B-169542, OCT. 12, 1970

B-169542, OCT. 12, 1970

CONTRACTS - MISTAKES - VERIFICATION EVIDENCE AFFIRMING DECISION OF JULY 16, 1970, DENYING CONTRACTOR RELIEF ON A QUANTUM MERUIT BASIS FOR MISTAKE ALLEGED AFTER VERIFICATION AND AWARD OF CONTRACT WITH THE ARMY. WHERE THERE IS NO WRITTEN MEMORANDUM OF THE CONTRACTING OFFICER'S TELEPHONE VERIFICATION REQUEST, BUT BIDDER'S CONFERENCE LETTER INDICATES PRICES FOR ITEMS, THAT HE HAS COMPLETE UNDERSTANDING OF ITEM TO BE SUPPLIED AND IS COGNIZANT OF THE PACKAGING REQUIREMENTS THE CONTRACTING OFFICER MAY BE REGARDED AS HAVING POINTED OUT THE IMPORTANT OR UNUSUAL CHARACTERISTICS OF THE SPECIFICATIONS AS REQUIRED UNDER 2 406.1 OF ASPR. THEREFORE UPON SUCH ENEQUIVOCAL VERIFICATION CONTRACTING OFFICER HAD DUTY TO MAKE AWARD TO LOW BIDDER.

TO WITTE & WITTE:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10, 1970, WITH ENCLOSURE, REQUESTING RECONSIDERATION OF OUR DECISION DATED JULY 16, 1970, WHICH DENIED YOUR REQUEST, ON BEHALF OF SAN COLMAR INDUSTRIES, INC. (SCI), FOR RELIEF FROM AN ALLEGED MISTAKE IN ITS BID UNDER DEPARTMENT OF THE ARMY CONTRACT NO. DAAG25-67-C-1005.

YOU REFER TO THE FOLLOWING STATEMENTS MADE ON PAGE 4 OF OUR DECISION OF JULY 16, 1970, TO YOU:

"SINCE WE CONCLUDE THAT NO BASIS EXISTS FOR CHARGING THE CONTRACTING OFFICER WITH ACTUAL OR CONSTRUCTIVE NOTICE OF SCI'S ALLEGED ERROR, NO BASIS EXISTS FOR CHALLENGING THE ADEQUACY OF THE BID VERIFICATION REQUESTED OF SCI BEFORE THE AWARD WAS MADE. ACCORDINGLY, YOUR REQUEST FOR RELIEF MUST BE DENIED. SEE 47 COMP. GEN. 732 (1968)."

YOU ALSO REFER TO PARAGRAPHS 2-406 AND 2-406.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) WHICH PROVIDE IN PERTINENT PART AS FOLLOWS:

"2-406 MISTAKES IN BIDS.

"2-406.1 GENERAL. AFTER THE OPENING OF BIDS, CONTRACTING OFFICERS SHALL EXAMINE ALL BIDS FOR MISTAKES. IN CASES OF APPARENT MISTAKES, AND IN CASES WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE, HE SHALL REQUEST FROM THE BIDDER A VERIFICATION OF THE BID, CALLING ATTENTION TO THE SUSPECTED MISTAKE. IF THE BIDDER ALLEGES A MISTAKE, THE MATTER SHALL BE PROCESSED IN THE MANNER SET FORTH BELOW. SUCH ACTIONS SHALL BE TAKEN PRIOR TO AWARD."

YOU CONTEND THAT THE BID VERIFICATION REQUEST BY THE CONTRACTING OFFICER AND THE PROVISIONS OF ASPR 2-406 AND 2-406.1 REQUIRE ONE TO ARRIVE AT A CONCLUSION DIFFERENT THAN THAT SET FORTH IN THE LAST PARAGRAPH OF OUR DECISION, QUOTED ABOVE. YOU STATE THAT THE CONTRACTING OFFICER MUST HAVE SUSPECTED A POSSIBLE ERROR IN THE BID OF SCI, OTHERWISE HE WOULD NOT HAVE REQUESTED THE CORPORATION TO VERIFY ITS BID. YOU ALSO CONTEND THAT SINCE THE CONTRACTING OFFICER SUSPECTED AN ERROR IN SCI'S BID, HE HAD A DUTY UNDER ASPR 2-406.1 TO CALL THE ATTENTION OF SCI TO THE SUSPECTED ERROR AT THE TIME OF THE REQUEST FOR BID VERIFICATION. YOU ALLEGE THAT UNDER THE REGULATION, A BID VERIFICATION REQUEST CANNOT LEGALLY BE MADE UNLESS THERE IS ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR IN THE BID AND THAT SUCH REQUEST CANNOT LEGALLY BE MADE WITHOUT CALLING THE ATTENTION OF THE BIDDER TO THE ERROR KNOWN OR SUSPECTED. ALSO, YOU CONTEND THAT NO LEGAL OR BINDING CONTRACT CAN RESULT WITHOUT DUE ADHERENCE BY THE CONTRACTING OFFICER TO THE REQUIREMENTS OF ASPR 2-406.1. YOU CONCLUDE THEREFORE THAT SCI IS ENTITLED TO RECOVERY OF THE INCREASED COSTS RESULTING FROM ITS ERROR ON A QUANTUM MERUIT BASIS.

