McClure Electrical Constructors, Inc. v. Dalton

The United States Navy (defendant) solicited bids for a contract to build an electrical substation at a Kentucky naval center. McClure Electrical Constructors, Inc. (McClure) (plaintiff) submitted the lowest-price bid out of eight bidders. However, McClure’s bid was approximately $16,000 lower than intended due to a calculation mistake McClure’s president made when preparing the bid worksheet. The navy’s contracting officer noticed that McClure’s bid was not only substantially lower than the navy’s estimate for the project, but that it was also substantially lower than all other submitted bids. Concerned there was a mistake, the contracting officer asked McClure to verify its bid for possible errors or omissions. The contracting officer did not explicitly state that they suspected McClure’s bid price was a mistake; however, the contracting officer sent McClure an abstract showing the government’s estimate and the other submitted bids in comparison to McClure’s substantially lower bid. McClure’s president reviewed the bid and confirmed it was correct. However, after completing the Navy contract and noticing that McClure ended the project at a loss, McClure’s vice-president reviewed the project file and discovered the calculation error. McClure asked the contracting officer to reform the contract to correct McClure’s unilateral pricing mistake. The contracting officer refused. McClure appealed to the Armed Services Board of Contract Appeals (Board), arguing that the contracting officer’s verification request was inadequate because the contracting officer failed to specify the suspected mistake. The Board affirmed the reformation denial. McClure appealed to the Federal Circuit.