Summary
In Leitman v. United States, 60 F. Supp. 218, 104 Ct.Cl. 324, plaintiff contended that a telegraphic modification of his bid downward should be disregarded, as it had arrived an hour and forty minutes after the time set for the opening of the bids.
Summary of this case from Refining Associates v. United States, (1953)Opinion
No. 45498.
May 7, 1945.
William M. Aiken, of Washington, D.C. (Charles A. Horsky, of Washington, D.C., Joshua Sprayregen, of New York City, and Covington, Burling, Rublee, Acheson Shorb, of Washington, D.C., on the brief), for plaintiff.
John B. Miller, of Washington, D.C., and Francis M. Shea, Asst. Atty. Gen., for defendant.
Before WHALEY, Chief Justice, and LITTLETON, WHITAKER, JONES, and MADDEN, Judges.
Action by Aleck Leitman, trading as Lite Manufacturing Company, against the United States to recover difference in price at which plaintiff offered in writing to furnish an amount of helmet linings and the price at which plaintiff agreed to furnish them in subsequent telegrams.
Petition dismissed.
This case having been heard by the Court of Claims, the court, upon the evidence and the report of a commissioner, makes the following special findings of fact:
1. Plaintiff, a citizen of the United States, is an individual trading as Lite Manufacturing Company and is engaged in business at 622 Broadway, New York, N Y
2. On June 28, 1940, defendant, through the Commanding Officer, Rock Island, Arsenal, Illinois, issued circular advertisement for bids No. 741-40-1178 for the manufacture and delivery of leather helmet linings in accordance with the specifications therein set forth. The invitation called for separate bids per thousand helmet linings in blocks of 50,000 up to 400,000, and an additional block of 100,000 for quantities between 400,000 and 500,000. The time originally set for the opening of bids was 9:00 a.m. Central Standard Time, July 15, 1940, at Rock Island Arsenal, Illinois, but this was subsequently postponed until the same hour at the same place on July 25, 1940.
3. Accompanying the invitation to bid that was sent to plaintiff was U.S. Standard Form 22, "Instructions to Bidders." The Instructions to Bidders contained the following statement with respect to telegraphic bids under Article 11:
"Unless specifically authorized, telegraphic bids will not be considered, but modifications by telegraph of bids already submitted will be considered if received prior to the hour set for opening."
This was the only reference contained in the invitation to bid or the accompanying instructions with reference to telegraphic bids.
The invitation to bid provided that "all bids shall remain in effect for 30 days after the date of opening."
4. On July 23, 1940, and prior to the date set for the opening of the bids, plaintiff submitted a bid dated July 12, in accordance with the invitation and proposed to furnish helmet linings at prices commencing at $1,690 per thousand linings on quantities from 1 to 50,000, the price being progressively lowered by blocks of 50,000 linings to $1,440 per thousand linings on quantities between 400,000 and 500,000.
5. Plaintiff was assisted by an employee, Joseph Gurwin, in preparing the submitted bid. Gurwin was Aleck Leitman's first assistant, and his duties in general related to purchasing and the preparation of estimates for bids. Gurwin, with the knowledge and approval of Aleck Leitman, both in the original bid and in certified invoices subsequently submitted under the contract resulting therefrom, represented himself as manager of the Lite Manufacturing Company.
6. The original bid made by the plaintiff had been based on an estimate of 2 1/3 feet of leather per helmet lining.
Early in the morning of July 25, 1940, the day that the bids were to be opened, Gurwin arrived at the office of the Lite Manufacturing Company and made some paper patterns of the helmet linings and laid them on some sample skins. After working with a dozen sample skins Gurwin came to the conclusion that he could cut a helmet lining out of two feet of leather. Gurwin thereupon sent the following telegram at 9:19 a.m. Eastern Standard Time:
"The Commanding Officer "Ria Rock Island Ills
"Recircular 741 — 40 — 1178 Helmet linings Reduce all prices seventy dollars per thousand
"Lite Mfg Co"
This telegram was received in the office of the Postal Telegraph Company, Rock Island, Illinois, at 8:35 a.m. Central Standard Time.
