before serving as an officer. In view of the fact that this question is currently before the Military Pay and Allowance Committee for consideration, a decision clarifying this matter is requested.

Section 207 of the Career Compensation Act of 1949, 63 Stat. 811, as amended, 37 U.S.C. 238, provides in part that:

(a) Members of the uniformed services who enlist under the conditions set forth in subsection (b) of this section within three months from the date of their discharge or separation, or within such lesser period of time as the Secretary concerned may determine from time to time, shall be paid a lump-sum reenlistment bonus of $40, $90, $160, $250, or $360 upon enlistment for a period of two, three, four, five, or six years, respectively; and, upon enlistment for an unspecified period of time amounting to more than six years a lump sum reenlistment bonus of $360 shall be paid. ***

(b) For the purpose of payment of the reenlistment bonus authorized by subsection (a) of this section, enlistment in one of the Regular services following (1) compulsory or voluntary active duty in such service, or (2) extended active duty of one year or more in a Reserve component of such service, shall be considered a reenlistment.

(d) Notwithstanding the provisions of subsection (a) of this section, a member of the uniformed services who reenlists within three months after being discharged from the enlistment entered into prior to the date of enactment of this Act, or who reenlists within three months after being relieved from active service as a commissioned officer or warrant officer under appointment made prior to the date of enactment of this Act if such commissioned or warrant service immediately followed enlisted service, shall be entitled to receive either (1) enlistment allowances in the amount and under the provisions of law in effect immediately prior to the date of enactment of this Act, or (2) reenlistment bonus in the amount and under the provisions of this section, whichever is the greater amount: Provided, That the enlistment allowance payable under (1) hereunder shall in no event exceed $300.

The act of July 16, 1954, 68 Stat. 488, which added section 208 to the 1949 act, as amended, also redesignated subsection 207 (e), 37 U.S.C. 238 (e), as subsection 207 (f), 37 U.S.C. 238 (f), and added a new subsection 207 (e) in part as follows:

(e) This section does not apply to

(1) any person who originally enlists in a uniformed service after the date of enactment of this amendatory Act: ***

It will be noted that under the provisions of subsection 207 (e) (1), 37 U.S.C. 238(e) (1), section 207 does not apply to any person who originally enlists in a uniformed service after July 16, 1954. Hence, it seems clear that a former officer who has not had prior enlisted service in the uniformed service in which he enlists and who enlists after July 16, 1954, would be entering into an original enlistment and could not qualify under section 207 for a reenlistment bonus.

With regard to the payment of a reenlistment bonus under section 207(a), 37 U.S.C. 238 (a), to former officers who enlisted on or prior to July 16, 1954, it may be observed that the term "reenlistment" long has had a definite and accepted meaning, unless otherwise defined by statute, as signifying a reentry by an enlisted man, under a contract of enlistment, into the same branch of the regular service from which

discharged. 27 Comp. Dec. 170; 28 Comp. Gen. 460. Nothing has been found in the legislative history of section 207 to indicate any legislative intention that the bonus would be payable to former officers who enlist, except those qualifying under subsection (d). It is noted, however, that subsection 207(a) provides for payment of the bonus to "members" of the uniformed services who enlist within the specified period after discharge or separation and under the conditions set forth in subsection (b), 37 U.S.C. 238(b). That subsection provides that for the purpose of payment of the bonus, enlistment in one of the regular services following "(1) compulsory or voluntary active duty in such service, or (2) extended active duty of one year or more in a Reserve component of such service, shall be considered a reenlistment." Subsection (a) does not specifically restrict or limit the payment of the bonus to former enlisted members who enlist, nor does subsection (b) provide that the qualifying service there specified must have been rendered in an enlisted status or have been preceded by enlisted service.

