Request for Reformation of Contract Modification

The Consumer Product Safety Commission (CPSC) issued a request for proposals for the planning and development of a nationwide public service advertising campaign on product safety awareness and education. The contract was a cost-plus-fixed-fee type contract. During the course of performance, six modifications were executed to reflect changes to the original requirements. The alleged mistake which formed the basis for the contractor's claim occurred during the negotiations for modification No. 6, which was to establish a new ceiling amount for the entire contract. The claimant maintained that two cost categories necessary for the performance of the contract were inadvertently omitted. The first item was for the cost of a research tracking study performed by a subcontractor and the other item omitted was for talent and travel expense costs. The contractor claimed that these costs had been approved by CPSC and were left out of the negotiations because both parties were unaware that the contracting firm had failed to include them in its cost estimates. The firm argued that the mutual mistake should be corrected by reforming the contract to increase the estimated cost. CPSC argued that the agency had no reason to believe that the contractor had failed to include the cost of the subcontractor tracking study or part of the talent and travel expense costs in the documents that were submitted to show estimated costs. In the agency's opinion, the burden is on the contracting firm, not the Government, to insure that it has accounted for all its costs. GAO held that modification No. 6 reflected precisely the agreement which the parties intended, and the failure to include the two additional cost items in the agreement was due entirely to the contractor's own negligence. Therefore, the claim was not allowed.