABLISHED THAT THE REPRESENTATIVES OF THE GOVERNMENT WERE AWARE THAT THE CONTRACTOR PROPOSED TO USE A "REFORGING PROCESS AND IF IT COULD BE ESTABLISHED, ALSO, THAT THE CONTRACTING OFFICER DID NOT BELIEVE THAT SUCH PROCESS WAS PRACTICABLE OR POSSIBLE, IT WOULD NOT FOLLOW THAT THE GOVERNMENT WOULD BE RESPONSIBLE FOR THE CONTRACTOR'S INABILITY TO PERFORM THE CONTRACT. THE GOVERNMENT DID NOT MAKE AND WAS UNDER NO OBLIGATION TO MAKE ANY WARRANTY TO THE CONTRACTOR THAT ANY PARTICULAR MEANS COULD BE USED IN FINISHING A PRODUCT COMPLYING WITH THE REQUIREMENTS OF THE INVITATION, SPECIFICATIONS, AND DRAWINGS. IT APPEARS THAT SUCH REQUIREMENTS ARE CLEAR, AND THAT THE ARTICLES CAN BE MANUFACTURED IN STRICT ACCORDANCE THEREWITH.

IT WAS THE CONTRACTOR'S RESPONSIBILITY IN PREPARING ITS BID TO ANTICIPATE ANY OBSTACLES WHICH MIGHT BE ENCOUNTERED IN PERFORMANCES OF THE WORK. STATED BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF CARNEGIE STEEL CO. V. UNITED STATES, 240 U.S. 156, 164, IN HOLDING THAT DELAYS DUE TO SCIENTIFIC EXPERIMENTATION IN AN ENDEAVOR TO MEET THE REQUIREMENTS OF THE GOVERNMENT'S SPECIFICATIONS WERE NOT UNAVOIDABLE OR OTHERWISE EXCUSABLE UNDER THE LIQUIDATED-DAMAGES CLAUSE OF THE CLAIMANT'S CONTRACT:

* * * IT WOULD SEEM THAT THE VERY ESSENCE OF THE PROMISE OF A CONTRACT TO DELIVER ARTICLES IS ABILITY TO PROCURE OR MAKE THEM. BUT CLAIMANT SAYS ITS IGNORANCE WAS NOT PECULIAR, THAT IT WAS SHARED BY THE WORLD AND NO ONE KNEW THAT THE PROCESS ADEQUATE TO PRODUCE 14-INCH ARMOR PLATE WOULD NOT PRODUCE 18-INCH ARMOR PLATE. YET CLAIMANT SHOWS THAT ITS OWN EXPERIMENTS DEMONSTRATED THE INADEQUACY OF THE ACCEPTED FORMULA. A SUCCESSFUL PROCESS WAS THEREFORE FORESEEABLE AND DISCOVERABLE. AND IT WOULD SEEM TO HAVE BEEN AN OBVIOUS PRUDENCE TO HAVE PRECEDED MANUFACTURE, IF NOT ENGAGEMENT, BY EXPERIMENT RATHER THAN RISK FAILURE AND DELAY AND THEIR CONSEQUENT PENALTIES BY EXTENDING AN OLD FORMULA TO A NEW CONDITION.

SEE, ALSO, DAY V. UNITED STATES, 245 U.S. 159, 161, WHERE THE COURT SAID:

ONE WHO MAKES A CONTRACT NEVER CAN BE ABSOLUTELY CERTAIN THAT HE WILL BE ABLE TO PERFORM IT WHEN THE TIME COMES, AND THE VERY ESSENCE OF IT IS THAT HE TAKES THE RISK WITHIN THE LIMITS OF HIS UNDERTAKING. THE MODERN CASES MAY HAVE ABATED SOMEWHAT THE ABSOLUTENESS OF THE OLDER ONES IN DETERMINING THE SCOPE OF THE UNDERTAKING BY THE LITERAL MEANING OF THE WORDS ALONE. THE KRONPRINZESSIN CECILIE, 244 U.S. 12, 22. BUT WHEN THE SCOPE OF THE UNDERTAKING IS FIXED, THAT IS MERELY ANOTHER WAY OF SAYING THAT THE CONTRACTOR TAKES THE RISK OF THE OBSTACLES TO THAT EXTENT. * * *

THE BID SUBMITTED BY THE H. K. PORTER CO., INC., WAS AS INTENDED, AND THE FACT THAT THE CONTRACTOR MAY HAVE RELIED IN PREPARATION THEREOF ON INFORMATION FURNISHED BY ITS SUPPLIER'S REPRESENTATIVE, WHICH INFORMATION IS NOW ALLEGED TO HAVE PROVED ERRONEOUS, AFFORDS NO BASIS FOR RELIEF FROM THE OBLIGATION OF ITS CONTRACT. SEE 6 COMP. GEN. 504; 18 ID. 28.

