Information International Associates, Inc. v. United States

74 Fed. Cl. 192, 2006 U.S. Claims LEXIS 327, 2006 WL 3094075
CourtUnited States Court of Federal Claims
DecidedOctober 31, 2006
DocketNo. 04-1489C
StatusPublished
Cited by4 cases

This text of 74 Fed. Cl. 192 (Information International Associates, Inc. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Information International Associates, Inc. v. United States, 74 Fed. Cl. 192, 2006 U.S. Claims LEXIS 327, 2006 WL 3094075 (uscfc 2006).

Opinion

MEMORANDUM OPINION AND FINAL ORDER1

BRADEN, Judge.

The common law doctrine of “unilateral mistake” recognizes the equitable authority of a court to afford relief where there was a mistake, “as to a basic assumption” on which a contract was made, that has a “material effect on the agreed exchange of performances” adverse to the mistaken party and “enforcement of the contract would be unconscionable” or “the other party had reason to know of the mistake.” Restatement (Second) of Contracts § 153 (1981); see also Johnson Mgmt. Group CFC, Inc. v. Martinez, 308 F.3d 1245, 1260 (Fed.Cir.2002) (holding that “the result of a unilateral mistake as to a basic assumption becomes voidable if the mistaken party does not bear the risk of the mistake; and ... the mistake makes enforcement of the contract unconscionable;” or the other party caused or had reason to know of the mistake) (citations omitted).

In the context of government contracts, the United States Court of Appeals for the Federal Circuit has held that a contract may be reformed where the relevant contracting officer had actual or constructive knowledge that the bid was based on a clear, clerical or mathematical error or a misreading of the specifications. See United States v. Hamilton Enterprises, 711 F.2d 1038, 1046 (Fed.Cir.1983) (quoting Aydin Corp. v. United States, 229 Ct.Cl. 309, 669 F.2d 681, 685 (1982)) (holding that trial court may reform a contract where plaintiff establishes a unilateral mistake if, “the contractor establishes that the error resulted from a ‘clear cut clerical or arithmetical error, or a misreading of the specifications.’ ”); see also Giesler v. United States, 232 F.3d 864, 869 (Fed.Cir. 2000) (“Generally, a contractor may obtain reformation or rescission of the contract only if the contractor establishes that its bid error resulted from a ‘clear cut clerical or arithmetical error, or a misreading of the specifications.’ ”) (citations omitted).

In this case, Plaintiff has established the elements of unilateral mistake and therefore, the court enters judgment in favor of Plaintiff and orders reformation of the Contract to reflect the correct amount of Plaintiff’s bid.

[194]*194To facilítate review of this Memorandum Opinion and Final Order, the following outline is provided:

I. RELEVANT FACTS.
A. Request For Proposal No. F05603-98-R0002 And Contract Award To Plaintiff.
B. Plaintiff Identified An Error In The Final Price Proposal.
C. Plaintiff Filed A Request For An Equitable Adjustment On April 30,2003.
D. Plaintiff Filed A Certified Claim On June 1, 2004.
II. PROCEDURAL BACKGROUND.
III. DISCUSSION.
A. Jurisdiction.
1. The Requirements Of The Contract Disputes Act.
2. The Court Does Not Have Jurisdiction To Adjudicate The Contracting Officer’s Denial Of Plaintiff’s April 30, 2003 Request For Equitable Adjustment.
3. The Court Does Not Have Jurisdiction To Adjudicate The Government’s Affirmative Defenses Of Contributory Negligence and Assumption Of Risk.
4. The Court Has Jurisdiction To Adjudicate Plaintiff’s Appeal Of The Contracting Officer’s Deemed Denial Of Plaintiff’s June 1, 2004 Certified Claim.
B. Standing.
C. Standard For Decision On Summary Judgment—RCFC 56.
D. Applicable Law Regarding A Unilateral Mistake Discovered After The Award Of A Contract.
E. The Court’s Resolution Of The Parties’ Cross-Motions For Summary Judgment.
1. The Parties Cross-Motions For Summary Judgment.
2. Plaintiff Established The Elements Of A Unilateral Mistake As A Matter of Law.
a. Plaintiff’s Mistake Occurred Prior To Award Of The Contract.
b. Plaintiff’s Mistake Was Clerical In Nature.
c. The Government Should Have Known Of The Mistake.
d. The Government Did Not Request Verification.
e. Plaintiff Has Established By Clear And Convincing Evidence The Correct Amount Of The Bid.
3. Plaintiff Is Entitled To Reformation Of The Contract.
4. Plaintiff Is Entitled To Interest On The Amount Due.
IV. CONCLUSION.
$ $
1. RELEVANT FACTS.2
A. Request For Proposal No. F05603-98-R0002 And Contract Award To Plaintiff.

On July 31, 1998, the United States Air Force (“the Government”) issued Request for [195]*195Proposal No. F05603-98-R0002 (“the Solicitation”) for “labor and supplies to man and manage” libraries, located on five Air Force Bases (“AFB”): Warren AFB; Malmstrom AFB; Vandenburg AFB; Patrick AFB; and Peterson AFB. See DX 10. Although the Solicitation specified that only one contract would be awarded for all five AFBs, offerors also were requested to provide a price for each AFB separately for each of the five contract years, ie., the base year and four subsequent option years. See JX 1 at 17-19; see also PX 1 at 8-19. Seven offerors, including Information International Associates (“Plaintiff”), responded to the Solicitation with an Initial Price Proposal. See PX 2 at 1-3. Approximately 80% of each price proposal was for labor costs. See PX 1 at 8-19.

On October 8,1998, the relevant Contracting Officer (“CO”) determined that Margon, Inc. (“Margon”) and Plaintiff submitted technically acceptable offers. See PX 2 at 3; see also JX 1 at 21. Margon’s offer for [deleted] and Plaintiff’s offer for $5,145,566.00 were selected as being in the competitive range. Id. On November 2, 1998, the CO requested that both firms submit Final Price Proposals:

[O]fferors are advised not to modify what was presented in their oral proposals in their final price proposal either directly, by inference, or effect. Example: manning levels and employee classifications should not be modified in order to reduce price at time of final proposal.

PX 3.

Although the number of staff was to remain unchanged, offerors were allowed to decrease their final bid price by transferring responsibilities from hourly to salaried staff to reduce the hours needed to provide the required services. See JX 1 at 29; JX 2 at 23, 32. The CO also required that each offeror’s Final Price Proposal include both a Standard Form 1447 and Schedule B. See PX 3.3

On November 6,1998, Plaintiff submitted a Final Price Proposal, including Standard Form 1447 and Schedule B. See PX 4.

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Bluebook (online)
74 Fed. Cl. 192, 2006 U.S. Claims LEXIS 327, 2006 WL 3094075, Counsel Stack Legal Research, https://law.counselstack.com/opinion/information-international-associates-inc-v-united-states-uscfc-2006.