7. After sending the telegram quoted in the previous finding, Gurwin looked over the skins again and rechecked his calculations, and at 9:31 a.m. Eastern Standard Time, sent a second telegram to the Rock Island Arsenal, which telegram was as follows:
"Commanding Officer "Rock Island Arsenal "Rock Island Ills
"Recircular 741 — 40 — 1178 Helmet linings Change our telegraphic reduction of seventy dollars per thousand on all our prices to one hundred dollars per thousand
"Lite Mfg Co"
The second telegram was received in the office of the Postal Telegraph Company at Rock Island, Illinois, at 8:55 a.m. Central Standard Time.
8. On the date of receipt of the telegrams the telegraph companies in Rock Island, Illinois, including the Postal Telegraph Company, were under instructions from the Rock Island Arsenal not to communicate telegrams to the Arsenal by means of the telephone but to deliver the same by messenger. Both of the telegrams quoted in the previous findings were delivered to the Rock Island Arsenal from the office of the Postal Telegraph Company in Rock Island, Illinois, at 10:40 a.m. Central Standard Time July 25, 1940, one hour and forty minutes after the time set for the opening of bids.
9. About three hours after Gurwin sent the two telegrams quoted in findings 6 and 7, Mr. Leitman arrived at the office, and Gurwin told Leitman about his calculations on the helmet linings and the two telegrams that he had sent. Between 2 and 3 o'clock p.m. of the same day and pursuant to instructions from Leitman, Gurwin went to the office of the Postal Telegraph Company in New York City, from which the telegrams had been sent, and requested a check of the time at which they were delivered at the Rock Island Arsenal.
On July 26, 1940, the next day, Gurwin was orally informed by the Postal Telegraph Company that both of the telegrams had been delivered to Rock Island Arsenal after the time set for the opening of the bids, and he communicated this information to Leitman.
10. Bids were opened at Rock Island Arsenal at 9 a.m. C. S.T. July 25, 1940. After making the abstract of the bids it was necessary to send the same on to the Ordnance Department in Washington for final determination, as the bids on the helmet linings had been obtained on lots of 100,000 to 500,000 and Rock Island Arsenal did not know the quantity desired by the Ordnance Department.
On July 26, 1940, the Commanding Officer of Rock Island Arsenal sent the abstract of the bids to the Procurement Officer in Washington, D.C., accompanied by a letter which stated in part as follows:
"1. In accordance with instructions contained in Production Order No. S — 127 (dated June 26, 1940), Circular Advertisement No. 741 — 40 — 1178 was issued by this Arsenal to cover procurement of Helmet Lining Assemblies. Forwarded herewith is abstract of bids, together with bids, as received in response to this circular advertisement.
"2. As far as can be determined at this Arsenal, the proposal of Bidder No. 5 (Lite Manufacturing Company, New York City) is the lowest bid, at $1,440 per thousand in quantities of from 400,001 to 500,000. In this connection, attention is invited to two telegrams of July 25, 1940, from the Lite Manufacturing Company, the first reading as follows:
"`Recircular 741 — 40 — 1178 helmet linings reduce all prices $70.00 per thousand.' and the second as follows:
"`Recircular 741 — 40 — 1178 helmet linings change our telegraphic reduction of $70.00 per thousand on all our prices to $100.00 per thousand.'
"These telegrams were received subsequent to the opening of the bids; but inasmuch as the Lite Manufacturing Company is the apparent low bidder, it is recommended that the Government take advantage of the above-mentioned reduced prices."
11. On July 26 or 27, 1940, Leitman called the Rock Island Arsenal by long distance telephone and talked to Joseph Curley, Chief of Procurement at the Arsenal. Leitman expressed the opinion to Curley that the telegrams had been sent in error but inasmuch as they did not reach the Arsenal in time, he was sure that they would not be considered. Curley told Leitman on the telephone that the telegrams might be taken into consideration because they were received in Rock Island before 9 o'clock and that the Lite Manufacturing Company appeared to be the lowest bidder but the abstract of bids and pertinent documents were being sent to Washington for final determination.
Curley also called Leitman's attention to the fact that in the bid plaintiff had allowed only two days for acceptance and unless plaintiff extended this time the two days would not be sufficient and that Leitman's bid would probably be thrown out unless he extended the acceptance date. Leitman did not tell Curley that he wanted the telegrams to be disregarded.