FURTHERMORE, THE BID OF THE H. K. PORTER CO., INC., IS ACCOMPANIED BY A BID BOND IN THE AMOUNT OF $6,000, CONDITIONED AS FOLLOWS:

NOW, THEREFORE, IF THE PRINCIPAL SHALL NOT WITHDRAW SAID BID WITHIN THE PERIOD SPECIFIED THEREIN AFTER THE OPENING OF THE SAME, OR, IF NO PERIOD BE SPECIFIED, WITHIN SIXTY (60) DAYS AFTER SAID OPENING, AND SHALL WITHIN THE PERIOD SPECIFIED THEREFOR, OR, IF NO PERIOD BE SPECIFIED, WITHIN TEN (10) DAYS AFTER THE PRESCRIBED FORMS ARE PRESENTED TO HIM FOR SIGNATURE, ENTER INTO A WRITTEN CONTRACT WITH THE GOVERNMENT, IN ACCORDANCE WITH THE BID AS ACCEPTED, AND GIVE BOND WITH GOOD AND SUFFICIENT SURETY OR SURETIES, AS MAY BE REQUIRED, FOR THE FAITHFUL PERFORMANCE AND PROPER FULFILLMENT OF SUCH CONTRACT, OR IN THE EVENT OF THE WITHDRAWAL OF SAID BID WITHIN THE PERIOD SPECIFIED, OR THE FAILURE TO ENTER INTO SUCH CONTRACT AND GIVE SUCH BOND WITHIN THE TIME SPECIFIED, IF THE PRINCIPAL SHALL PAY THE GOVERNMENT THE DIFFERENCE BETWEEN THE AMOUNT SPECIFIED IN SAID BID AND THE AMOUNT FOR WHICH THE GOVERNMENT MAY PROCURE THE REQUIRED WORK AND/OR SUPPLIES, IF THE LATTER AMOUNT BE IN EXCESS OF THE FORMER, THEN THE ABOVE OBLIGATION SHALL BE VOID AND OF NO EFFECT, OTHERWISE TO REMAIN IN FULL FORCE AND VIRTUE.

IN THE CASE OF CRILLY V. BOARD OF EDUCATION, 54 ILL.APP. 371, THE PLAINTIFF, WHO HAD SUBMITTED A BID FOR THE ERECTION OF A BUILDING, ALLEGED THAT BY A CLERICAL ERROR HIS BID WAS $3,000 LESS THAN INTENDED AND REQUESTED RELIEF IN EQUITY IN THE FORM OF CORRECTION OF HIS BID AND RETURN OF THE DEPOSIT MADE IN CONNECTION THEREWITH. THE COURT REFUSED TO GRANT RELIEF, ON THE GROUND THAT IF A MISTAKE HAD BEEN MADE IT MIGHT EASILY HAVE BEEN AVOIDED BY THE EXERCISE OF ORDINARY CARE. IN BROWN V. LEVY, 29 TEX.CIV.APP. 389, 69 S.W. 255, RETURN OF A BID DEPOSIT ON A PLEA OF ERROR IN THE AMOUNT OF $10,000 IN ADDING THE ITEMS INVOLVED WAS LIKEWISE REFUSED, THE COURT HOLDING THAT VALIDITY OF THE CONTRACT WHICH AROSE ON ACCEPTANCE OF THE BIDDER'S OFFER WAS NOT AFFECTED BY THE FACT THAT THE BIDDER HAD MADE A MISCALCULATION IN HIS PRELIMINARY ESTIMATES.

