B-139438, JAN. 18, 1960

B-139438, JAN. 18, 1960

TO THE LANE CONSTRUCTION COMPANY:

THE DEPARTMENT OF THE ARMY HAS FORWARDED TO OUR OFFICE YOUR LETTERS DATED JULY 13, 22, 29, AND OCTOBER 16, 1959, TOGETHER WITH COPIES OF TWO LETTERS DATED JULY 27 AND OCTOBER 10, 1959, FROM THE DOLE COMPANY'S COUNSEL, TO THE U.S. ARMY ENGINEER DIVISION, NEW ENGLAND, CORPS OF ENGINEERS. YOU REQUEST RECONSIDERATION OF OUR DECISION DATED MAY 25, 1959, TO THE SECRETARY OF THE ARMY, DISALLOWING YOUR PREVIOUS REQUEST FOR REFORMATION OF CONTRACT NO. DA-19-016-ENG-5824 ENTERED INTO BY YOU WITH THE DEPARTMENT OF THE ARMY UNDER DATE OF MAY 28, 1958, TO PERFORM CERTAIN CONSTRUCTION WORK AT THE LORING AIR FORCE BASE, LIMESTONE, MAINE.

THE BASIC FACTS AS THEY APPEAR IN THE RECORDS OF OUR OFFICE ARE AS FOLLOWS. IN RESPONSE TO THE INVITATION FOR BIDS WHICH WAS ISSUED BY THE U.S. ARMY ENGINEER DIVISION, NEW ENGLAND, YOU SUBMITTED A BID OFFERING TO PERFORM ALL OF THE WORK REQUIRED FOR AN ESTIMATED AGGREGATE CONSIDERATION OF $1,798,985.50. TWO OTHER BIDS IN RESPECTIVE AGGREGATE AMOUNTS OF $1,897,442 AND $2,027,499,90 WERE ALSO RECEIVED, AND THE GOVERNMENT'S ESTIMATED AGGREGATE FOR THE PROJECT WAS $1,939,136. YOUR BID OF $1,798,985.50 FOR THE ENTIRE CONSTRUCTION JOB WAS THE LOWEST BID RECEIVED AND WAS ACCEPTED AND AWARD WAS MADE TO YOU ON MAY 28, 1958. THEREAFTER, BY LETTER DATED JUNE 25, 1958, THE DOLE COMPANY, YOUR SUBCONTRACTOR, ADVISED YOU THAT ITS QUOTATION TO YOU DATED MAY 21, 1958, OF $225 ON ITEM ITEM NO. II-41 OF THE INVITATION FOR "REMOVAL AND RELOCATION OF POWER INES" WAS IN ERROR AS IT DID NOT INCLUDE THEREIN ANY CHARGE FOR THE WORK INVOLVED IN REMOVING AND REPLACING 31 POLES WHICH WAS CALLED FOR. THE COMPANY'S EXPLANATION FOR THIS OMISSION WAS THAT IT OVERLOOKED DRAWINGS AW -86-01-25, SHEETS 20, 21, AND 22, WHEN IT ESTIMATED ITS QUOTATION TO YOU. THE DOLE COMPANY, ON JUNE 30, 1958, SUBMITTED TO YOU A CORRECTED BID PRICE OF $8,956.42 FOR ITEM NO. II-41 AS REPRESENTING ITS COST, WITH NO OVERHEAD OR PROFIT, FOR THE WORK OF REMOVING AND RELOCATING POWER LINES, AND REQUESTED THAT YOU INTERVENE WITH THE CORPS OF ENGINEERS AND ASK FOR AN ADDITIONAL AMOUNT TO THE PRICE CONTRACT TO COVER ITS ERROR. YOUR SUBSEQUENT REQUEST TO THE CONTRACTING OFFICER FOR AN INCREASE IN THE CONTRACT PRICE, BASED ON THE ERROR, AS ALLEGED BY THE DOLE COMPANY, ON ITEM NO. II-41 OF THE INVITATION AND AS CARRIED FORWARD INTO YOUR BID, WAS FORWARDED TO OUR OFFICE FOR CONSIDERATION AND WAS DISALLOWED BY OUR DECISION OF MAY 25, 1959, FOR THE REASONS SET FORTH THEREIN. IT IS NOTED THAT A COPY OF THAT DECISION WAS FORWARDED TO YOU BY LETTER DATED JUNE 26, 1959, FROM THE AREA ENGINEER.

