B-170805, JUN 9, 1971

B-170805, JUN 9, 1971

RESCISSION OF CONTRACT - MISTAKE IN BID DECISION DENYING REQUEST FOR RESCISSION OF A CONTRACT WITH THE CORPS OF ENGINEERS AND REIMBURSEMENT OF ACTUAL COSTS FOR SERVICES RENDERED TO DATE UNDER AN IFB FOR PAINTING THE EXTERIOR SURFACES OF 29 BUILDINGS AND RELATED REPAIRS AT FORT WASHINGTON, ALASKA. ALTHOUGH THE LOW BID BY INTERIOR, $82,394, WAS SUBSTANTIALLY LOWER THAN THE SECOND LOW BID, $118,722, AND THE GOVERNMENT'S ESTIMATE OF $211,070, THE CONTRACTING OFFICER STRICTLY COMPLIED WITH THE PROVISIONS OF ASPR 2- 406.3(E)(1) IN AN ATTEMPT TO PUT INTERIOR ON NOTICE OF THE POSSIBILITY OF A MISTAKE IN BID. WHETHER THE MANNER IN WHICH THE CONTRACTOR IS BEING REQUIRED TO PERFORM THE WORK IS WITHIN THE MANNER CONTEMPLATED BY BOTH THE SPECIFICATIONS AND THE PARTIES, IS A CONTROVERSY FOR DETERMINATION UNDER THE DISPUTES CLAUSE OF THE CONTRACT.

TO INTERIOR PAINT COMPANY, INC.:

THIS IS IN REPLY TO YOUR LETTERS OF DECEMBER 14, 1970, AND APRIL 14, 1971, AND ENCLOSURES, REQUESTING RESCISSION OF CORPS OF ENGINEERS (CORPS), CONTRACT NO. DACA 85-70-C-0065, AND REIMBURSEMENT OF ACTUAL COSTS FOR SERVICES RENDERED TO DATE.

ESSENTIALLY, IT IS YOUR POSITION THAT YOU ENTERED INTO PERFORMANCE OF THE SUBJECT CONTRACT UNDER A MISTAKEN UNDERSTANDING AS TO THE TYPE AND AMOUNT OF WORK REQUIRED BY THE GOVERNMENT, AND THAT GREAT HARDSHIP WOULD RESULT IF THE CONTRACT IS TO BE ENFORCED AS INTERPRETED BY THE CORPS. YOU THEREFORE REQUEST THAT THE CONTRACT BE RESCINDED AND PAYMENT MADE FOR ACTUAL COSTS INCURRED. FOR THE REASONS STATED BELOW, WE HAVE CONCLUDED THAT ON THE PRESENT RECORD YOUR REQUEST FOR SUCH RELIEF MUST BE DENIED.

THE RECORD SHOWS THAT THE ALASKA DISTRICT CORPS ISSUED AN INVITATION FOR BIDS ON JANUARY 30, 1970, FOR PAINTING THE EXTERIOR SURFACES OF 29 BUILDINGS AND RELATED REPAIRS AT FORT WAINWRIGHT, ALASKA. SIX BIDS WERE RECEIVED AND OPENED ON MARCH 24, 1970, AND YOUR BID WAS THE LOWEST SUBMITTED AT $82,394, FOLLOWED BY THE SECOND LOWEST AT $118,722. THE GOVERNMENT'S ESTIMATE FOR THE WORK WAS $211,070. IMMEDIATELY AFTER BID OPENING ON MARCH 24 THE GOVERNMENT REQUESTED BY TELEPHONE A CONFIRMATION OF YOUR LOW BID BECAUSE OF THE GREAT DISPARITY IN THE BID PRICES. MARCH 25 YOU REQUESTED CLARIFICATION OF THE PAINTING SPECIFICATIONS, PARTICULARLY WITH RESPECT TO THE REQUIREMENTS FOR THE PRIME COAT OF PAINT. THERE APPARENTLY WERE TELEPHONE CONVERSATIONS BETWEEN YOUR FIRM AND THE GOVERNMENT AS TO THE PRIME COAT REQUIREMENTS AT WHICH TIME YOU WERE ALSO ADVISED THAT THE REQUIRED SURFACE PREPARATION, REPAIRS AND PRETREATMENTS WERE EXTENSIVE AND SHOULD NOT BE OVERLOOKED.

