Board of Contract Appeals General Services Administration Washington, D.C. 20405 _______________________________________________ DENIED: October 1, 1998 _____________________________________________ GSBCA 14502 RONALD L. DUVALL, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Ronald L. Duvall, pro se, Merritt Island, FL. George U. Lane, Office of Regional Counsel, General Services Administration, Atlanta, GA, counsel for Respondent. Before Board Judges BORWICK, NEILL, and GOODMAN. BORWICK, Board Judge. Mr. Ronald L. Duvall (appellant or Mr. Duvall), a purchaser at an auction of Government vehicles, thought he had bought a Chevrolet Corvette when he actually purchased a truck from respondent, the General Services Administration. After realizing his mistake, he wrote the Government and sought rescission of the contract. The contracting officer denied appellant's claim of mistake and advised him to either pay for and pick up the truck or pay liquidated damages as provided by the contract. Appellant refused to complete the transaction and the contracting officer assessed liquidated damages of $1400. Appellant timely appealed the contracting officer's decision. The parties submitted their dispute on the record pursuant to Rule 111. We deny the appeal as appellant has not established the existence of a mistake for which the law will grant rescission. Findings of Fact On November 4, 1997, GSA held an automobile auction, sale number 4KFBPS98012. The sale was subject to the terms and conditions of GSA Standard Form 114C, which provided in pertinent part: 6. PAYMENT. The Purchaser agrees to pay for property awarded to him in accordance with the prices quoted in his bid. Subject to any adjustment made pursuant to other provisions of this contract, payment of the full purchase price, after applying the total bid deposit, if any, must be made within the time specified in the Invitation and prior to delivery of any of the property. . . . . 9. DEFAULT If, after award, the Purchaser breaches the contract by failure to make payment within the time allowed by the contract as required by Condition [number] 6, or by failure to remove the property as required by Condition [number] 8, then the Government may send the Purchaser a 15-day written notice of default (calculated from the date of mailing), and upon Purchaser's failure to cure such default within that period (or such further period as the Contracting Officer may allow) the Purchaser shall lose all right, title, and interest which he might otherwise have acquired in and to such property as to which a default has occurred. The Purchaser agrees that in the event he fails to pay for the property or remove the same within the prescribed period(s) of time, the Government shall be entitled to retain (or collect) as liquidated damages a sum equal to the greater of (a) 20 percent of the purchase price of the item as to which the default has occurred, or (b) $25, or the purchase price of such item(s) if the purchase price is less than $25. . . . Provided further That the maximum sum which may be recovered by the Government as damages for failure of the Purchaser to pay for and remove the property shall be the formula amount. The Government shall specifically apprise the purchaser, either in its original notice of default (or in separate subsequent written notice), that upon the expiration of the period prescribed for curing the default), the formula amount will be retained (or collected) by the Government as liquidated damages. . . . . 16. ORAL STATEMENTS AND MODIFICATIONS Any oral statement or representation by any representative of the Government, changing or supplementing the Invitation or contract or any Condition thereof, is unauthorized and shall confer no right upon the Bidder or Purchaser. Appeal File, Exhibit 1. The GSA Listing and Provisions of Auction Sale, also applicable to this auction, provided in pertinent part: If you are the successful bidder, a runner will come to you and have you sign a bid card. We will have already placed the item [number] and bid price. We will ask you for your registration [number]. If you have any questions or problems with that purchase proclaim them immediately before you sign the card. Once you have signed the card, you have bound yourself to a contract between yourself and the [United States] Government. It is the bidder's responsibility to pay attention to what item is being sold. Appeal File, Exhibit 3 (emphasis added). The Government listed 109 vehicles for auction, including the car listed as number fifty-one, a 1981 Chevrolet Corvette, vehicle identification number (VIN) 1G1AY8769BS414755. Appeal File, Exhibit 3. As explained by Mr. Duvall, he and a friend arrived at the auction at 10:30 a.m. and walked around the outside the lot inspecting the vehicles. Statement of Ronald Duvall (Duvall Statement) (May 24, 1998) at 1. He saw a red Corvette and mentioned to his friend that he would like to bid on it. Id. Mr. Duvall approached an individual who identified himself as the lot manager. Id. The lot manager was sitting with a golf cart away from a tent in which the auction was being held. Id. at 1- 2. Mr. Duvall asked whether the Corvette had been sold. According to Mr. Duvall, the lot manager replied that "they are bidding