There has been obtained informally a copy of an opinion rendered on September 5, 1951, file JAGO 1961/5505, by The Judge Advocate General, Department of the Army. That opinion involved a member who served on active duty as a nonregular officer from December 23, 1939, to December 15, 1949, when he was released as a major. The following day he enlisted as a master sergeant and, since his officer service had not been immediately preceded by enlisted service, he could not qualify under subsection 207 (d) for an enlistment allowance or a reenlistment bonus. It was concluded that the enlistment of December 16, 1949, constituted a reenlistment within the provisions of subsection 207 (b), and it is understood that on the basis of that opinion former officers who have enlisted under similar circumstances have been paid a reenlistment bonus.

While the matter is not entirely free from doubt, in view of the broad language used in subsection 207 (a) and (b), as indicated above, and the administrative construction that appears to have been placed on those sections, we will not question bonus payments otherwise correct that have been made to former officers who enlisted on or prior to July 16, 1954, even though their officer service was not preceded by enlisted service. However, as stated above, subsection 207 (e) (1) precludes the payment of a bonus under section 207 to a former officer who enlists after that date unless he has previously served as an enlisted man in the service in which he enlists. Cf. 28 Comp. Gen. 460. There is no requirement, however, that such enlisted service must have been immediately prior to the service as an officer. The question presented is answered accordingly.

[B-139757]

Contracts-Mistakes-Contracting Officer's Error Detec

tion Duty-Notice of Error

The duty of the contracting officer with respect to notice of the probability of errors in bids where the range of bid prices is not great and there is nothing apparent on the low bid to indicate error does not include a requirement that the bid prices be compared with prices of prior procurements especially where the quantities varied substantially from the present procurement or that the prices be compared with wholesale price indices and, therefore, a contractor who after award alleges an error due to a faulty adding machine and failure to include an item from the bill of materials is regarded as having made a unilateral error for which relief may not be granted.

To the Secretary of the Army, July 15, 1959:

Reference is made to a letter dated May 29, 1959, with enclosures, from the Deputy Assistant Secretary of the Army (Logistics), requesting our decision as to the action to be taken concerning an error the Electronics Division of Globe Industries, Inc., alleges it made in its bid upon which contract No. DA-36-039-SC-76813 was based.

The Signal Supply Agency by invitation for bids No. SC-36-03959-1078-C2 requested bids-to be opened on January 12, 1959-for furnishing 750 PP-34 ( )/MSM Rectifier Power Units. In response thereto, Globe submitted a bid offering to furnish the rectifiers at a price of $223.97 per unit. Seven of the other 13 bids received for the unit were as follows:

The bid of Globe was accepted on January 29, 1959, at the price stipulated therein. On January 30, 1959, or prior to receipt of the notice of award by the contractor on February 2, 1959, a representative of the contractor orally contacted the contracting officer to advise him of an error in its bid. It is reported that on February 9, 1959, the contractor orally advised the contracting officer that although the cost ($23.62) of a magnetic contactor was erroneously omitted from its bid, the cost of such component would be absorbed and that the contract would be performed as written. In letter dated February 11, 1959, the contractor advised that, in addition to the mistake it made in omitting the cost of the magnetic contactor, it had discovered that the adding machine used was mechanically defective and totaled $37.82 less than it should have, had it not been defective.

In an affidavit dated June 8, 1959, the contractor's representative made the following statement:

At approximately 8:26 A.M., January 30, 1959, I received a telephone call from Mr. Bernard David, the Plant Manager of the Electronics Division of Globe, located at Belleville, New Jersey. Mr. David called me at my home and told me that Globe had made an error in its bid in that a specific component, a magnetic contractor, costing approximately $24.00 per unit, had been omitted from its bid calculation. Mr. David asked me to immediately contact the Contracting Officer, Captain Abrams, and inform him that Globe's bid was erroneous in that a serious mistake had been made. He instructed me to initiate any steps which were necessary to rectify this situation.

