B-128735, AUG. 7, 1956

B-128735, AUG. 7, 1956

TO THE SECRETARY OF THE INTERIOR:

A LETTER DATED JULY 25, 1956, HAS BEEN RECEIVED FROM MR. CONRAD L. WIRTH, DIRECTOR, NATIONAL PARK SERVICE, REQUESTING A DECISION AS TO WHETHER THE CONTRACTING OFFICER FOR REGION TWO, NATIONAL PARK SERVICE, OMAHA, NEBRASKA, MAY CONSIDER A PROPOSED AMENDMENT TO CONTRACT NO. 14 10-232-150, DATED JUNE 5, 1956, WITH CARLSON CONSTRUCTION, NEWCASTLE, WYOMING, DESIGNED TO CORRECT CERTAIN ERRORS ALLEGED TO HAVE BEEN MADE THEREIN.

FROM THE FACTS REPORTED IN THE MATTER, IT APPEARS THAT INVITATIONS WERE ISSUED TO 14 PROSPECTIVE BIDDERS ON THE ADVERTISED WORK OF CONSTRUCTION OF THREE RESIDENCES AT DEVILS TOWER NATIONAL MONUMENT. AT THE OPENING OF THE BIDS ON MAY 28, 1956, IT WAS DISCOVERED THAT ONLY FIVE OF THE BIDDERS CONTACTED HAD SUBMITTED PROPOSALS FOR THE WORK, THE LOWEST OF WHICH WAS THE BID OF MR. LOUIS W. CARLSON, OPERATING UNDER THE TRADE NAME OF CARLSON CONSTRUCTION. HIS TOTAL BID PRICE FOR THE JOB WAS $48,385, WHICH WAS $13,271 LOWER THAN THE AMOUNT OF THE NEXT HIGHER BID. BY LETTER OF JUNE 5, 1956, MR. CARLSON WAS NOTIFIED THAT HE, BEING THE LOW BIDDER, HAD BEEN AWARDED THE CONTRACT, THE ORIGINAL OF WHICH WAS MAILED TO HIM FOR FINAL EXECUTION.

ON JUNE 15, 1956, MR. CARLSON NOTIFIED THE CONTRACTING AGENCY BY TELEPHONE THAT HE HAD MADE SEVERAL SERIOUS ERRORS IN HIS BID, IN VIEW OF WHICH HE REQUESTED THAT HIS PROPOSAL BE WITHDRAWN. THE ALLEGED MISTAKES CONSISTED PRINCIPALLY OF ERRORS OF OMISSION, SUCH AS FAILURE TO INCLUDE THE FOUNDATION WORK ON THE THREE STRUCTURES COSTING AN ESTIMATED $3,600; ELIMINATION OF THE ELECTRICAL WORK ESTIMATED AT $600 PER RESIDENCE, OR A TOTAL OF $1,800; AND CERTAIN LUMBER AND OTHER ESSENTIAL CONSTRUCTION MATERIALS VALUED AT $1,000 PER STRUCTURE, OR $3,000, MAKING THE TOTAL OF THE OMITTED ITEMS APPROXIMATELY $8,400.

THE CONTRACTING AGENCY DENIED MR. CARLSON'S REQUEST TO WITHDRAW HIS BID, BUT EXPLAINED TO HIM THAT HE WAS FREE TO FILE A PROTEST PLEADING "MECHANICAL ERROR.' IN A LETTER DATED JUNE 24, 1956, MR. CARLSON ADVISED THE CONTRACTING AGENCY THAT HE HAD EXECUTED CONTRACT NO. 14-10 232-150, DATED JUNE 5, 1956, BUT UNDER PROTEST. HE EXPLAINED THAT HE FIRST DISCOVERED THE ERRORS WHEN ARRANGING WITH HIS BANK FOR THE REQUIRED BONDS AND WHILE COMPARING HIS BREAKDOWN OF ESTIMATED COSTS WITH THOSE OF ANOTHER BIDDER.

IN COMMENTING ON MR. CARLSON'S REQUEST THAT HIS BID EITHER BE WITHDRAWN OR CORRECTED, THE CONTRACTING OFFICER HAS STATED THAT THE ALLEGED ERRORS WERE THE DIRECT RESULT OF THE BIDDER'S NEGLIGENCE AND OVERSIGHT. FURTHER STATED THAT HE HAD NO REASON TO SUSPECT ERROR SINCE "HOUSES OF SIMILAR SIZE AND PLAN AT GRAND TETON NATIONAL PARK, WYOMING, WERE RECENTLY BID AT ABOUT THE SAME AMOUNT AS CARLSON CONSTRUCTION'S BID.' THE SAID OFFICER FURTHER STATED THAT, "THE SPECIFICATIONS ARE DEFINITE AND CLEAR.'