12. Leitman was worried about the telegrams after his long distance telephone conversation with Curley at the Rock Island Arsenal, and on July 27th conferred with one of his employees, Arthur A. Gardner, relative to the helmet lining contract. Gardner's duties were that of contact man with the various Government agencies with which the Lite Manufacturing Company was doing business, and Leitman instructed Gardner to proceed to Washington to confer with the officials of the Ordnance Department regarding the award of the contract and the telegrams.
On Monday, July 29, 1940, Gardner arrived in Washington and contacted the office of the Chief of Ordnance, but found that the abstract of bids had not then been received in the Washington office from Rock Island.
13. On Tuesday, July 30, the papers were received and Gardner had a conference with General Drewry, who was then Chief of the Small Arms Division, and Mr. Frank J. Jervey, head Ordnance Engineer, Office of the Chief of Ordnance, about the helmet lining contract.
General Drewry showed Gardner the abstract of the bids which had been made at the time of opening at Rock Island Arsenal, and calculations to ascertain the low bid were made at the conference in the presence of Gardner, who assisted in the calculations. These calculations were necessary because the bidders had submitted prices on a sliding-scale basis and on various amounts or "blocks" of helmet linings. Computations had to be made to ascertain whether certain low bids on a partial quantity when combined with other bids on the remaining quantity would result in the minimum cost to the Government.
It was ascertained from these calculations that the plaintiff was the low bidder at his original figure of $1,440 per thousand helmet linings, on the number of helmet linings desired by the Ordnance Department, which was 428,045, and Gardner was thus informed at the conference.
14. The telegrams were not referred to nor discussed until Gardner was informed that plaintiff was the low bidder at the original figure. Gardner then explained that the telegrams were the result of errors made by plaintiff's employee Gurwin in calculating the amount of material required to make up a helmet lining and that they arrived too late at the Rock Island Arsenal, but he did not ask General Drewry to disregard them.
It was made clear to Gardner at the conference that the telegraphic modification of plaintiff's bid might be considered, but, that, instead, all bids might be rejected and the contract readvertised, since plaintiff had specified that his bid should be accepted within two days, and this time had expired. Plaintiff's representative, however, stated that he did not want a readvertisement for bids, but would rather take the risk of loss, and he handed Jervey a letter dated July 29, 1940, signed by Leitman, extending the acceptance period, which letter read as follows:
"Commanding Officer, "Rock Island Arsenal, Rock Island, Illinois.
"Re: Circular Advertisement #741 — 40 — 1178, opened July 25, 1940
"Gentlemen:
"As per our telephone conversation of July 26th, we herewith confirm the extension of our acceptance period on the above circular advertisement to August 5, 1940.
"Very truly yours, "Lite Manufacturing Co. "A. Leitman, Prop."
Defendant's representative then informed Gardner, plaintiff's representative, that he would be awarded the contract whether or not they took into consideration the telegraphic modification of the bid, since either way plaintiff was the low bidder.
15. Before Gardner left the conference, Jervey prepared a telegram for Rock Island Arsenal, which was submitted to General Drewry before it was sent. Gardner was not shown this telegram, which was as follows:
"Reference circular advertisement No. UXX 741 — 40 — 1178, accept lowest bid of Lite Manufacturing Company for 428,045 helmet lining assemblies. With reference to accepting $100 reduction per thousand helmets, offered in Lite Company's telegram, received after opening bids, this matter will have to be decided by legal authorities and decision will be sent Rock Slxx Island Arsenal as early as possible. Letter from Lite Manufacturing Company, extending acceptance period to August 5, 1940, left in this office by representative, is being mailed Rock Island Arsenal this date
"Drewry, Lt. Col."
16. Gardner then left the conference, called Leitman in New York on the long distance telephone and reported on the results of the conference, in substance that the computations made showed plaintiff to be the low bidder at the $1,440 price. He did not at any time report to Leitman that the War Department officials had agreed to disregard the two telegrams of July 25, 1940.
17. On July 31, 1940, the following telegram was sent to plaintiff from Rock Island Arsenal:
"Recircular 40 — 1178 You are successful bidder 428,045 helmet linings stop This telegram constitutes your authority to proceed with manufacture on order 41 — 1525."
18. Between July 31 and August 10, 1940, six letters were written by plaintiff and his representatives to Rock Island Arsenal requesting information regarding details of the manufacture of helmet linings but no inquiry was made by plaintiff in any of these communications regarding the price at which the award had been made.
