B-144963, MAR. 7, 1961

B-144963, MAR. 7, 1961

TO OFFICE OF THE PUBLIC PRINTER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 1, 1961, REQUESTING A DECISION (1) AS TO THE PROPRIETY OF ASSESSING SOUTHWESTERN STAMP WORKS, OKLAHOMA CITY, OKLAHOMA, WITH EXCESS COST OF $497.20 DUE TO DEFAULT UNDER CONTRACT DATED JUNE 3, 1960, PURCHASE ORDER 21670, AND (2) AS TO THE DISPOSITION OF THE CLAIM OF PENN ARTS MANUFACTURING INC., PHILADELPHIA, PENNSYLVANIA, REPLACING CONTRACTOR, FOR AN ADDITIONAL $1,000 DUE TO AN ALLEGED MISTAKE IN BID.

YOUR INVITATION ON JACKET 544552 REQUESTED BIDS TO BE OPENED JUNE 1, 1960, ON 5,000 COPIES OF ,TUG BOAT HAND WHISTLE SIGNALS" TO BE PRINTED ON WHITE OPAQUE PLASTIC .03 INCH THICK WITH A PERMISSIBLE VARIATION OF .003 INCH. ON MAY 20, 1960, A NOTICE WAS SENT TO ALL BIDDERS AMENDING THE SPECIFICATIONS TO MORE COMPLETELY DESCRIBE THE OPAQUE PLASTIC AS FOLLOWS: "THE CONTRACTOR SHALL FURNISH OPAQUE POLISHED ACETATE, 0.03 INCH THICK PLUS OR MINUS 0.003 INCH. THE ACETATE SHEETS MUST BE NONFLAMMABLE SAFETY FILM TYPE (CELLULOSE ACETATE OR OTHER SUCH NONFLAMMABLE INGREDIENTS). THE SHEETS SHALL BE HEAT RESISTANT POSSESSING A HIGH RESISTANCE TO ABRASION, SALT WATER SPRAY, AND ALL TYPES OF WEATHER EXPOSURES AND CONDITIONS ENCOUNTERED ABOARD SHIPS.' THE AMENDMENT ADVISED ALL BIDDERS THAT IF THIS AFFECTED A BID ALREADY SUBMITTED, THE BID SHOULD BE AMENDED PRIOR TO THE OPENING TIME.

ON JUNE 3, 1960, AWARD WAS MADE TO SOUTHWESTERN STAMP WORKS ON ITS LOW BID OF $1,745. BY LETTER OF JUNE 22, 1960, THE CONTRACTOR ADVISED THAT A SAMPLE RECEIVED FROM THE GOVERNMENT PRINTING OFFICE WAS NOT IN ACCORD WITH THE SPECIFICATIONS, WHICH CALLED FOR ACETATE, WHEREAS THE SAMPLE WAS VINYL. THE GOVERNMENT NOTIFIED THE CONTRACTOR BY LETTER DATED JUNE 27, 1960, TO DISREGARD THE SAMPLE AND PRODUCE IN EXACT ACCORDANCE WITH SPECIFICATIONS. HOWEVER, THE SAMPLE SUBSEQUENTLY SUBMITTED BY THE CONTRACTOR FOR TESTING PRIOR TO PRODUCTION WAS FOUND TO BE .0052 INCH THICK, WHICH WAS APPROXIMATELY ONE-SIXTH OF THE REQUIRED THICKNESS. THE CONTRACTOR WAS NOTIFIED OF THIS DEFICIENCY, BUT DECLINED TO FURNISH MATERIAL MEETING THE SPECIFICATIONS, STATING THAT IT HAD BID ON MATERIAL .003 INSTEAD OF .03 INCH THICK, HAVING BEEN MISLED BY THE SPECIFICATIONS WHICH, CONTRARY TO TRADE USAGE, SHOWED .03 INSTEAD OF .030, AND THAT THE GOVERNMENT'S LETTER OF JUNE 27, 1960, WAS A REFORMATION OF THE ORDER.

BY LETTER OF AUGUST 19, 1960, THE CONTRACTOR WAS NOTIFIED THAT ITS RIGHT TO PROCEED WAS TERMINATED, AND THAT THE CHARTS WOULD BE PROCURED ELSEWHERE AND ANY EXCESS COST CHARGED TO ITS ACCOUNT. ELEVEN BIDS WERE RECEIVED IN RESPONSE TO THE READVERTISEMENT AND AWARD WAS MADE SEPTEMBER 12, 1960, BY PURCHASE ORDER NO. 5402 TO PENN ARTS MANUFACTURING INC., ON ITS LOW BID OF $2,242.20, RESULTING IN EXCESS COST OF $497.20. THE DEFAULTING CONTRACTOR REFUSED TO PAY THE EXCESS COST AND REQUESTED THAT THE MATTER BE APPEALED TO THE COMPTROLLER GENERAL OF THE UNITED STATES ALLEGING, IN ADDITION TO PREVIOUS OBJECTIONS, THAT THE SPECIFICATIONS UNDER THE READVERTISEMENT HAD BEEN CHANGED BY SUBSTITUTING TWO NEW PARAGRAPHS AT THE TOP OF PAGE 2, AND THAT ITS BID WAS SO LOW THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED AN ERROR.