on it right now so you better get over there if you want to bid." Mr. Duvall "went over to the tent and as he [the auctioneer] called out the price I held up my hand. Finally I was the last bidder and I got it." Id. at 2. Mr. Duvall, unfortunately, had not purchased the vehicle he thought he had purchased. The vehicle on which Mr. Duvall had bid was not item fifty-one--the Corvette--but item fifty--a 1989 Ford F-150 4x4 Lariat Truck, VIN number IFTEF14HXKNA67673. Appeal File, Exhibit 3. Before commencing the auction on the truck, the auctioneer had accurately described both the item number fifty--and the manufacturer and model of truck. Id., Exhibit 6 (audio tape of auction). Bidding for that item opened at $3000 and progressed incrementally to $6950, when appellant submitted his high bid of $7000. Id. After the auctioneer declared the item sold to appellant, the auctioneer reminded appellant to sign his bid card, which contained the item number fifty--but not the item description--and the amount bid. Appellant did so. Id., Exhibits 4, 6. Appellant then went to sit in the Corvette he thought he had purchased. Mr. Duvall describes what happened next: [T]hen another man came up and I asked him for the keys; he said I just bought that car [and] would you please get out of it. I then handed him my papers to show that I had bought it myself and he laughed[.] [H]e said look at the [item] number[--]you got the monster truck not the Corvette. Duvall Statement at 2. The day of the auction, appellant wrote GSA, explained his mistake, and requested that the Government "negate my bid. Erroneous as it was, it was a completely honest mistake on my part. I accept full responsibility for this but ask that you please work with me on getting a full release of liability from this." Appeal File, Exhibit 7. On January 6, 1998, the contracting officer denied appellant's claim of mistake and advised appellant that unless he paid the bid price and removed the truck by January 16, the Government would terminate the contract and assess appellant liquidated damages of $1400. Id., Exhibit 8. Appellant did not pay the bid price or remove the truck, consequently, on January 20, the contracting officer issued her decision terminating the contract and assessing appellant $1400 in liquidated damages.[foot #] 1 This appeal followed. Discussion Here, appellant does not dispute that he defaulted on his contract; the evidence is clear that he did. Appellant failed both to pay the bid price for, and to take possession of, the truck. Appellant argues that he made a mistake and that the mistake was due to the lot manager's erroneous statement to him that the Chevrolet Corvette was being auctioned. Duvall Statement at 3. While we sympathize with appellant's situation, under these circumstances, the law does not permit us to grant him rescission of the contract. The applicable provision of the Federal Property Management Regulations provides: Mistakes disclosed after award. ----------- FOOTNOTE BEGINS --------- [foot #] 1 The Government represents that in March 1998 it resold the truck for $5900. ----------- FOOTNOTE ENDS ----------- (a) When a mistake in bid is not discovered until after the award, the mistake may be corrected by supplemental agreement if correcting the mistake would make the contract more favorable to the Government without changing the essential requirements of the contract. (b) In addition to the cases contemplated in 101- 45.804(a), heads of executive agencies are authorized, under the circumstances set forth in 101-45.804(c), to make the administrative determinations described below in connection with mistakes in bids alleged or disclosed after award. This authority is in addition to that provided by Pub. L. 85-804 (50 U.S.C. 1431- 1435) or that which may be otherwise available. (1) A contract may be rescinded in its entirety where the original total contract amount does not exceed $10,000. (2) A contract, irrespective of amount, may be reformed (i) by deleting the item or items involved in the mistake where the deletion does not reduce the contract amount by more than $10,000; or (ii) by decreasing the price where the resultant decrease in price does not exceed $10,000 and the reformed contract price is not less than that of the otherwise next high bid under the original invitation for bids. (c) Determinations under 101-45.804(b) may be made only on the basis of clear and convincing evidence that a mistake in bid was made, and either that the mistake was mutual or that the unilateral mistake made by the purchaser was so apparent as to have charged the sales contracting officer with notice of the probability of the mistake. If the evidence does not warrant a determination under paragraph (b)(1) or (2) of this 101-45.804, determination may be made that no change shall be made in the contract as awarded. (d) Heads of executive agencies may delegate to one central authority in their agencies, without power of redelegation, authority to make the determinations under this 101-45.804. (e) Each proposed determination shall be approved by the agency's General Counsel, Deputy or Associate General Counsel, an Assistant General Counsel, or other comparable legal officer. (f) Mistakes disclosed after award shall be processed as follows: (1) Whenever a mistake in bid is alleged or disclosed after award, the sales contracting officer shall advise the purchaser to support the alleged error by written statements and by all pertinent evidence, such as the purchaser's file copy of the bid, his original worksheets and other data used in preparing the bid, and any other evidence which will serve to establish the mistake, the manner in which it occurred, and the bid actually intended. (2) Where the purchaser furnishes evidence in support of an alleged mistake, the case shall be referred to the appropriate authority together with the following data: (i) All evidence furnished by the purchaser. (ii) A copy of the contract, including a copy of the bid. (iii) An abstract or record of the bids received. (iv) A written statement by the sales contracting officer setting forth (a) Specific information as to how and when the mistake was alleged or disclosed; (b) A summary of the evidence submitted by the purchaser; (c) His opinion whether a bona fide mistake was made in the bid and whether he was, or should have been, on constructive notice of the mistake before the award, together with the reasons or data upon which his opinion is based; (d) Most recent contract price for a like item(s) involved, when sold, in what quantity, relative condition, etc.; (e) Any additional evidence considered pertinent, including copies of all relevant correspondence between the sales contracting officer and the purchaser concerning the alleged mistake; (f) The course of action with respect to the alleged mistake that the sales contracting officer considers proper on the basis of the evidence; and (g) The status of performance and payments under the contract, including contemplated performance and payments. (g) Nothing contained in this 101-45.804 shall deprive the Comptroller General of his statutory right to question the correctness of any administrative determination made hereunder nor deprive any purchaser of his right to have the matter determined by the Comptroller General should he so request. (h) Each agency shall maintain records of all administrative determinations made in accordance with this 101-45.804, the facts involved, and the action taken in each case. A copy of the determination shall be attached to each copy of any contract rescission or reformation resulting therefrom. (i) Where administrative determination is precluded by the limitations set forth in this section, the matter will be submitted to the Comptroller General for decision in accordance with agency procedures. (j) Nothing contained in this 101-45.804 prevents an agency from submitting doubtful cases to the Comptroller General. 41 CFR 101-45.804 (1997). Here, there was no mutual mistake, as the auctioneer accurately described the item before the start of the bidding. Appellant made a unilateral mistake in misidentifying the auctioned item, but appellant has not established that the sales contracting officer should have been aware of the mistake. The course of bidding would not have given the auctioneer or the sales contracting officer any indication that appellant thought he was bidding on a sports car when he was bidding on a truck. The bidding for the truck proceeded in unremarkable increments and appellant's high bid of $7000 was only fifty dollars higher than the next highest bid. Further, while appellant made a mistake in the layperson's sense, appellant has not shown a mistake that the law recognizes. A mistake justifying rescission of a contract must be a clear-cut clerical or mathematical error, or a misreading of the specifications, not a mistake in judgment. McClure Electrical Constructors v. Dalton, 132 F.3d 709, 711 (Fed. Cir. 1997); Paulos Land Co. v. General Services Administration, GSBCA 14093, et al., 98-1 BCA 29,570. Here, appellant exercised bad judgment by placing a bid without ascertaining the item being auctioned, a precaution that the invitation for bids explicitly offered to appellant. The lot manager's oral statement does not bind the Government. Appellant has not shown that the lot manager was even in a position physically to know what item was up for auction at a particular moment, since the auction was conducted under a tent--"over there"--as Mr. Duvall quotes the lot manager, and the lot manager was outside the tent. Appellant has not shown that the lot manager possessed the authority to identify or to control the vehicles to be auctioned. Appellant has not therefore proved that his reliance on the lot manager's supposition was reasonable. Also, the invitation for bids provided that oral statements of Government representatives changing or supplementing the contract conferred no right on purchasers. The lot manager's oral statement could not change the item being auctioned or negate appellant's contractual responsibility "to pay for property awarded to him in accordance with the prices quoted in his bid." Finally, the contracting officer assessed the liquidated damages allowed by the default clause of the contract. The appeal must therefore be denied. Decision The appeal is DENIED. ____________________________ ANTHONY S. BORWICK Board Judge We concur: ___________________________ ____________________________ EDWIN B. NEILL ALLAN H. GOODMAN Board Judge Board Judge