The plaintiff, Aleck Leitman, also personally visited Rock Island Arsenal between the dates of July 31 and August 10 and consulted with Mr. Curley there regarding the details of manufacture of the helmet linings. The subject of the contract price was discussed only casually between them.
19. On August 10, 1940, plaintiff received by mail from the Commanding Officer at Rock Island Arsenal a formal written contract for 428,045 helmet linings at the price of $1,340 per thousand.
The contract was returned unexecuted by plaintiff with a letter of August 13, 1940, which was as follows:
"Upon the receipt of your telegram in regard to the subject order, dated July 31, 1940, informing us that we were the successful bidder on the 428,045 Helmet Linings, and authorizing us to proceed with the manufacture on order no. 41 — 1525, we immediately took all steps necessary to manufacture and execute the order with all promptness and dispatch.
"We are now in receipt of Contract E741 — ORD — 5907 P.O. 41 — 1525, and notice that the contract price is $1,340.00 per M instead of $1,440.00 per M as per our regular bid submitted in response to Circular Advertisement. This, we presume, is due to our telegrams which you received after the set time for the opening of bids, and which were based on an error and miscalculation as it was explained by us to the authorities at Rock Island and Washington. The error was due to the fact that in rechecking our figures the morning before the opening of bids, we have erroneously assumed that we could cut complete leather linings from two (2) feet of leather. However, since then, we have definitely established that the least leather required for manufacturing a complete lining is 2¼ to 2 1/3 square feet. Your own experience in manufacturing these linings will, we are convinced, substantiate our claim. Our visit to Rock Island Arsenal to watch the manufacture of the helmet linings with a view towards a possible saving on labor costs, has convinced us beyond any doubt that our hopes to save on labor costs are doomed to disappointment.
"In view of the fact that these erroneous telegrams were received by you after the set time for the opening of bids, we believe that they should be disregarded as we have requested, and the contract should be based on the original bid submitted by us and opened at the regular time.
"We have placed orders for materials and are proceeding with the organization of the work, and will make deliveries promptly as per bid.
"Enclosed you will please find bond of performance, and we would ask you to be good enough to send us corrected contract as we are convinced that the modifying telegrams, having been based on error, and received by the government after the opening of bids when the regulations provide that such modifications could not be considered, ought to be disregarded in view of all the circumstances."
20. On August 15th the Commanding Officer of Rock Island Arsenal replied to plaintiff's letter, as follows:
"This will acknowledge receipt of your letter of August 13, with reference to the above-mentioned subject.
"In this connection, please note that during your representative's visit to this Arsenal, he was informed that the purchase order and contract covering the manufacture of these helmet linings would be written in accordance with the prices which your company quoted in your telegram. Your representative was further advised that it would be satisfactory for your company to submit to this Arsenal a letter (notarized, in quadruplicate), setting forth all details relative to the basis for the prices quoted in your telegram — this letter to be forwarded to Washington for proper action. Your representative was instructed that your company should take the above-mentioned action following completion of subject purchase order.
"Your acknowledgment of these instructions is requested."
Plaintiff replied on August 23rd as follows:
"We beg to acknowledge your letter of August 15, 1940, with reference to the above-mentioned subject. We note your statement that you had advised our representative that our company should submit to you a letter setting forth all details relative to the basis for the prices quoted in our telegrams, which will be forwarded to Washington, and that such action should be taken following completion of subject purchase order.
"We find it impracticable to follow the procedure outlined in your letter, because we would have difficulty in financing execution of the order if the settlement of the financial terms of the contract should be thus delayed. We have, therefore, sent our representative to Washington, in an endeavor to settle the terms of the contract definitely, now.
"The Contract Division of the Ordnance Department has advised us to transmit to the Chief of the Ordnance Department in Washington, all the papers in connection with this matter, so that it may be considered now, which action we are at present taking.
"We again beg to assure you that we are proceeding with the performance of the contract, and that there will be no delays in delivery dates."
21. Pursuant to plaintiff's letter of August 23rd, plaintiff then made efforts to obtain rulings from the Secretary of War and the Comptroller General of the United States that the true contract was based upon the original low bid of $1,440 per thousand and to secure a written contract at that figure. The Secretary of War was furnished with affidavits signed by Leitman, Gardner, and Gurwin dated August 28, 1940, about the facts of the case. By a letter dated September 27, 1940, the Secretary of War recommended that the contracting officer hold the plaintiff to the modified price and forwarded all papers to the Comptroller General for his decision.