THE CASE OF DADDARIO V. TOWN OF MILFORD, ------ MASS. ------, 5 N.E./2D) 23, 107 A.L.R. 1447, WAS A SUIT IN EQUITY TO COMPEL THE RETURN OF A CERTIFIED CHECK FOR $5,000 DEPOSITED WITH THE DEFENDANT TO ACCOMPANY A PROPOSAL FOR CONSTRUCTING A PUBLIC IMPROVEMENT FINANCED IN PART BY THE FEDERAL EMERGENCY ADMINISTRATION OF PUBLIC WORKS. THE PLAINTIFF HAD ATTEMPTED TO WITHDRAW HIS PROPOSAL ON THE DAY FOLLOWING THE OPENING OF THE BIDS, ON THE GROUND OF SERIOUS ERRORS IN TWO ITEMS, CONTRARY TO THE REQUIREMENTS OF THE INVITATION WHICH PROVIDED THAT NO BIDDER MIGHT WITHDRAW HIS BID FOR 30 DAYS AFTER THE DAY SET FOR THE OPENING THEREOF, AND HAD LATER FAILED TO EXECUTE CONTRACT AND BOND WITHIN 10 DAYS AFTER NOTICE OF AWARD, IN ACCORDANCE WITH THE TERMS OF THE PROPOSAL. THE COURT HELD THAT IN SO VIOLATING THE TERMS OF THE PROPOSAL HE HAD FORFEITED THE DEPOSIT, AND REFUSED TO GRANT THE RELIEF REQUESTED, DESPITE THE FACT THAT THE BOARD OF SEWER COMMISSIONERS OF THE TOWN HAD MADE AN UNAUTHORIZED AWARD TO THE NEXT HIGHER BIDDER BEFORE MAKING THE AWARD TO THE PLAINTIFF. SEE, ALSO, SCOTT V. UNITED STATES, 44 CT.CLS. 525; BALTIMORE V. J. L. ROBINSON CONSTRUCTION CO., 123 MD. 660, 91 ATL. 682, L.R.A. 1915A, 225, AND OTHER CASES CITED IN 15 COMP. GEN. 1049; 16 COMP. GEN. 98; 17 ID. 659.

ON THE FACTS DISCLOSED IN THIS CASE I AM UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER MUST BE PRESUMED TO HAVE ACCEPTED THE BID OF THE H. K. PORTER CO., INC., IN BAD FAITH, OR THAT THE CONTRACT RESULTING FROM THE ACCEPTANCE IS UNCONSCIONABLE. HENCE, THERE WOULD APPEAR NO BASIS ON WHICH THIS OFFICE MAY HOLD THAT THE ACCEPTANCE OF THE BID DID NOT GIVE RISE TO A CONTRACT LEGALLY BINDING ON THE BIDDER. UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88; UNITED STATES V. PURCELL ENVELOPE CO., 249 U.S. 313; AMERICAN SMELTING AND REFINING CO. V. UNITED STATES, 259 U.S. 75.

IN THE ABSENCE OF A STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER ANY RIGHT VESTED IN OR ACQUIRED BY THE GOVERNMENT UNDER A CONTRACT. SEE BRAWLY V. UNITED STATES, 96 U.S. 168; SIMPSON V. UNITED STATES, 172 U.S. 372; UNITED STATES V. AMERICAN SALES CO., 27 FED./2D) 389, AFFIRMED IN 32 FED./2D) 141, AND CERTIORARI DENIED, 280 U.S. 574. AS STATED BY THE COURT OF CLAIMS IN PACIFIC HARDWARE CO. V. UNITED STATES, 49 CT.CLS. 327, 335; "IT IS UNQUESTIONABLY TRUE THAT AN OFFICIAL OF THE GOVERNMENT IS NOT AUTHORIZED TO GIVE AWAY OR REMIT A CLAIM DUE THE GOVERNMENT. THIS RULE IS GROUNDED IN A SOUND PUBLIC POLICY AND IS NOT TO BE WEAKENED.' THE RULE IS APPLICABLE TO THE ACCOUNTING AS WELL AS THE ADMINISTRATIVE OFFICERS OF THE GOVERNMENT AND CONSIDERATIONS OF SYMPATHY FOR THE POSSIBLE MISFORTUNE OF A CONTRACTOR DO NOT AUTHORIZE THE WAIVING OF THE RULE.

ACCORDINGLY, THE OPINION OF YOUR DEPARTMENT THAT THE H. K. PORTER CO., INC., CANNOT LEGALLY BE RELIEVED FROM THE TERMS OF ITS BID APPEARS CORRECT, AND THIS OFFICE CANNOT AUTHORIZE RELEASING THE COMPANY FROM THE OBLIGATION IMPOSED UPON IT UNDER ITS ACCEPTED BID AND THE BID BOND.