ON APRIL 7 THE DISTRICT ENGINEER SPECIFICALLY ADVISED YOU IN WRITING OF THE EXACT MONETARY DIFFERENCES IN YOUR BID AS COMPARED TO THE GOVERNMENT'S ESTIMATE AND THE SECOND LOW BID AND HE EXTENDED AN OPPORTUNITY FOR YOU TO MEET WITH HIS STAFF FOR A DETAILED REVIEW OF YOUR BID. YOU MET WITH REPRESENTATIVES OF THE CONTRACTING OFFICER ON APRIL 27 AND THE RECORD SHOWS THAT YOU DECLINED THE OFFER TO REVIEW YOUR BID IN DETAIL. THE CONTRACTING OFFICER STATES THAT, NEVERTHELESS, AN INQUIRY WAS MADE INTO THE POSSIBLE CAUSES OF THE BIDDING DISPARITY. YOU WERE CAUTIONED THAT YOUR PRICE SHOULD NOT BE BASED UPON SPRAY APPLICATION OF PAINT SINCE THIS METHOD WAS NOT CONTEMPLATED BY THE CONTRACT. YOU WERE ADVISED BY THE GOVERNMENT'S REPRESENTATIVE, MR. WILLIAM THOMPSON, THAT BECAUSE OF THE USING AGENCY'S DISSATISFACTION WITH PRIOR PAINTING CONTRACTS AT FORT WAINWRIGHT, EXTENSIVE SURFACE PREPARATION WAS EXPECTED AND SPECIFIED BY THE CONTRACT. THE CONTRACTING OFFICER STATES THAT YOU THEN EXPRESSED AN APPARENT UNDERSTANDING OF THESE REQUIREMENTS AND YOU STATED THAT YOU WERE CONFIDENT YOU COULD PERFORM ACCORDINGLY WITHIN YOUR BID PRICE. YOUR CONFIDENCE WAS BASED, IN PART, UPON AN EXTREMELY LOW, BUT FIRM, SUBCONTRACT QUOTE OF $150 FOR REPAIR OF EACH OF THE 56 CANOPIES SPECIFIED IN THE CONTRACT, WHEREAS NORMALLY THE WORK WOULD COST IN EXCESS OF $750 PER CANOPY.

ON MAY 1 THE CONTRACTING OFFICER WROTE TO YOU AND ADVISED THAT YOUR INTENDED PERFORMANCE AS EXPRESSED IN YOUR CORRESPONDENCE, WAS ESSENTIALLY CORRECT BUT HE CAUTIONED THAT THE WORK AS STATED BY YOU WAS NOT EXHAUSTIVE OF THE REQUIREMENTS SPECIFIED. THE CONTRACTING OFFICER SPECIFICALLY MENTIONED, AMONG OTHER POINTS, THAT IN ADDITION TO THE PAINTING REQUIREMENTS, THERE WERE EXTENSIVE REPAIRS AND SURFACE PREPARATION REQUIREMENTS NOTED IN THE REVISED AND AMENDED DRAWINGS AND SPECIFICATIONS. HE ALSO REQUESTED AN UNQUALIFIED CONFIRMATION OF BID, TOGETHER WITH A STATEMENT THAT YOU HAD GIVEN FULL CONSIDERATION TO THE SPECIFICATIONS AS CLARIFIED. ON MAY 4 YOU CONFIRMED YOUR BID ACCORDINGLY, AND AN AWARD WAS MADE TO YOU ON MAY 7.

THE CONTRACTING OFFICER HAS ADVISED THAT THE CANOPY SUBCONTRACTOR SUBSEQUENTLY FAILED TO PERFORM, AND THE GOVERNMENT HAS ONLY INSISTED ON THE EXTENSIVE SURFACE PREPARATION AGREED UPON BY THE PARTIES.

IT IS YOUR POSITION THAT YOU READ THE CONTRACT SPECIFICATIONS FOR SURFACE PREPARATIONS AND INTERPRETED THEM BASED UPON THE CUSTOM OF THE TRADE AND YOUR KNOWLEDGE OF PERFORMANCE RENDERED UNDER PRIOR CONTRACTS FOR THE WORK, BUT THE GOVERNMENT IS REQUIRING MORE EXTENSIVE PERFORMANCE THAN A REASONABLE INTERPRETATION OF THE SPECIFICATIONS WOULD ALLOW.