On October 5th the Comptroller General issued a decision upon the statement of facts by the Secretary of War in his communication of September 27, 1940, holding that the amount to be paid to plaintiff for the contract work performed might not exceed the price in the original bid as reduced by the telegraphic modifications. This decision was based upon certain errors of fact in the Secretary of War's letter of September 27, 1940.
The matter was again submitted to the Comptroller General by the Secretary of War in a letter dated January 7, 1941, in which the Secretary corrected the errors in his original submission of the facts to the Comptroller General. On January 24, 1941, however, the Comptroller General affirmed his prior decision of October 5, 1940.
22. In the meantime plaintiff, without executing the formal written contract, had promptly entered upon the performance thereof, and up to December 31, 1940, had manufactured and delivered to defendant approximately 125,000 helmet linings. All such deliveries had been accompanied by invoices at $1,440 per thousand but no payment was made thereon.
About December 12, 1940, plaintiff telephoned the Arsenal regarding the delay in payments. On the same date, the following telegram was sent to plaintiff from the Arsenal:
"Retelephone conversation Ramsey Contract W741 — ORD — 5907, vouchers being held because incorrectly billed Stop Must have corrected voucher also signed copy of contract before payment can be made Wire."
Plaintiff thereupon endeavored to borrow money from the Title Guaranty and Trust Company of New York in order to finance his operations under the contract, but a loan was refused until the contract had been signed and deposited with them as security, and an assignment to them of the payments due and to become due thereunder had been executed by plaintiff and approved by defendant.
23. The formal contract, bearing its original date of July 31, 1940, and duly executed by plaintiff, was received at the Arsenal on January 20, 1941, there being attached thereto the following:
"This document is signed under protest. The Undersigned Contractor maintains that he has entered into a contract with the War Department, under which he is entitled to be paid for the helmet linings at the rate of $1,440.00 per thousand. This document, which purports to embody an agreement under which the Undersigned Contractor is to be paid for helmet linings at the rate of $1,340.00 per thousand, does not embody the true contract between the parties as it now exists.
"The Undersigned Contractor is attempting now, and has been attempting with all possible diligence, to obtain from the War Department and other departments and agencies of the Government, action in accordance with his said contention. Up to this time the Undersigned Contractor has been unsuccessful in obtaining such action, and is now forced to sign this document, which does not embody the true contract between the parties, solely because he must obtain the payment for goods already delivered. Those sums are essential for the completion of the balance of the work.
"The Undersigned Contractor has also attempted to obtain partial payments without the necessity of signing this document and has been refused on the ground that no payments can be made unless a contract is signed. It is for this reason alone that the Undersigned Contractor has signed this document, and in so doing, the Undersigned Contractor does not in any way abandon or in any other respect disqualify himself from claiming the amount believed legally due under the true contract between the parties — at the rate of $1,440.00 per thousand helmet linings."
At the time of the signing of the formal contract by plaintiff January 20, 1941, plaintiff had manufactured and delivered approximately 210,000 helmet linings.
24. After the contract had been executed the helmet linings that had been delivered prior to that time were rebilled at the rate of $1,340 per thousand and all subsequent invoices were billed in the same amount.
All invoices sent to Rock Island Arsenal after execution of the contract had attached to them a protest, with the exception of the invoice dated January 23, 1941. The protest intended to accompany that invoice was sent separately with a letter under date of January 30, 1941. The form of protest attached to the invoices read as follows:
"This voucher is signed and submitted under protest. The Contractor maintains that he has a contract with the War Department, under which he is entitled to charge at the rate of $1,440.00 per thousand helmet linings. In submitting this voucher and accepting payment in accordance therewith, the undersigned Contractor does not in any way waive, abandon, or in any other respect disqualify himself from claiming the amount believed legally due under the true contract between the parties — payment at the rate of $1,440.00 per thousand helmet linings, as more fully set forth in the statement of protest executed simultaneously with and attached to said contract."
25. Plaintiff fully performed the contract by the delivery of 428,045 helmet linings within the contract period and has been paid at the rate of $1,340 per thousand for all linings so delivered.