IN REQUESTING RECONSIDERATION OF THE MATTER, YOU PRESENT NO NEW FACTS FOR CONSIDERATION BUT CONTEND THAT THE ALLEGED ERROR IN YOUR BID AS TO ITEM NO. II-41 SHOULD HAVE BEEN NOTICED BY THE CONTRACTING OFFICER UPON A COMPARISON OF THE BID ITEMS AT THE TIME ALL BIDS FOR THE CONSTRUCTION JOB WERE EVALUATED AND PRIOR TO HIS ACCEPTANCE OF YOUR BID AND AWARD OF THE CONTRACT, AND THAT THE LAW APPLICABLE IN SUCH CIRCUMSTANCES WARRANTS THE RELIEF REQUESTED AND, FURTHER, BECAUSE IT WOULD BE UNCONSCIONABLE TO PERMIT THE GOVERNMENT TO PROFIT BY THIS SITUATION.

WHILE THE BID INVITATION, PURSUANT TO WHICH YOU SUBMITTED YOUR BID ON WHICH CONTRACT NO. DA-19-016-ENG-5824 WAS BASED, REQUIRED THAT UNIT PRICES FOR THE VARIOUS ITEMS LISTED SHOULD BE ENTERED ON THE BID, IT ALSO PROVIDED THAT THE CONTRACT WOULD BE AWARDED TO THE SINGLE BIDDER WHO SUBMITTED THE LOWEST AGGREGATE BID FOR THE ENTIRE CONSTRUCTION JOB. DOES NOT APPEAR THAT THE DIFFERENCE BETWEEN YOUR AGGREGATE "JOB" BID AND THE OTHER "JOB" BIDS WAS SO GREAT THAT IT MUST BE CONCLUDED THAT THE CONTRACTING OFFICER SHOULD BE CHARGED WITH NOTICE OF THE PROBABILITY OF A MISTAKE IN YOUR BID AND, IN ACCEPTING THE BID, SOUGHT TO TAKE ADVANTAGE THEREOF. WHILE THERE WAS A GREAT DIFFERENCE BETWEEN YOUR BID AND THE OTHER BIDS ON ITEM NO. II-41, THE ABSTRACT OF BIDS DISCLOSES VARIATIONS IN PRICES SUBMITTED BY THE BIDDERS ON MANY ITEMS AS HIGH AS 100 PERCENT AND, ON ONE ITEM, OF APPROXIMATELY 800 PERCENT. BUT, THE DIFFERENCE BETWEEN YOUR BID AND THE OTHER BIDS ON ITEM NO. II-41 IS NOT CONTROLLING SINCE IT APPEARS THAT THE CONTRACTING OFFICER DID NOT IN FACT NOTICE THE DIFFERENCE AND WE HAVE HELD THAT HE IS UNDER NO DUTY TO COMPARE PRICES, ITEM BY ITEM, WHERE BIDS HAVE BEEN REQUESTED, FOR PURPOSES OF AWARD, IN THE AGGREGATE. SEE 17 COMP. GEN. 534. SINCE NONE OF THE CASES CITED BY YOUR ATTORNEYS DEAL WITH MISTAKES IN A SINGLE ITEM IN A MULTIPLE ITEM BID, AS HERE, WE DO NOT THINK THEY ARE APPLICABLE TO THE PRESENT MATTER.

ACCORDINGLY, AND SINCE YOUR BID WAS REGULAR ON ITS FACE AND SINCE NO ERROR WAS ALLEGED BY YOU UNTIL SOMETIME AFTER THE AWARD OF THE CONTRACT IN QUESTION, THE ACCEPTANCE OF YOUR BID BY THE CONTRACTING OFFICER, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, MUST BE HELD TO HAVE BEEN MADE IN GOOD FAITH. SUCH ACCEPTANCE, THEREFORE, RESULTED IN A VALID AND BINDING CONTRACT, WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER OR AGENT OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELEASE. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

WITH REFERENCE TO THE CONTENTION THAT IT WOULD BE UNCONSCIONABLE TO PERMIT THE GOVERNMENT TO PROFIT BY THE SITUATION HERE, CAUSED BY THE UNILATERAL MISTAKE OF YOUR SUBCONTRACTOR AND YOURSELF IN THE PREPARATION OF YOUR BID, IT DOES NOT APPEAR THAT THE AMOUNT OF $8,731.42, WHICH REPRESENTS THE DIFFERENCE BETWEEN THE AMOUNT OF $8,956.42 GIVEN AS THE DOLE COMPANY'S REVISED PRICE AND $225, ITS ORIGINAL QUOTATION TO YOU ON ITEM NO. II-41, WHEN COMPARED WITH THE OVER-ALL TOTAL CONTRACT PRICE OF $1,798,985.50, IS SO GREAT THAT IT WOULD REQUIRE SUCH A CONCLUSION.

FOR THESE REASONS WE FIND NO JUSTIFICATION FOR ANY DEPARTURE FROM THE CONCLUSION REACHED IN OUR DECISION OF MAY 25, 1959, AND IT IS AFFIRMED.