As a result of this telephone conversation I proceeded to the office of the U.S. Signal Supply Agency in Philadelphia and at approximately 11:30 A.M., met with Captain Abrams, who was the Contracting Officer. I informed him that Globe had made a serious mistake in its bid and wished to take the action necessary to rectify this situation. Captain Abrams, as soon as I mentioned that Globe had made a mistake in its bid stated to me that it was unfortunate from Globe's point of view that Globe had not been aware of its error earlier because the Notice of Award already had been issued. He stated that as a result Globe could not proceed in accordance with the rules relating to mistakes in bid raised prior to award, but would be required, if it desired to do so, to proceed in accordance with the rules relating to mistakes in bid raised after award. I told Captain Abrams that the mistake which had been called to my attention was the omission of a major component from the bill of materials, namely, a magnetic contactor, which cost approximately $24.00. He told me, as a result of my inquiry, that since the award had been made the only thing that Globe could do would be to write a letter setting forth the mistake and related circumstances and request whatever relief Globe thought was appropriate. He stated that this request would be processed in accordance with normal procedure.

By letter of February 11, 1959, the contractor requested that the contract price be increased by $61.44 per unit or a total of $46,080 because of error in bid. In letter of June 5, 1959, it is stated that the error per unit was $53.25 rather than $61.44. Specifically, these errors relate to an arithmetical mistake caused by a faulty adding machine which yielded a bill of materials total of $164.88 rather than $194.51 per item and the omission of the cost of the magnetic contactor ($23.62) from the bill of materials.

The contracting officer has reported that the evidence submitted by Globe to substantiate its claim of error is not convincing, especially since the adding machine tapes furnished to show the mathematical error were prepared subsequent to award. It is further reported by the contracting officer that the range of bids received and the prices paid under previous procurements did not place him on notice of probable error.

The only question for consideration here is not whether an error was made in the bid as alleged, but whether a valid and binding contract was consumated by the acceptance of the bid. There was nothing in the bid of Globe to indicate an error therein and the administrative office has reported that no allegation of error was made until after the award. Moreover, the evidence submitted in the form of adding machine tapes and bill of materials, together with the other evi

dence of record, does not warrant the relief claimed. Neither did there exist such a difference in bid prices received under the invitation as to have placed the contracting officer on notice of the probability of error. The fact that this type of rectifier was procured in prior years at unit prices somewhat in excess of Globe's unit bid price is not significant since those quantities varied substantially from the present procurement. In any event, we do not believe that knowledge of price differences as may have existed with respect to prior procurements should be imputed to a contracting officer in evaluating bids in a situation such as here involved where the spread of bid prices would not have put him on notice of probability of error. Also, we cannot agree with the attorneys for Globe that the contracting officer should have been on notice of the wholesale price indices on materials and labor in determining the lowest responsible bidder. It would be entirely unreasonable to impose a duty on a contracting officer to verify prices against price indices to assure for himself that the bidders have submitted cost plus a profit bid prices. This is clearly a responsibility of the individual bidders which may not be shifted to the Government under competitive bidding procedures. See 25 Comp. Gen. 536; 28 id. 527; Grymes v. Sanders, et al., 93 U.S. 55.

Such errors as were made were due solely to the negligence of Globe and were not induced or contributed to by the Government. Hence, the errors were unilateral-not mutual-and do not entitle Globe to relief. See Ogden & Dougherty v. United States, 102 C. Cls. 249, 259; Saligman, et al. v. United States, 56 F. Supp. 505, 507.

Accordingly, no legal basis exists for the allowance of any amount in excess of the price stated in contract No. DA-36–039–SC-76813.

[B-139877]

Contracts-Awards-Labor Surplus Areas-Precedence of Bidders-Freight Cost Inclusion

In establishing the order of precedence of bids for award of portions of a procurement set-aside for bidders in labor surplus areas, eligible bidders should first be ranked in the order in which they would be considered for award on the non-set-aside portion, and, when the low responsible bid for the non-setaside portion under an invitation which solicited bids on an f.o.b. contractor's plant or nearest shipping point basis is determined on the basis of the delivered cost rather than the net price, the freight costs should also be considered in determining the order of precedence for negotiation of the set-aside portions. To the Secretary of the Air Force, July 15, 1959:

We refer to a letter of June 29, 1959, with enclosures, signed by the Assistant Deputy for Procurement and Production, relative to questions raised by the protest of Irving Air Chute Company, Inc., in connection with contracts to be negotiated with qualifying firms in labor