B-130323, FEB. 15, 1957

B-130323, FEB. 15, 1957

TO FRANKLIN METAL AND RUBBER COMPANY:

REFERENCE IS MADE TO YOUR LETTER DATED DECEMBER 7, 1956, WHEREIN YOU REQUEST RECONSIDERATION OF THE DISALLOWANCE OF YOUR CLAIM FOR $949.90 ALLEGED TO BE DUE BY REASON OF A MISTAKE IN THE SUBMISSION OF YOUR BID IN CONNECTION WITH CONTRACT NO. DA-28-024-ORD-4093, DATED MAY 23, 1955.

IN RESPONSE TO INVITATION NO. ORD-28-024-55-322, DATED APRIL 11, 1955, YOU SUBMITTED A BID ON APRIL 22, 1955, IN THE AMOUNT OF $0.13 PER UNIT TO FURNISH ITEM 3 COVERING 16,100 BALL SLEEVE COMPRESSION TUBE CONNECTORS. THE UNIT PRICE OFFERS OF THE TWO OTHER BIDDERS WERE $0.1899 AND $0.2365. ON MAY 6, 1955, CARL S. HEDSTRON, INDUSTRIAL SPECIALIST, EXECUTED A PRE- AWARD SURVEY FORM WHICH DISCLOSED, AMONG OTHER MATTERS, THAT THE UNIT PRICE OF $0.13 WAS DISCUSSED WITH THE MANAGEMENT OF YOUR COMPANY AND HE REPORTED THAT "IT WAS FOUND TO CONCUR WITH THE BID QUOTATION.' IN THE "PRICE ANALYST'S REVIEW AND FINDINGS," DATED MAY 6, 1955, IT WAS REPORTED THAT THERE WAS NO PREVIOUS PRICE HISTORY FOR ITEM 3, BUT THAT THE LOW BID WAS IN LINE WITH THE PRICE OBTAINED FOR ITEM 2 CONSIDERING THAT IT IS THE SAME ITEM EXCEPT FOR A DIFFERENCE IN SIZE. IN VIEW OF THESE CIRCUMSTANCES, THE PRICE ANALYST CONSIDERED YOUR BID REASONABLE AND RECOMMENDED AWARD TO YOU WHICH WAS MADE ON MAY 23, 1955.

IN YOUR LETTER DATED MAY 31, 1955, YOU ALLEGED THAT YOUR BID WAS ERRONEOUS SINCE YOU HAD BID ON THE CONNECTOR ONLY AND NOT ON THE COMPLETE ASSEMBLY. IN YOUR SUBSEQUENT LETTER OF JUNE 15, 1955, YOU ALLEGED THAT YOU WERE ADVISED THAT YOU WOULD BE AFFORDED RELIEF AND THAT THE PRE-AWARD SURVEY WAS MERELY A ROUTINE MATTER AND WAS CONSUMMATED IN FIVE MINUTES. YOU DELIVERED THE SUPPLIES AND ON JUNE 8, 1956, YOU FILED A CLAIM FOR $949.90 ALLEGED TO BE DUE BECAUSE OF THE ERROR IN YOUR BID. TRANSMITTING THE CLAIM TO OUR OFFICE, THE CONTRACTING OFFICER IN A STATEMENT DATED JULY 9, 1956, RECOMMENDED THAT IT BE DISALLOWED SINCE THERE WAS NO CONSTRUCTIVE NOTICE OF A MISTAKE IN BID. HIS OPINION IS BASED ON THE FACT THAT THE THREE BIDS ON ITEM 3 SHOW A DIFFERENCE OF $0.0466 EACH BETWEEN THE SECOND AND THIRD LOWEST BIDDERS AND A DIFFERENCE OF $0.0599 EACH BETWEEN THE LOWEST AND SECOND LOWEST BIDDER. ACCORDING TO THE CONTRACTING OFFICER THIS VARIATION OF BID PRICES IS CONSIDERED NORMAL FOR ITEMS OF THIS NATURE.

