B-134378, DEC. 6, 1957

B-134378, DEC. 6, 1957

TO SOUTHWESTERN STAMP WORKS:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 29, 1957, INQUIRING WHETHER AN AFFIDAVIT FROM THE AIR FORCE "BUYER" TO THE EFFECT THAT YOUR ORAL PRICE QUOTATION, ON WHICH PURCHASE ORDER NO. (16-605/-55-2679 DATED DECEMBER 16, 1954, WAS BASED, WAS $0.12 PER UNIT RATHER THAN $0.012, WOULD HELP TO ESTABLISH YOUR CLAIM FOR $1,080, THE DIFFERENCE BETWEEN YOUR INTENDED PRICE AND THE CONTRACT PRICE.

THE PURCHASE ORDER, DATED DECEMBER 16, 1954, PURPORTS TO BE BASED ON YOUR ORAL PRICE QUOTATION OF $0.012 PER UNIT FOR 10,000 STRAP-BADGE FASTENERS AND $0.069 PER UNIT FOR 10,000 CLIP-BADGE FASTENERS. THE PROCURING AGENCY HAS REPORTED THAT THE CONTRACTING OFFICE HAD NEVER PURCHASED THE SUBJECT ITEMS BEFORE BUT CONSIDERED THE QUOTED PRICES TO BE FAIR AND REASONABLE. INASMUCH AS THE OVERALL PRICE WAS $810 THE SUBJECT PURCHASE ORDER WAS ISSUED UNDER THE NEGOTIATING AUTHORITY. IF THE AGGREGATE AMOUNT OF THE ORDER HAD EXCEEDED $1,000, AS IT WOULD IF THE PRICE HAD BEEN $0.12 PER UNIT, THE CONTRACTING OFFICER WOULD HAVE BEEN WITHOUT AUTHORITY TO ISSUE THE ORDER AND WOULD HAVE BEEN REQUIRED TO SOLICIT BIDS BY FORMAL ADVERTISING.

THE SUBJECT ITEMS WERE DELIVERED ON FEBRUARY 4, 1955. YOUR INVOICE AT THE PRICE SPECIFIED IN THE ORDER, WAS RECEIVED ON APRIL 8, 1955, AND YOU WERE PAID ON APRIL 15, 1955. ON JULY 31, 1956, YOU FOR THE FIRST TIME ALLEGED AN ERROR IN THE CONTRACT PRICE.

A PURCHASE ORDER IS NOT A CONTRACT, BUT MERELY AN OFFER TO BUY AT THE TERMS SET FORTH IN THE ORDER. THE SELLER IS UNDER NO OBLIGATION TO ACCEPT, BUT THE DELIVERY OF THE GOODS IN COMPLIANCE WITH THE ORDER MANIFESTS AN ACCEPTANCE WHICH CONSUMMATES A CONTRACT. SEE 36 COMP. GEN. 191, 192 AND B-130458, DATED JUNE 10, 1957.

YOU ALLEGE THAT YOU QUOTED A PRICE OF $0.12 INSTEAD OF $0.012 PER UNIT FOR THE STRAP-BADGE FASTENERS AND THAT THE CONTRACTING OFFICER MADE AN ERROR IN PLACING THE DECIMAL POINT WHEN HE PREPARED THE PURCHASE ORDER. YOUR REQUEST TO INCREASE THE CONTRACT PRICE IN THE AMOUNT OF $1,080 AMOUNTS TO A REQUEST FOR REFORMATION OF THE CONTRACT ON THE BASIS OF MUTUAL MISTAKE.

WHERE THE PARTIES TO A CONTRACT HAVE AGREED UPON ALL ITS TERMS, BUT THE WRITING ADOPTED TO EXPRESS THE CONTRACT CONTAINS AN ERRONEOUS STATEMENT OF ONE OF THE TERMS ON WHICH THEY HAVE AGREED, THE WRITING MAY BE REFORMED TO EXPRESS THE ACTUAL INTENT. HERE, HOWEVER, NO AGREEMENT HAD BEEN ARRIVED AT BETWEEN THE PARTIES UNTIL DELIVERY OF THE GOODS. PRIOR TO THE DELIVERY THERE WAS NO CONTRACT TO BE AFFECTED BY THE MISTAKE, AND THE DELIVERY WAS AN ACCEPTANCE OF THE TERMS OF THE ORDER, WHICH WERE CLEARLY EXPRESSED.

EVEN IF WE HAD A SWORN STATEMENT FROM THE CONTRACTING OFFICER WHO ISSUED THE SUBJECT PURCHASE ORDER THAT HE INTENDED A PRICE OF $0.12 INSTEAD OF $0.012 PER UNIT, THERE WOULD BE SERIOUS AND SUBSTANTIAL DOUBT THAT HE HAD INTENDED TO PROPOSE OR AGREE TO ANY TERMS OTHER THAN THOSE CONTAINED IN THE WRITTEN CONTRACT, INASMUCH AS THE OVERALL PRICE OF THE ORDER WOULD HAVE BEEN $1,890 INSTEAD OF $810, AND HE WOULD THEREFORE HAVE BEEN WITHOUT AUTHORITY TO ISSUE THE PURCHASE ORDER.