IN YOUR LETTER OF APRIL 8, 1970, YOU STATE THAT ON OR ABOUT OCTOBER 20, 1966, MR. A. M. PARZIALE OF THE NEW YORK PROCUREMENT DETACHMENT TELEPHONED SCI AND SPOKE TO MR. GENE CASTORINA, THE GENERAL MANAGER OF SCI, AND THAT MR. PARZIALE REQUESTED A VERIFICATION OF SCI'S BID BUT FAILED TO GIVE ANY INDICATION THAT AN ERROR IN BID WAS KNOWN OR SUSPECTED BY THE GOVERNMENT. THE ADMINISTRATIVE FILE SUBMITTED TO OUR OFFICE DOES NOT CONTAIN A MEMORANDUM COVERING THE TELEPHONE CONVERSATION BETWEEN MR. PARZIALE AND MR. GENE CASTORINA. HOWEVER, IN RESPONSE TO MR. PARZIALE'S REQUEST FOR VERIFICATION OF ITS BID, THE RECORD SHOWS THAT SCI ADVISED THE PROCUREMENT ACTIVITY BY LETTER DATED OCTOBER 20, 1966, AS FOLLOWS:

"WE HEREBY CONFIRM OUR BID FOR THE ABOVE REFERENCED PROJECT, AS FOLLOWS:

ITEM #1 1512 EA. $8.00 $12,096.00

ITEM #2 1512 EA. $7.80 11,793.60

"WE HAVE A COMPLETE UNDERSTANDING AND ARE QUALIFIED IN ENGINEERING THE SUPPLIED ITEM.

"WE ALSO ARE COGNIZANT OF THE PACKAGING REQUIREMENTS AND ARE CAPABLE OF MEETING YOUR STANDARDS.

"OUR PLANT IS OPEN FOR YOUR INSPECTION AND WE ARE CERTAIN YOU WILL FIND THAT WE HAVE ALL THE FACILITIES NECESSARY TO PRODUCE YOUR SUPPLY."

IN THE ABSENCE OF A MEMORANDUM COVERING THE TELEPHONIC REQUEST FOR VERIFICATION OF SCI'S BID, WE BELIEVE THAT WE MAY PROPERLY LOOK TO THE CONTENTS OF SCI'S CONFIRMING LETTER OF OCTOBER 20, 1966, FOR AN INDICATION AS TO WHAT INFORMATION THE CONTRACTING OFFICER FURNISHED TO SCI AT THE TIME OF THE REQUEST FOR VERIFICATION OF ITS BID. IT APPEARS FROM THE LANGUAGE USED BY SCI IN ITS CONFIRMING LETTER THAT THE CONTRACTING OFFICER DID POINT OUT TO SCI THE "IMPORTANT OR UNUSUAL CHARACTERISTICS OF THE SPECIFICATIONS" AS PROVIDED IN ASPR 2 406.3(E)(1) AND THAT SCI INDICATED ITS "COMPLETE UNDERSTANDING" OF THE PROCUREMENT. WE BELIEVE THAT THE VERIFICATION WAS UNDERTAKEN BY THE CONTRACTING OFFICER TO OBTAIN ASSURANCE FROM SCI THAT IT HAD THE CAPACITY TO PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS. FROM THE RECORD BEFORE US, AND IN THE ABSENCE OF EVIDENCE THAT THE REQUEST WAS PERFUNCTORY IN NATURE, WE CONCLUDE THAT THE CONTRACTING OFFICER'S REQUEST FOR VERIFICATION MET THE REQUIREMENTS OF ASPR.

UPON AN UNEQUIVOCAL VERIFICATION, AS HERE, THE CONTRACTING OFFICER HAS A DUTY TO MAKE AN AWARD TO THE LOW RESPONSIVE, RESPONSIBLE BIDDER AND AN AWARD MADE ON SUCH BASIS HAS BEEN HELD TO BE FULLY JUSTIFIED. SEE CARNEGIE STEEL CO. V CONNELLY, 89 N.J.L. 1, 97 A. 774 (1916); SHRIMPTON MFG. CO. V BRIN, 59 TEX. CIV. APP. 352, 125 S.W. 942 (1910); AND ALABAMA SHIRT & TROUSER CO. V UNITED STATES, 121 CT. CL. 313 (1952). SEE ALSO 47 COMP. GEN. 616 (1968).

ACCORDINGLY, OUR DECISION OF JULY 16, 1970, IS AFFIRMED.