The difference between the value of 428,045 helmet linings at $1,440 per thousand and the same number at $1,340 per thousand is $42,804.50.
This is a suit for the recovery of the difference in the price at which plaintiff offered in writing to furnish an amount of helmet linings and the price at which he agreed to furnish them in subsequent telegrams, sent before the time for opening the bids, but received thereafter.
The defendant, through the Commanding Officer, Rock Island Arsenal, Illinois, invited bids for helmet linings in blocks of 50,000 up to 400,000 and an additional block of 100,000 for any amount that might be ordered between 400,000 and 500,000. Bids were to be opened at 9:00 a.m. on July 25, 1940.
On July 23, 1940, plaintiff submitted a bid of $1,690 per thousand for linings on quantities up to 50,000, the price being progressively lowered for blocks of 50,000 down to $1,440 per thousand for quantities amounting to between 400,000 and 500,000. In making this bid plaintiff had figured that it would require 2 1/3 feet of leather for each helmet lining. But early in the morning of the day the bids were to be opened plaintiff's representative made further calculations of the amount of leather necessary to be used, and having concluded that less than 2 1/3 feet per helmet would be required, he sent the Commanding Officer of the Rock Island Arsenal a telegram reducing all prices by $70.00 per thousand, and still later he sent another telegram reducing the prices by $100.00 per thousand.
The first telegram was sent at 9:19 a.m. Eastern Standard Time (8:19 a.m. Central Standard Time — Rock Island is on Central Time). The second telegram was sent at 9:31 a.m. Eastern Standard Time (8:31 a.m. Central Standard Time).
The first one was received in the office of the Postal Telegraph Company at Rock Island, Illinois at 8:35 a.m. Central Standard Time, and the second one was received at its office at 8:55 a.m. Central Standard Time. However, they were not received at the Rock Island Arsenal until 10:40 a.m. Central Standard Time, an hour and forty minutes after the time set for the opening of the bids.
Plaintiff arrived at his office at about 12:00 o'clock on the morning of July 25, 1940, when he learned of the sending of the telegrams. Two or three hours later he inquired at the Postal Telegraph office as to the time the telegrams had been delivered. The following day the telegraph company informed him that they had been delivered at 10:40 a.m. on July 25. On that day or the following day Leitman called the Rock Island Arsenal by long distance telephone and stated to Joseph Curley, the Chief of Procurement at the Arsenal, that he thought the telegrams had been sent in error, but that he assumed they would not be considered since they had arrived after the time for the opening of the bids. Curley told him that they probably would be considered since it appeared on the face of the bids that plaintiff was the low bidder, but that all papers had been sent to Washington for final determination of the low bidder and the question of whether or not the telegrams would be considered.
Plaintiff did not withdraw his telegraphic offer nor demand that they not be considered. However, he did send to Washington Arthur A. Gardner, his contact man with Government agencies. Gardner conferred with General Drewry and Frank J. Jervey, head Ordnance Engineer, and together they made computations to determine the low bidder. At this time Gardner made no demand that the telegrams be disregarded but after he had been advised that plaintiff's written bid was the lowest, he then said that the telegrams were based upon an erroneous calculation and that they had arrived after the time for the opening of the bids. He did not, however, even at this time, demand that they be disregarded. Instead, upon being advised by defendant's representatives that the two-day limit for acceptance of plaintiff's bid had expired and that, therefore, it was possible to reject all bids and readvertise, Gardner stated that plaintiff would prefer to run the risk of loss rather than to have a readvertisement. Gardner thereupon handed defendant's representative a letter signed by plaintiff, dated July 29, 1940, extending the period for acceptance until August 5, 1940.
Plaintiff's bid was accepted by telegram on July 31, 1940, and 428,045 helmet linings were ordered. The price to be paid was not stated in defendant's telegram because the Department in Washington had under consideration the question of whether or not plaintiff's telegrams should be considered.
On August 10, 1940, plaintiff received a formal written contract for 428,045 helmet linings at the price of $1,340.00 per thousand, which was the price stated in the last telegram. At no time prior thereto had plaintiff ever demanded that the telegrams be disregarded, although he had had several conferences with Curley, the Chief of Procurement at Rock Island, and, through his representative, with the Department in Washington. However, upon receipt of this contract plaintiff protested that his telegrams were based upon an error, that they had been received too late, and that the contract should be based upon the original bid. He stated, however, that he had placed his orders for materials and was proceeding to carry out the contract, but requested that a new contract based upon the prices stated in the original bid be sent to him for signature.
