B-152753, NOV. 6, 1963
Highlights
A DECISION IS REQUESTED AS TO WHETHER CONTRACT PH43 64- 444. TWO DAYS AFTER DELIVERY WAS TO HAVE COMMENCED. THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAS BEEN CONSUMMATED. THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED. HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. THE ABSTRACT OF BIDS ESTABLISHES THAT WHILE THE 30 PERCENT DISCOUNT WAS INORDINATELY HIGH. THE NET AMOUNT OF BERRY'S BID WAS NOT UNREASONABLY LOWER THAN THE NET AMOUNTS OF THREE OF THE OTHER FOUR BIDS SUBMITTED.
B-152753, NOV. 6, 1963
TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE:
IN A LETTER OF OCTOBER 24, 1963, FROM CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH, A DECISION IS REQUESTED AS TO WHETHER CONTRACT PH43 64- 444, AWARDED SEPTEMBER 18, 1963, TO BERRY'S WHOLESALE FRUIT AND PRODUCE, FOR SUPPLYING FRESH FRUITS AND VEGETABLES TO THE NATIONAL INSTITUTE OF HEALTH (NIH), BETHESDA, MARYLAND, MAY BE CANCELED BECAUSE OF THE COMPANY'S ALLEGED TYPOGRAPHICAL ERROR IN QUOTING A DISCOUNT OF "30" PERCENT, 30 CALENDAR DAYS INSTEAD OF INSERTING THE WORD "NET" IN THE SPACE PROVIDED FOR SHOWING THE DISCOUNT OFFERED. SINCE THE CONTRACT CALLED FOR DELIVERIES BETWEEN SEPTEMBER 28, 1963, AND OCTOBER 25, 1963, WE PRESUME PERFORMANCE THEREUNDER HAS BEEN COMPLETED.
THE COMPANY DID NOT ALLEGE A MISTAKE IN ITS DISCOUNT UNTIL SEPTEMBER 30, 1963, SEVERAL DAYS AFTER AWARD OF THE CONTRACT, AND TWO DAYS AFTER DELIVERY WAS TO HAVE COMMENCED. THEREFORE, THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAS BEEN CONSUMMATED. SEE 36 COMP. GEN. 27.
THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. SEE 20 COMP. GEN. 652, 657, AND CASES CITED THEREIN.
ON THE OTHER HAND, IF THE CONTRACTING OFFICER SUSPECTS AN ERROR IN BID AND FAILS TO SPECIFICALLY ADVISE THE BIDDER OF THE SUSPECTED ERROR AND TO REQUEST VERIFICATION OF THE BID, THE GOVERNMENT'S ACCEPTANCE OF SUCH BID DOES NOT RESULT IN A BINDING CONTRACT. SEE 39 COMP. GEN. 405, 407; ALSO, SEE 37 COMP. GEN. 706, 707, AND CASES CITED THEREIN.
THE ABSTRACT OF BIDS ESTABLISHES THAT WHILE THE 30 PERCENT DISCOUNT WAS INORDINATELY HIGH, IN RELATION TO THE OTHER BIDS, THE NET AMOUNT OF BERRY'S BID WAS NOT UNREASONABLY LOWER THAN THE NET AMOUNTS OF THREE OF THE OTHER FOUR BIDS SUBMITTED. MOREOVER, THE CONTRACTING OFFICER REPORTS THAT BIDS RECEIVED AND ACCEPTED IN THE PAST ON OTHER SUBSISTENCE ITEMS UNDER NIH INVITATIONS HAVE INCLUDED TIME DISCOUNTS OF 32 AND 34 PERCENT, 30 CALENDAR DAYS. SINCE THE DISCOUNT OFFERED WAS NOT UNIQUE, AND THE NET OFFER NOT OUT OF LINE WITH OTHER BIDS, THE CONTRACTING OFFICER HAD LITTLE REASON TO SUSPECT THE POSSIBILITY OF AN ERROR. FURTHERMORE, ON SEPTEMBER 13, 1963, IN RESPONSE TO A TELEPHONE CALL RECEIVED FROM BERRY INQUIRING AS TO THE STATUS OF ITS BID, A PROCUREMENT AGENT INFORMED THE COMPANY THAT BECAUSE OF ITS DISCOUNT, ITS BID WAS LOW AND WAS BEING CONSIDERED FOR AWARD. THE COMPANY STATED THAT IT WOULD BE GLAD TO RECEIVE THE BUSINESS AND DID NOT TAKE EXCEPTION TO THE ADVICE THAT THE DISCOUNT HAD MADE ITS BID THE LOWEST RECEIVED, EVEN THOUGH IT NOW STATES THAT IT HAS NOT BEEN ITS PRACTICE TO OFFER DISCOUNTS FOR PROMPT PAYMENT.
IN VIEW OF THE DESCRIBED CIRCUMSTANCES, WE DO NOT BELIEVE THE ERROR WAS SO APPARENT AS TO GIVE THE CONTRACTING OFFICER REASON TO SUSPECT THE POSSIBILITY OF AN ERROR IN BERRY'S BID. THEREFORE, A VALID AND BINDING CONTRACT WAS CONSUMMATED UPON ACCEPTANCE OF THE COMPANY'S BID, AND NO RELIEF MAY BE GRANTED THEREFROM.