B-180329, OCT 1, 1974

B-180329, OCT 1, 1974

CONTRACTOR'S CLAIM FOR MISTAKE ON WATER DISTILLER ITEM, WHICH SHOULD HAVE READ $6,500 RATHER THAN $650, IN ITS 28 PAGE COST PROPOSAL CONTAINING OVER 530 ITEMS, FOR SOLE-SOURCE NEGOTIATED CONSTRUCTION PROCUREMENT IN WHICH AWARD WAS MADE IN AGGREGATE IS DENIED, SINCE GAO CANNOT CONCLUDE THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR.

TITAN ENVIRONMENTAL CONSTRUCTION SYSTEMS, INC.:

COUNSEL FOR TITAN ENVIRONMENTAL CONSTRUCTION SYSTEMS, INC. (TITAN), HAS REQUESTED RECONSIDERATION OF DECISION B-180329, FEBRUARY 12, 1974, WHICH DENIED TITAN'S REQUEST THAT ITS SOLE-SOURCE NEGOTIATED CONTRACT V101C-25 WITH THE OFFICE OF CONSTRUCTION, VETERANS ADMINISTRATION (VA), TO DESIGN AND CONSTRUCT AN OUTPATIENT CLINIC AS AN ADDITION TO THE EXISTING VA HOSPITAL IN DURHAM, NORTH CAROLINA, BE REFORMED TO CORRECT AN ALLEGED MISTAKE IN ITS PROPOSAL PRICE.

ON APRIL 4, 1972, TITAN WAS INITIALLY REQUESTED TO PERFORM THE WORK ON THIS PROJECT. THE SCOPE OF WORK ON THE PROJECT INCLUDED A DISTILLED WATER SYSTEM TO BE SUPPLIED IN ACCORDANCE WITH VA SPECIFICATIONS VS-629 AND VS- 630. ON APRIL 24, 1974, TITAN WAS GIVEN DRAWINGS FOR THE PROJECT WHICH SHOWED THIS DISTILLED WATER SYSTEM. ON MAY 5, 1972, TITAN WAS GIVEN THE DETAILED REQUIREMENTS FOR THE VS-629 AND VS-630 EQUIPMENT. ON MAY 18, 1972, TITAN SUBMITTED WORKING DRAWINGS AND SPECIFICATIONS TO VA FOR TECHNICAL REVIEW, WHICH SHOWED THE VS-629 AND VS-630 EQUIPMENT. THIS MATERIAL WAS REVIEWED BY VA'S DESIGN REVIEW STAFF AND REVISED DRAWINGS WERE RESUBMITTED FOR TECHNICAL APPROVAL ON JUNE 13, 1972. ON JUNE 22, 1972, TITAN SUBMITTED ITS CERTIFIED COST PROPOSAL FOR THE PROJECT CONSISTING OF 28 PAGES OF DETAILED COST DATA WITH OVER 530 INDIVIDUAL ITEMS LISTED. DIVISION 11 OF THE COST PROPOSAL COVERING "EQUIPMENT" SHOWED THE DISTILLED WATER SYSTEM, WHICH WAS LISTED AT $650.

THE COST PROPOSAL WAS REVIEWED BY VA COST ESTIMATORS IN ORDER TO PREPARE FOR COST NEGOTIATIONS WITH TITAN. IN REVIEWING THE PROPOSAL, THE ESTIMATORS APPARENTLY LOOKED AT EACH COST ITEM TO ASCERTAIN WHETHER THEY THOUGHT TITAN'S ESTIMATED COST FOR THE ITEM EXCEEDED THE ESTIMATORS' ESTIMATED COST, AND, IF SUCH WAS THE CASE, IT WAS MARKED FOR COST NEGOTIATIONS.

THE OFFICE OF CONSTRUCTION HAS PROCURED NUMEROUS VS-629 AND VS-630 DISTILLER UNITS SIMILAR TO THE ONE REQUIRED UNDER THIS CONTRACT FOR USE IN OTHER VA HOSPITALS. HOWEVER, THIS EQUIPMENT WAS USUALLY PURCHASED BY THE OFFICE OF CONSTRUCTION UNDER AN INVITATION FOR BIDS AS ONE ITEM IN A LARGE CONSTRUCTION PROJECT, AND, THEREFORE, NO DETAILED COST BREAKDOWN WAS REQUIRED.

ON JUNE 26, 1972, TITAN ENTERED INTO COST NEGOTIATIONS WITH VA DURING WHICH MANY INDIVIDUAL COST ITEMS WERE DISCUSSED, ALTHOUGH THE VS-629 AND VS-630 EQUIPMENT APPARENTLY WAS NOT MENTIONED. THESE NEGOTIATIONS WERE COMPLETED ON JUNE 29, 1972, AND ON JUNE 30, 1972, THE CONTRACT FOR THE PROJECT WAS EXECUTED IN THE AMOUNT OF $2,177,400.

BY LETTER DATED APRIL 13, 1973, TITAN FIRST CLAIMED THAT IT MADE A TYPOGRAPHICAL ERROR IN ITS COST PROPOSAL AND THE PRICE FOR THE DISTILLED WATER SYSTEM SHOULD HAVE READ $6,500. TITAN REQUESTED RELIEF FROM THE CONSEQUENCES OF ITS ALLEGED MISTAKE.