THE DISPUTED SPECIFICATIONS REGARDING THE PREPARATION AND PRETREATMENT OF SURFACES PROVIDE, IN PERTINENT PART, AS FOLLOWS:

"4. CLEANING, PREPARATION, AND PRETREATMENT OF SURFACES:

"4.2 WOOD SURFACES: REMOVE ALL CRACKED, LOOSE AND DETERIORATED PAINT THAT IS NOT TIGHTLY BONDED AND ADHERED TO THE WOOD SURFACE. TIGHTLY BONDED PAINT NEED NOT BE REMOVED PROVIDING THAT ALL CRACKS AND ROUGH EDGES ARE FILLED AND/OR SANDED OUT TO ELIMINATE ROUGHNESS AND ABRUPT EDGES. LOOSE AND/OR CURLING EDGES WILL NOT BE ACCEPTABLE. ROTTEN, SPLIT OR DETERIORATED WOOD, INCLUDING PLYWOOD THAT CAN NOT BE MADE SOUND AND SMOOTH BY FILLING AND SANDING SHALL BE REMOVED AND REPLACED WITH SOUND MATERIAL OF SIMILAR TYPE AND THICKNESS. LOOSE NAILS SHALL BE DRIVEN TIGHT. LOOSE BOARDS AND PLYWOOD SHALL BE RE-NAILED. ALL HOLES, CRACKS, JOINTS AND OPENINGS SHALL BE FILLED AND SEALED.

"6. MISCELLANEOUS REPAIR:

"6.1 SET ALL LOOSE NAILS AND RENAIL LOOSE BOARDS. REPAIR AND/OR REPLACE DELAMINATED PLYWOOD AND WOOD THAT HAS STARTED TO DECAY. FILL CRACKS, CREVICES AND JOINTS WHICH HAVE OPENED AS A RESULT OF WEATHERING, SHRINKAGE, AND/OR RAKING OF THE STRUCTURE, WITH FILLER AFTER PRIMING. SAND FINISH LITELY PRIOR TO PAINTING.

"8.2 SURFACE PREPARATION AND PRETREATMENT:

CLEANING AND PRETREATMENT OF SURFACES PRIOR TO PAINTING SHALL BE ACCOMPLISHED IN ACCORDANCE WITH THE DETAILED REQUIREMENTS SPECIFIED. SURFACE PREPARATION AND PRETREATMENT CLEANING, SCRAPPING, SEALING, AND

IT IS YOUR POSITION THAT THE GOVERNMENT IS ERRONEOUSLY REQUIRING A "MIRROR SMOOTH" FINISH PURSUANT TO THE PROVISION IN PARAGRAPH 4.2 ABOVE, WHICH STATES THAT "TIGHTLY BONDED PAINT NEED NOT BE REMOVED PROVIDING THAT ALL CRACKS AND ROUGH EDGES ARE FILLED AND/OR SANDED OUT TO ELIMINATE ROUGHNESS AND ABRUPT EDGES." YOU FURTHER STATE THAT IN 1963 THE CONTRACTOR PAINTED OVER PAINT AND LEFT ABRUPT EDGES, WHICH ARE NOW REQUIRED TO BE SMOOTHED OUT EVEN THOUGH THE PAINT IS TIGHT AND FAIRLY SMOOTH. YOU DO NOT UNDERSTAND THE SPECIFICATIONS AS REQUIRING THE SANDING OF TIGHTLY ADHERED PAINT AND YOU CONTEND THAT THE PERFORMANCE BEING REQUIRED BY THE GOVERNMENT IS SUCH THAT THE PAINT WOULD HAVE TO BE ENTIRELY REMOVED. MOREOVER, YOU CLAIM YOU INTERPRETED THE SPECIFICATIONS AS REQUIRING LIGHT SANDING OF THE BUILDINGS, WHICH YOU INTENDED TO ACCOMPLISH HERE BY HAND SANDING RATHER THAN BY MACHINE SANDING, AND THAT THIS INTERPRETATION WAS BASED UPON THE ASSURANCE OF THE CONTRACTING OFFICER PRIOR TO AWARD. IN THIS CONNECTION, YOU SPECIFICALLY REFER TO A LETTER DATED MAY 1, 1970, WHEREIN THE CONTRACTING OFFICER STATES, IN PERTINENT PART, AS FOLLOWS:

"REGARDING THE PAINTING SCHEDULE FOR 'EXTERIOR WOOD SURFACES' SHOWN ON PAGE 9A8 AS AMENDED BY AMENDMENT 4, THE NOTES UNDER SURFACE PREPARATION AND PRETREATMENT AND THE COLUMN '1D COAT' INDICATING 'TT-P 25, SPOT FILLER, LIGHT SANDING' IS ACTUALLY THE SURFACE PREPARATION AND PRIMING REQUIRED BY PARAGRAPH 4.1, 4.2 AND 4.2.1 AS AMENDED BY AMENDMENTS 1 AND 4."