BEFORE ANSWERING YOUR INQUIRY, IT IS DEEMED PERTINENT TO NOTE THAT THE PAPERS WHICH ACCOMPANIED THE DIRECTOR'S SUBMISSION OF JULY 25 DO NOT INCLUDE SUCH PERTINENT DOCUMENTS AS THE INVITATION FOR BIDS, THE SPECIFICATIONS, THE GOVERNMENT'S COST ESTIMATE, AND THE ABSTRACT OF BIDS, WHICH DOCUMENTS WOULD BE OF CONSIDERABLE HELP IN ATTEMPTING TO RESPOND PROPERLY TO THE ISSUE PRESENTED. HOWEVER, FROM SUCH FACTS AS ARE AVAILABLE YOU ARE ADVISED CONCERNING MR. CARLSON'S REQUEST TO WITHDRAW HIS BID THAT PROPOSALS SUBMITTED IN RESPONSE TO GOVERNMENT ADVERTISEMENTS MAY NOT BE WITHDRAWN AFTER THE BIDS HAVE BEEN OPENED, EVEN BEFORE THE AWARD IS MADE, AND THE BIDDER IS LEGALLY BOUND BY ACCEPTANCE OF THE BID, IN THE ABSENCE OF ACTUAL OR CONSTRUCTIVE NOTICE AT THE TIME OF AWARD OF MISTAKE OR OTHER CIRCUMSTANCES WHICH WOULD MAKE ACCEPTANCE INEQUITABLE. SEE REFINING ASSOCIATES V. UNITED STATES, 124 C.CLS. 115. THE RULE IS EQUALLY WELL SETTLED THAT A REVOCATION OR WITHDRAWAL, TO BE EFFECTIVE, MUST REACH THE PARTY TO WHOM ADDRESSED BEFORE HIS ACCEPTANCE OF THE ORIGINAL OFFER TAKES EFFECT. SEE TAYLOE V. MERCHANTS FIRE INSURANCE COMPANY, 9 HOW. 390; PATRICK V. BOWMAN, 149 U.S. 411; BURTON V. UNITED STATES, 202 ID. 344. HERE, THE RECORD AFFIRMATIVELY SHOWS THAT THE GOVERNMENT WAS NOT NOTIFIED BY MR. CARLSON OF THE ALLEGED ERRORS OF OMISSION UNTIL JUNE 15, 1956, OR 10 DAYS AFTER THE ACCEPTANCE OF HIS PROPOSAL ON JUNE 5. SINCE THE RECORD ALSO ESTABLISHES THAT THE ACCEPTANCE OF MR. CARLSON'S PROPOSAL WAS MADE IN ENTIRE GOOD FAITH AND WITHOUT NOTICE, CONSTRUCTIVE OR ACTUAL, OF THE ERRORS ALLEGED, SUCH ACCEPTANCE CONSTITUTED A VALID AND BINDING CONTRACT ESTABLISHING THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 ID. 75. IN THE CIRCUMSTANCES, THE ATTEMPTED WITHDRAWAL BY MR. CARLSON OF HIS PROPOSAL WAS INEFFECTUAL.

CONCERNING THE BIDDER'S ATTEMPT TO AMEND HIS CONTRACT SO AS TO REFLECT A CORRECTION OF THE ERRORS ALLEGED, THE RECORD CONCLUSIVELY SHOWS THAT THE CONTRACTING OFFICER HAD NO KNOWLEDGE OF SUCH ERRORS EITHER AT THE TIME OF OPENING OF THE BIDS OR WHEN THE AWARD WAS MADE ON JUNE 5, 1956. FURTHERMORE, THE RECORD CLEARLY INDICATES THAT SUCH ERRORS AS WERE MADE WERE ATTRIBUTABLE SOLELY TO THE BIDDER'S OWN "NEGLIGENCE AND OVERSIGHT.' THE COURTS HAVE HELD THAT 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 C.CLS. 120, 160. IT IS EQUALLY WELL SETTLED THAT A MUTUAL ERROR--- NOT UNILATERAL, AS HERE--- AFFORDS THE ONLY LEGAL JUSTIFICATION FOR THE REFORMATION OF A CONTRACT. SEE OGDEN AND DOUGHTERTY V. UNITED STATES, 102 C.CLS. 249; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

SINCE THE FACTS AS REPORTED IN THIS MATTER CLEARLY SHOW THAT THE ERRORS OF OMISSION ALLEGED BY THE BIDDER WERE UNILATERAL INCHARACTER--- NOT MUTUAL AND THUS SUBJECT TO CORRECTION--- YOU ARE ADVISED THAT THERE EXISTS NO LEGAL BASIS UPON WHICH CONTRACT NO. 14-10-232-150, DATED JUNE 5, 1956, MAY BE REFORMED.