TITAN CONTENDS THAT ITS MISTAKE IN THE COST PROPOSAL WAS OBVIOUS AND EASILY ASCERTAINABLE, SO THAT VA SHOULD HAVE NOTICED THE POSSIBILITY OF ERROR AND REQUESTED VERIFICATION OF THE $650 OFFERED PRICE FOR THE DISTILLER EQUIPMENT. IN THIS REGARD, TITAN NOTES THAT VA SPECIFIED THE PARTICULAR DISTILLER EQUIPMENT IT WANTED AND HAD PRIOR KNOWLEDGE OF THE EQUIPMENT AND ITS MARKET PRICE. ALSO, TITAN NOTES THE COST ITEMS IN DIVISION 11 OF TITAN'S PROPOSAL WERE SEPARATED, SO THAT THE AMOUNT PROPOSED FOR THE DISTILLER EQUIPMENT OFFERED BY TITAN WAS EASILY ASCERTAINABLE. FURTHERMORE, VA DID IN FACT REVIEW TITAN'S COST PROPOSAL PRIOR TO ENTERING INTO THE COST NEGOTIATIONS, DURING WHICH THE DISTILLER EQUIPMENT WAS NOT MENTIONED, AND VA DETERMINED WHICH OF THE COST ITEMS WOULD BE NEGOTIATED. TITAN CONCLUDES THAT BASED UPON THESE FACTS, ITS CLAIM SHOULD BE ALLOWED.

IT IS CLEAR THAT WHERE A BIDDER OR OFFEROR HAS MADE A MISTAKE IN ITS BID OR OFFER THAT WAS NEITHER INDUCED NOR SHARED BY THE GOVERNMENT, THE BIDDER OR OFFEROR MUST BEAR THE CONSEQUENCES OF ITS MISTAKE, UNLESS THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. SALIGMAN V. UNITED STATES, 56 F. SUPP. 505 (E.D. PA. 1944); WENDER PRESSES, INC. V. UNITED STATES, 170 CT. CL. 483 (1965); 48 COMP. GEN. 672 (1969). CONSTRUCTIVE NOTICE IS SAID TO EXIST WHEN THE CONTRACTING OFFICER, CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF A CASE, SHOULD HAVE KNOWN OF THE POSSIBILITY OF AN ERROR. 44 COMP. GEN. 383, 386 (1965); 53 COMP. GEN. 30, 31 (1973). A CONTRACTING OFFICER CAN BE SAID TO BE ON CONSTRUCTIVE NOTICE WHERE AN ITEM'S OFFERED PRICE IS OBVIOUSLY DISPROPORTIONATE TO THE PROCURED ARTICLE'S KNOWN VALUE. WENDER PRESSES INC. V. UNITED STATES, SUPRA; 49 COMP. GEN. 199 (1969); B-176002, JUNE 7, 1972. HOWEVER, AS A GENERAL RULE, A CONTRACTING OFFICER HAS NO OBLIGATION TO COMPARE PRICES ON INDIVIDUAL ITEMS WHERE AWARD IS TO BE MADE IN THE AGGREGATE, AS WAS DONE HERE. ALLIED CONTRACTORS, INC. V. UNITED STATES, 159 CT. CL 548 (1962); 42 COMP. GEN. 383 (1963); 47 COMP. GEN. 365 (1968); B-169676, JULY 28, 1970; B-174130, DECEMBER 21, 1971; B-179632, JANUARY 31, 1974. MOREOVER, THE CONTRACTING OFFICER IS NOT NORMALLY REQUIRED TO MAKE A DETAILED ANALYSIS OF A PRICE BREAKDOWN, BUT ONLY IS REQUIRED TO NOTE ANY DISCREPANCIES BETWEEN THE TOTAL OFFERED PRICE AND A REASONABLE PRICE. B-167795, MARCH 16, 1970; B-176772, MAY 23, 1973. ALSO, WE HAVE FOUND THAT WHERE ONLY ONE BID OR OFFER IS RECEIVED, THERE IS NO BASIS FOR COMPARISON TO OTHER BIDS OR OFFERS, SO THAT THERE IS NORMALLY NOTHING TO PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF A MISTAKE. 26 COMP. GEN. 415 (1946); B-175760, JUNE 19, 1972; B 180607, APRIL 2, 1974.

AWARD UNDER THIS SOLE-SOURCE NEGOTIATED PROCUREMENT WAS MADE IN THE AGGREGATE AND TITAN'S 28 PAGE COST PROPOSAL CONTAINED OVER 530 ITEMS. ALSO, ALTHOUGH VA HAS CONCEDEDLY PROCURED THE DISTILLER EQUIPMENT ON NUMEROUS OCCASIONS IN THE PAST, THE EQUIPMENT WAS USUALLY PURCHASED UNDER AN INVITATION FOR BIDS AS PART OF A LARGE CONSTRUCTION PROJECT FOR WHICH NO DETAILED COST BREAKDOWN WAS REQUIRED. IN VIEW OF THE FOREGOING, WE CANNOT SAY THAT THE CONTRACTING OFFICER SHOULD HAVE SPECIFICALLY REVIEWED THE PRICE FOR THE WATER DISTILLER ITEM OR SHOULD HAVE NOTICED THE DISCREPANCY IN PRICE FOR THIS ITEM, EVEN THOUGH VA DID REVIEW TITAN'S COST PROPOSAL AND APPARENTLY SPECIFIED THE ITEMS WHICH WERE DISCUSSED DURING COST NEGOTIATIONS. THEREFORE, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF TITAN'S MISTAKE IN ITS COST PROPOSAL. SEE B-167795, SUPRA; B-169676, SUPRA; B-175549, APRIL 27, 1972; B-176125, JULY 14, 1972; B-178078, MAY 18, 1973; B-176772, SUPRA; B- 179632, SUPRA.

IN VIEW OF THE FOREGOING, DECISION B-180329, FEBRUARY 12, 1974, IS SUSTAINED AND TITAN'S CLAIM IS DISALLOWED.