SOUTHWESTERN'S CONTENTION THAT IT WAS MISLED INTO BIDDING ON MATERIAL .003 INSTEAD OF .03 INCH THICK OBVIOUSLY IS WITHOUT MERIT, BECAUSE THE PROVISION IN THE SPECIFICATIONS FOR A PLUS OR MINUS VARIATION OF .003 CLEARLY POINTS UP THE THICKNESS OF THE MATERIAL ITSELF. THIS WAS AGAIN EMPHASIZED TO ALL BIDDERS BY THE AMENDMENT OF MAY 20, 1960, WHICH DESCRIBES THE MATERIAL AS "0.03 INCH THICK PLUS OR MINUS 0.003 INCH.'

THE GOVERNMENT'S LETTER OF JUNE 27, 1960, ADVISING THE CONTRACTOR TO DISREGARD THE NONCONFORMING SAMPLE FORWARDED BY THE GOVERNMENT PRINTING OFFICE AND TO PRODUCE IN EXACT ACCORDANCE WITH THE SPECIFICATIONS WAS A CLARIFICATION AND IN NO SENSE CAN BE REGARDED AS A CHANGE OR A "REFORMATION" OF THE GOVERNMENT'S REQUIREMENTS. AS TO THE PURPORTED CHANGE IN THE SPECIFICATIONS AT THE TOP OF PAGE 2, THE READVERTISEMENT MERELY INSERTED THE AMENDMENT OF MAY 20, 1960, QUOTED ABOVE.

THE REMAINING QUESTION IS WHETHER THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN ON NOTICE OF AN ERROR. IN ORDER TO AUTHORIZE RELIEF BY REASON OF A MISTAKE IN AN ACCEPTED BID, THE MISTAKE MUST BE MUTUAL OR THE ERROR MUST BE SO APPARENT THAT IT MUST BE PRESUMED THE ACCEPTING OFFICER KNEW OF IT AT THE TIME OF ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE THEREOF. AMERICAN WATER SOFTENER COMPANY V. THE UNITED STATES, 50 CT.CL. 209; UNITED STATES V. CONTI, 119 F.2D 652. THERE WAS A WIDE RANGE OF BIDS HERE, BUT IT DOES NOT APPEAR THAT THE DIFFERENCE BETWEEN THE LOW BID OF $1,745 AND THE NEXT LOW BID OF $2,025 WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. SEE RUMLEY V. THE UNITED STATES, CT.CL.NO. 286-56, DATED JANUARY 18, 1961. FURTHERMORE THE CONTRACTING OFFICER HAS STATED THAT WHEN EXAMINING BIDS HE DID NOT NOTICE THE POSSIBILITY OF ERROR IN THE BID OF SOUTHWESTERN STAMP WORKS.

FROM THE FOREGOING IT SEEMS CLEAR THAT SUCH MISTAKE AS MAY HAVE BEEN MADE WAS DUE SOLELY TO THE BIDDER'S FAILURE TO NOTE THE CLEARLY STATED REQUIREMENTS OF THE SPECIFICATIONS, THAT THERE WAS NOTHING ON THE FACE OF THE BID FROM WHICH KNOWLEDGE ON THE PART OF THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE MAY BE PRESUMED, AND THAT THE ACCEPTANCE OF THE BID IN GOOD FAITH WITHOUT NOTICE OF THE ALLEGED MISTAKE, EITHER ACTUAL OR CONSTRUCTIVE, FORMED 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. SOUTHWESTERN STAMP WORKS IS THEREFORE LIABLE FOR EXCESS COST OCCASIONED BY ITS FAILURE TO PERFORM.

WITH REFERENCE TO THE ALLEGED ERROR IN THE REPLACEMENT BID OF PENNARTS MANUFACTURING INC., THE BIDDER HAS SUBMITTED A COPY OF AN ESTIMATE SHEET WHICH INDICATES THAT A FIGURE OF $1,700.30 WAS CARRIED FORWARD AS $700.30, RESULTING IN A DIFFERENCE OF $1,000. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON THE BIDDER (FRAZIER-DAVIS CONSTRUCTION COMPANY V. THE UNITED STATES, 100 CT.CL. 120, 163) AND ANY ERROR THAT MAY HAVE BEEN MADE, BEING DUE SOLELY TO THE ACTION OF THE BIDDER AND THEREFORE UNILATERAL, WOULD NOT JUSTIFY RELIEF. SEE OGDEN AND DOUGHERTY V. THE UNITED STATES, 102 CT.CL. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

AS TO POSSIBLE CONSTRUCTIVE NOTICE, SINCE THE DIFFERENCE BETWEEN THE LOW BID OF $2,242.20 AND THE NEXT LOW BID OF $2,540 WAS SO SMALL, THERE IS NO BASIS FOR CONCLUDING THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR.

ACCORDINGLY, IT MUST BE CONCLUDED THAT THE BID OF PENN ARTS MANUFACTURING INC., WAS ACCEPTED IN GOOD FAITH BY THE CONTRACTING OFFICER, THEREBY CONSUMMATING A VALID CONTRACT OBLIGATING THE BIDDER TO FURNISH THE CHARTS AT THE PRICE QUOTED, AND THERE IS NO LEGAL BASIS FOR THE PAYMENT OF ANY