Defendant refused to modify the price and refused to pay plaintiff for deliveries until the original draft of the contract had been signed and vouchers based upon the prices stated therein should be submitted. Since plaintiff was unable to borrow the money to finance the carrying out of the contract, and in order to secure payment from the defendant for deliveries made, plaintiff on January 20, 1941, executed the contract upon the basis of the prices stated in the last telegram. He did this, however, under protest, claiming that he was entitled to a contract upon the basis of the prices stated in his original bid. Subsequent to the execution of the contract plaintiff submitted vouchers upon the basis of the prices stated therein, but all of these were submitted under protest.
Had there been no advertisement for bids in this case, but had the defendant asked only the plaintiff to submit an offer to furnish it with these helmet linings, and had plaintiff first submitted an offer in writing and then modified it by the two telegrams which he sent, there would be no doubt that plaintiff would have been obligated to furnish the linings at the price stated in the last telegram.
Plaintiff never withdrew the telegraphic modification of his bid. He allowed the offer to stand, without protest, until it had been determined that he was the low bidder anyway. Then, and only then, did his representative, whom he had sent to Washington, state that the offer made in the telegrams had been based upon a miscalculation. We have no doubt that plaintiff wanted the telegrams to be considered if this was necessary in order to make him the low bidder. Only when he learned that he was the low bidder did he intimate that he would like to have the telegrams disregarded, and, even then, when the suggestion was made that there might be a readvertisement, he did not demand that the telegrams be disregarded, but said he would prefer to run the risk of loss. His offer to furnish the helmet linings at the prices stated in the telegrams remained in effect up until the time that he was notified that he was the successful bidder and that the contract would be awarded to him. When he received this notification he still did not demand that the telegrams be disregarded, although he had been notified that they might be taken into consideration in determining the price to be paid. The offer remained in effect until accepted.
If plaintiff is to be relieved from the offer made in the telegrams, it is only because of the provision of a War Department regulation, which was included in the instructions to bidders. This reads as follows:
"Unless specifically authorized, telegraphic bids will not be considered, but modifications by telegraph of bids already submitted will be considered if received prior to the hour set for opening."
Manifestly, the reason for the condition placed upon the consideration of a telegraphic modification was to put all bidders on an equal basis and to prevent any bidder from obtaining an advantage over others by permitting him to modify his bid after securing information as to other bids submitted. United States v. Brookridge Farm, 10 Cir., 111 F.2d 461, 463; 21 Op. A.G. 547-548. Therefore, where the bid submitted in time is the low bid, the reason for the rule against considering telegraphic modifications of it after the time for the opening of the bids does not exist, and in such case the rule should not be applied.
The limitation on the consideration of telegraphic modifications was not for plaintiff's benefit but to prevent plaintiff from obtaining an unfair advantage. If defendant, therefore, elects to consider a telegraphic modification received after the time for the opening of the bids, plaintiff cannot complain, nor can the other bidders, because plaintiff was already the low bidder.
There can be no possible reason why a low bidder cannot voluntarily decrease the amount of his bid. Plaintiff did decrease the amount of his bid before he had any information as to other bids submitted, and even after he learned that he was the low bidder he did not withdraw his offer. Even when he was advised that the time for acceptance of his offer had expired, and when, therefore, he could have withdrawn his bid with impunity, he did not do so, but extended the time for acceptance so as to make it a binding offer.
Plaintiff's defense that there was a mistake in his calculations, upon the basis of which the telegrams were sent, cannot be sustained. No showing whatsoever was made to support his statement that there had been a miscalculation.
Plaintiff's offer to furnish the linings at the prices stated in his last telegram remained in full force and effect until accepted by the defendant; plaintiff, therefore, was bound to furnish the linings at the price stated therein. He has been paid this price and, therefore, is not entitled to recover. His petition will be dismissed. It is so ordered.
WHALEY, Chief Justice, and MADDEN and LITTLETON, Judges, concur.
JONES, Judge, took no part in the decision of this case.