YOU STATE THAT YOU CONSTRUED THIS STATEMENT TO MEAN THAT LIGHT SANDING WAS THE SURFACE PREPARATION AND PRIMING REQUIRED BY THE SPECIFICATIONS.

THE RECORD SHOWS THAT THE GOVERNMENT IS REQUIRING YOU TO SAND ALL ABRUPT EDGES IRRESPECTIVE OF WHETHER THEY ARE TIGHTLY BONDED OR THE RESULT OF PRIOR MAINTENANCE, AND THAT MACHINE SANDING WAS RECOMMENDED BY THE GOVERNMENT INSPECTOR. HOWEVER, THE CONTRACTING OFFICER STATES THAT YOU HAVE NOT BEEN REQUIRED TO RESTORE THE SURFACES OF THE BUILDINGS TO AN ABSOLUTELY SMOOTH CONDITION OR ANYTHING CLOSELY APPROACHING NEW CONSTRUCTION PAINTING.

FROM THE FOREGOING, IT IS APPARENT THAT THE CONTROVERSY ARISES OUT OF A DISPUTE AS TO WHETHER THE MANNER IN WHICH THE CONTRACTOR IS BEING REQUIRED TO PERFORM THE WORK IS WITHIN THE MANNER CONTEMPLATED BY BOTH THE SPECIFICATIONS AND THE PARTIES. IT IS EQUALLY APPARENT THAT A RESOLUTION OF THIS DISPUTE FIRST REQUIRES VARIOUS FACTUAL DETERMINATIONS, SUCH AS EXACTLY HOW THE CONTRACTING OFFICER IS REQUIRING THE WORK TO BE DONE AND WHAT THE TRADE USAGE MAY BE IN THE LOCALITY UNDER SIMILAR SPECIFICATION REQUIREMENTS. IN THE ABSENCE OF A RESOLUTION OF SUCH FACTUAL QUESTIONS UNDER THE PROCEDURES PRESCRIBED BY THE DISPUTES CLAUSE OF THE CONTRACT, THIS OFFICE MUST ASSUME THAT THE SPECIFICATIONS ARE INTENDED TO REQUIRE PERFORMANCE OF THE WORK IN THE MANNER REQUIRED BY THE CONTRACTING OFFICER, AND THAT THE LANGUAGE OF THE SPECIFICATIONS, VIEWED IN THE LIGHT OF ANY PERTINENT FACTUAL CIRCUMSTANCES, ARE UNAMBIGUOUS AND WOULD SUPPORT THE CONTRACTING OFFICER'S INTERPRETATION.

WHILE YOU HAVE REQUESTED THIS OFFICE TO DIRECT RESCISSION OF YOUR CONTRACT, IN THE ABSENCE OF ANY PATENT AMBIGUITY IN THE SPECIFICATIONS WE ARE AUTHORIZED TO TAKE SUCH ACTION ONLY IF IT APPEARS THAT THE PARTIES WERE MUTUALLY MISTAKEN, OR THE BIDDER'S ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER WAS AWARE OF THE MISTAKE AT THE TIME OF BID ACCEPTANCE AND SOUGHT TO TAKE ADVANTAGE OF IT. 17 COMP. GEN. 452 (1937); B-170691, JANUARY 28, 1971.

IN THE INSTANT CASE, WE SEE NO BASIS ON WHICH IT MAY BE CONTENDED THAT THERE WAS MUTUAL MISTAKE, SINCE YOU ARE ALLEGING THE SPECIFICATIONS SHOULD BE INTERPRETED IN A MANNER WHICH IS QUITE DISSIMILAR TO THE INTERPRETATION ADVANCED BY THE CONTRACTING OFFICER. IT NECESSARILY FOLLOWS THAT ANY MISTAKE IN THE PREPARATION OF YOUR BID RESULTING FROM YOUR INTERPRETATION OF THE SPECIFICATION REQUIREMENTS, MUST BE VIEWED AS A UNILATERAL MISTAKE, AND UNILATERAL MISTAKE WILL SUPPORT RESCISSION OR REFORMATION OF A CONTRACT ONLY IF THE CONTRACTING OFFICER IS CHARGEABLE WITH NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF THE EXISTENCE OF THE MISTAKE.

