Aydin Corp. v. United States

669 F.2d 681, 29 Cont. Cas. Fed. 82,129, 229 Ct. Cl. 309, 1982 U.S. Ct. Cl. LEXIS 24
CourtUnited States Court of Claims
DecidedJanuary 13, 1982
DocketNo. 139-80C
StatusPublished
Cited by27 cases

This text of 669 F.2d 681 (Aydin Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Aydin Corp. v. United States, 669 F.2d 681, 29 Cont. Cas. Fed. 82,129, 229 Ct. Cl. 309, 1982 U.S. Ct. Cl. LEXIS 24 (cc 1982).

Opinion

NICHOLS, Judge,

delivered the opinion of the court:

This mistaken bid case comes before the court on the parties’ cross-motions for summary judgment. By its motion plaintiff seeks to recover in quantum meruit or quantum valebant by persuading this court that no contract came [310]*310into being because of a purported mistake in its bid calculations. The defendant, for its part, seeks to have plaintiffs petition dismissed.

Upon consideration of the moving papers and briefs in support thereof, and oral argument, we conclude that plaintiffs motion should be denied and defendant United States’ motion should be granted.

On January 28, 1975, the Naval Electronic Systems Command (NAVELEX) solicited offers for 18 AN/TRC-97A radio sets (hereinafter called radio sets). Because urgency was assigned to this acquisition, formal advertising was suspended in favor of the expedited procedures of direct negotiations with two prior qualified producers of the radio sets. Plaintiff, Aydin, and its competitor, Radio Corporation of America (RCA), submitted bids. No other bids were submitted.

Plaintiff responded to NAVELEX’s solicitations offering to furnish the 18 radio sets for a total price of $2,866,808 or approximately $158,800 per unit. RCA’s bid was for a total of $3,989,790 or approximately $221,655 per unit, revealing an almost 40 percent disparity between the two.

In March of 1975 defendant conducted an evaluation of the two proposals and their respective prices. Defendant thereafter cleared the award of the contract to plaintiff. Included with the "business clearance” memorandum was a statement in longhand that "[t]he price offered will be verified by the contractor’s signature on the bilateral award sheet.” The price was never verified with the contractor. It is uncertain what kind of verification the writer had in mind. It may have been only that by signing the contract the bidder would again commit itself to the price it had already quoted. It is therefore not evidence that the writer suspected a mistake. At some time around the end of March in 1975 plaintiff was awarded the instant contract for the production of the 18 radio sets.

In July 1975 plaintiff, through a Freedom of Information Act request, learned of the bid price submitted by its competitor, RCA. On December 5, 1975, plaintiff advised defendant by letter that plaintiff had made a substantial error in the material estimate which was included in plaintiffs bid calculations. Plaintiff contends that on sever[311]*311al occasions between July and December of 1975, it orally advised the government that plaintiff had discovered a mistake in bid. The government disagrees that such oral representations were in fact made. The government further contends that even if such oral notice was promptly provided, plaintiff apparently notified persons without contractual authority.

More than 2 years later, on December 19, 1977, plaintiff submitted a claim to the contracting officer under the provisions of 50 U.S.C. §§ 1431-1435, alleging the existence of a mistake in its offer. This mistake, plaintiff claimed, was due to "clerical oversights” which consisted of a failure to estimate quantities and costs of required items, and an omission from its estimate of a standard allowance factor for shrinkage, breakage, and loss of low priced items; "estimating judgment errors,” and, finally, "errors in the compilation of the computerized material list.” Plaintiff contended that the mistake was so obvious, given the 40 percent discrepancy between its bid and that of RCA, that it should have been apparent to the contracting officer. The contracting officer was then under a duty to verify the bid with Aydin which she failed to do. Accordingly, plaintiff requested an increase in the contract price of $578,879 representing $494,768 in excess material costs, plus $84,111 in general and administrative costs.

NAVELEX denied this claim by letter dated June 7, 1978, citing several factors present at the time of the award which NAVELEX believed provided a reasonable basis to explain the disparity in the offered prices, and adequate support for denying plaintiffs claim. These factors included: plaintiffs ongoing production activity in building and providing spares and assemblies for the Marine Corps and the Air Forces as contrasted with RCA’s relative production inactivity; the significant differences in overhead rates between plaintiff and RCA, 125 percent and 194.5 percent, respectively, which by NAVELEX’s calculation, accounted for approximately half the difference in prices; the nature of plaintiffs errors, namely estimating judgment errors for which the government could bear no responsibility; and the significant hiatus between the date plaintiff first received [312]*312notice of its competitor’s price and its allegation of mistake, July 1975 and December 1975, respectively.

Plaintiff filed a claim for relief with the General Accounting Office (GAO) on September 15, 1978, in the amount of $624,204. Plaintiff once again cited as the basis for its claim the alleged mistake in bid and the failure of the contracting officer to obtain verification. Plaintiff requested that GAO settle the claim by declaring the contract null and void and granting relief on a quantum meruit or quantum valebant basis.

NAVELEX responded to plaintiffs GAO claim directing attention to the factors outlined above which NAVELEX argued afforded a reasonable basis to explain, in the mind of the contracting officer, the disparity in bid prices and which supported its decision to reject plaintiffs claim. NAVELEX also pointed to two government estimates of $155,000 and $162,134 per radio set, based on prior procurement history, contending that each estimate provided an independent basis to conclude that constructive notice of the alleged mistake should not be imputed to the contracting officer.

On September 6,1979, the Comptroller General issued an opinion denying plaintiffs claim primarily on the ground that the government estimates were sufficiently close to plaintiffs proposed prices. The Comptroller General relied on this court’s decision in Allied Contractors, Inc. v. United States, 159 Ct.Cl. 548, 550, 310 F.2d 945, 946 (1962), wherein it was stated that "the discrepancy between plaintiffs bid and the others did not put defendant on notice that plaintiff had made a mistake since its bid was so close to defendant’s estimate of the cost.”

Plaintiff then filed a request for reconsideration before the GAO, challenging the existence of the $155,000 estimate and disputing the accuracy of the $162,134 estimate contending that it should be $217,916 per unit instead.

On September 6,1980, the Comptroller General issued an opinion denying plaintiffs request for reconsideration. In its opinion the Comptroller General noted that the issue was not confined to the question of whether the government’s estimates were mistaken, but rather whether under the circumstances there was sufficient information avail[313]*313able to the contracting officer reasonably to dispel any doubts as to the question of mistake and such that a request for verification of plaintiffs prices would not be necessary.

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669 F.2d 681, 29 Cont. Cas. Fed. 82,129, 229 Ct. Cl. 309, 1982 U.S. Ct. Cl. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/aydin-corp-v-united-states-cc-1982.