ON NOVEMBER 30, 1956, OUR CLAIMS DIVISION DISALLOWED YOUR CLAIM. IN YOUR LETTER OF DECEMBER 7, 1956, REQUESTING REVIEW, YOU CONTEND, FIRST, THAT THE CONTRACTING OFFICER HAS PURCHASED THE SAME ITEM ON MANY DIFFERENT OCCASIONS; SECOND, THAT THE ALLEGED ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW THAT A MISTAKE HAD BEEN MADE AND SOUGHT TO TAKE ADVANTAGE OF IT; AND, THIRD, THAT A PRE-AWARD SURVEY WAS NOT MADE.

REGARDING YOUR FIRST CONTENTION, AS STATED HEREINABOVE, THERE IS NO EVIDENCE TO SHOW THAT THE CONTRACTING OFFICER HAS PURCHASED THE SAME ITEM BEFORE BUT ON THE CONTRARY THE PRICE ANALYST HAS REPORTED THAT THERE WAS "NO PREVIOUS PRICE HISTORY" FOR ITEM 3.

AS TO YOUR CONTENTION THAT NO PRE-AWARD WAS MADE, IN ADDITION TO THE REFERRED-TO REPORT ON THE PRE-AWARD SURVEY, THERE IS ON RECORD A CERTIFIED STATEMENT FROM CARL S. HEDSTRON, DATED SEPTEMBER 25, 1956, THAT, IN CONNECTION WITH THE PRE-AWARD SURVEY, HE INTERVIEWED YOU FOR APPROXIMATELY 1 1/2 TO 2 HOURS. IN THE COURSE OF THE PRE-AWARD SURVEY INTERVIEW YOU ARE REPORTED TO HAVE VERIFIED YOUR BID PRICE. THE RULE IS ESTABLISHED THAT WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALIDAND BINDING CONTRACT. SEE 18 COMP. GEN. 492 AND 27 ID. 17. IT MIGHT BE ADDED, HOWEVER, THAT THE PRIMARY PURPOSE OF A PRE-AWARD SURVEY IS TO PROTECT THE INTERESTS OF THE GOVERNMENT BY ELIMINATING AWARDS OF CONTRACTS TO PARTIES WHOSE ABILITY TO DELIVERY MAY BE QUESTIONED.

REGARDING YOUR SECOND CONTENTION AND ASSUMING ARGUENDO THAT YOUR BID PRICE WAS NOT VERIFIED, THE FACTS ON RECORD FORCE THE SAME CONCLUSION AS REACHED ABOVE. THE RECORD ESTABLISHES CLEARLY THAT THE CONTRACTING OFFICER HAD NEITHER APPARENT NOR CONSTRUCTIVE NOTICE OF ANY ERROR AND THAT HE ACTED ON THE ADVICE OF A PRICE ANALYST AND HIS OWN JUDGMENT WHICH INDICATED TO HIM THAT THE VARIATION OF BID PRICES FOR THE ITEM IN QUESTION WAS NORMAL.

SUCH MISTAKE AS WAS MADE WAS DUE TO YOUR OWN NEGLIGENCE, CARELESSNESS OR OVERSIGHT; IT WAS NOT INDUCED BY THE GOVERNMENT; AND THERE WAS NOTHING TO MAKE THE CONTRACTING OFFICER SUSPECT THAT THE QUOTATION WAS NOT MADE AS INTENDED. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61. THEREFORE, SINCE NO ERROR WAS ALLEGED UNTIL AFTER AWARD, THE ACCEPTANCE WAS MADE IN GOOD FAITH AND 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. A BIDDER IS NOT ENTITLED TO ANY REDRESS FOR THE CONSEQUENCES OF ITS UNILATERAL MISTAKE. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN, ET AL. V. UNITED STATES, 59 F.SUPP. 505, 507. ..END :