WHILE THE RECORD INDICATES THAT THE CONTRACTING OFFICER SUSPECTED THERE WAS AN ERROR IN YOUR BID, HIS RESPONSIBILITY THEREAFTER IS SPELLED OUT QUITE CLEARLY IN SECTION 2-406.3(E)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"(1) IN THE CASE OF ANY SUSPECTED MISTAKE IN BID, THE CONTRACTING OFFICER WILL IMMEDIATELY CONTACT THE BIDDER IN QUESTION CALLING ATTENTION TO THE SUSPECTED MISTAKE, AND REQUEST VERIFICATION OF HIS BID. THE ACTION TAKEN TO VERIFY BIDS MUST BE SUFFICIENT TO EITHER REASONABLY ASSURE THE CONTRACTING OFFICER THAT THE BID AS CONFIRMED IS WITHOUT ERROR OR ELICIT THE ANTICIPATED ALLEGATION OF A MISTAKE BY THE BIDDER. TO INSURE THAT THE BIDDER CONCERNED WILL BE PUT ON NOTICE OF A MISTAKE SUSPECTED BY THE CONTRACTING OFFICER, THE BIDDER SHOULD BE ADVISED, AS IS APPROPRIATE, OF (I) THE FACT THAT HIS BID IS SO MUCH LOWER THAN THE OTHER BID OR BIDS AS TO INDICATE A POSSIBILITY OF ERROR, (II) IMPORTANT OR UNUSUAL CHARACTERISTICS OF THE SPECIFICATIONS, (III) CHANGES IN REQUIREMENTS FROM PREVIOUS PURCHASES OF A SIMILAR ITEM, OR (IV) SUCH OTHER DATA PROPER FOR DISCLOSURE TO THE BIDDER AS WILL GIVE HIM NOTICE OF THE SUSPECTED MISTAKE. IF THE BID IS VERIFIED, THE CONTRACTING OFFICER WILL CONSIDER THE BID AS ORIGINALLY SUBMITTED. *** "

THE FACTS AND CIRCUMSTANCES OUTLINED ABOVE SHOW THAT THE GOVERNMENT MADE EVERY REQUIRED EFFORT IN THIS CASE TO PUT YOU ON NOTICE OF THE POSSIBILITY THAT YOUR BID WAS IN ERROR, AND GAVE YOU ADEQUATE OPPORTUNITY TO DISCOVER AND ALLEGE ANY SUCH ERROR. YOU WERE FULLY ADVISED IN ACCORDANCE WITH THE ABOVE QUOTED REGULATION AND SINCE YOU VERIFIED THE BID, THE CONTRACTING OFFICER WAS REQUIRED TO CONSIDER AND ACCEPT THE BID AS ORIGINALLY SUBMITTED. IN VIEW THEREOF WE DO NOT THINK THIS CASE COMES WITHIN THE RULE STATED IN UNITED STATES V METRO NOVELTY MFG. CO., 125 F SUPP. 713 (1954), WHERE THE REQUEST FOR VERIFICATION WAS INADEQUATE. UNDER THE CIRCUMSTANCES, WE ARE UNABLE TO CONCLUDE THAT ACCEPTANCE OF YOUR BID, FOLLOWING YOUR VERIFICATION AND ASSURANCE THAT IT WAS CORRECT, PRESENTS ANY BASIS WHICH WOULD REQUIRE OR JUSTIFY RESCISSION OF YOUR CONTRACT. MOREOVER, THE FACT THAT THE ARMED SERVICES BOARD OF CONTRACT APPEALS MAY NOT BE ABLE TO AUTHORIZE RESCISSION OF THE CONTRACT WOULD NOT BE A SUFFICIENT BASIS, IN AND OF ITSELF, FOR THIS OFFICE TO GRANT THE RELIEF REQUESTED.

CONVERSELY, IT APPEARS THAT YOUR CLAIM IS ONE ARISING UNDER THE CONTRACT, AND THAT FACTUAL QUESTIONS EXIST WHICH WOULD REQUIRE YOUR CLAIM TO INITIALLY BE DECIDED UNDER THE DISPUTES CLAUSE OF THE CONTRACT.

ACCORDINGLY, ON THE PRESENT RECORD, YOUR REQUEST FOR RESCISSION OF YOUR CONTRACT AND REIMBURSEMENT OF ACTUAL COSTS MUST BE DENIED.