B-127523, APR. 19, 1956

B-127523, APR. 19, 1956

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED APRIL 6, 1956, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR THE INDUSTRIAL TOOL AND SUPPLY COMPANY, TUCSON, ARIZONA, ALLEGES IT MADE IN ITS BID DATED SEPTEMBER 16, 1955, ON WHICH CONTRACT NO. 1720-AEPG-56 DATED SEPTEMBER 26, 1955, WAS AWARDED.

BY INVITATION NO. SC-02-086-56-10, ISSUED ON SEPTEMBER 2, 1955, THE PURCHASING AND CONTRACTING OFFICE, FORT HUACHUCA, ARIZONA, REQUESTED BIDS, TO BE OPENED SEPTEMBER 22, 1955, FOR FURNISHING EIGHT ITEMS OF SHEET METAL WORKING MACHINERY. IN RESPONSE TO THE INVITATION THE INDUSTRIAL TOOL AND SUPPLY COMPANY OFFERED TO FURNISH, AMONG OTHERS, ITEMS 1, 2, 3 AND 5. THE BID OF THE COMPANY WAS ACCEPTED AS TO THOSE ITEMS ON SEPTEMBER 26, 1955, FOR A TOTAL CONTRACT PRICE OF $1,964.08.

BY LETTER DATED DECEMBER 30, 1955, AFTER DELIVERY HAD BEEN MADE OF ALL BUT ONE OF THE CONTRACT ITEMS, THE COMPANY ALLEGED ERROR IN ITS BID IN THAT THE PRICES QUOTED WERE IN THE PROCESS OF BEING CHANGED BY THE MANUFACTURERS AT THE TIME OF ITS BID, AS A RESULT OF WHICH IT STATED THAT IT SUFFERED A NET LOSS OF $299.43 ON THIS ORDER. THE COMPANY SUBMITTED WITH ITS LETTER A BREAKDOWN SHOWING THE NET COST, ITS SELLING PRICE, AND NET LOSS ON EACH ITEM. THE CONTRACTING OFFICER RECOMMENDS THAT THE CLAIM OF THE CONTRACTOR BE DISALLOWED SINCE THE ALLEGED MISTAKE WAS MERELY AN ERROR IN JUDGMENT IN ESTIMATING COSTS AND THE MISTAKE WAS NOT CLAIMED UNTIL AFTER THE CONTRACT HAD BEEN AWARDED AND PARTIALLY PERFORMED.

THE ABSTRACT OF BIDS SHOWS THAT THE AGGREGATE AMOUNT OF THE FIVE OTHER BIDS RECEIVED FOR ITEMS 1, 2, 3 AND 5 RANGED FROM $2,388 TO $2,494.29. THE DIFFERENCE BETWEEN THE BID OF THE INDUSTRIAL TOOL AND SUPPLY COMPANY OF $1,964.08 AND THE OTHER BIDS RECEIVED DOES NOT APPEAR TO HAVE BEEN SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY. ALTHOUGH, AFTER AWARD, THE COMPANY FURNISHED CERTAIN DATA IN SUPPORT OF ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE FACTORS USED BY THE COMPANY IN COMPUTING ITS BID PRICES. SO FAR AS THE PRESENT RECORD SHOWS THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE COMPANY UNTIL AFTER AWARD--- AND, THEREFORE, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, NO ERROR OF A KIND FOR WHICH RELIEF MAY BE GRANTED APPEARS TO HAVE BEEN MADE BY THE CONTRACTOR, ITS BID HAVING BEEN IN THE AMOUNT INTENDED AT THE TIME OF ITS SUBMISSION. THE FACT THAT AT THE TIME OF ITS QUOTATION THE CONTRACTOR FAILED TO CONSIDER THAT THE PRICES OF THE INVOLVED ITEMS WERE IN THE PROCESS OF BEING CHANGED BY THE MANUFACTURERS, IS AN ERROR OR OMISSION WHICH WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT, AND BY SUBMITTING ITS BID WITHOUT HAVING OBTAINED BINDING COMMITMENTS FROM ITS SUPPLIERS IT ASSUMED ALL RISK OF PRICE CHANGES. SUCH ERROR AS WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. ALSO, SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

ACCORDINGLY, ON THE BASIS OF THE PRESENT RECORD, THERE APPEARS TO BE NO LEGAL BASIS FOR GRANTING THE RELIEF REQUESTED BY THE INDUSTRIAL TOOL AND SUPPLY COMPANY.