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B-131629, JUN. 6, 1957

B-131629 Jun 06, 1957
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IT WAS APPARENT THAT THE UNITED MANUFACTURING AND ENGINEERING CORPORATION BID OF $703 EACH ON ITEM 1 AND $712 EACH ON ITEM 2 WAS SIGNIFICANTLY LOW. THE LOW BIDDER ALLEGED BY TELEGRAM OF MARCH 12 AND LETTER OF MARCH 23 THAT AN ERROR HAD BEEN MADE IN ITS BID ON EACH ITEM IN THAT EACH PRICE SHOULD HAVE BEEN PREFIXED BY THE NUMERAL "1" TO READ $1. 50- GALLON CAPACITY TRAILERS WERE PROCURED IN MAY 1956 AT A UNIT PRICE OF $1. THAT THE SPARE PARTS LISTED UNDER INVITATION NO. 600-1280-57 WERE INTERCHANGEABLE WITH THOSE OF THE LARGER CAPACITY TRAILER. MADE THE FOLLOWING DETERMINATION: "IT IS HEREBY DETERMINED THAT THE ABOVE FACTS AND EVIDENCE CLEARLY ESTABLISH BOTH THAT UNITED MFG. SUBMITTED AN ERRONEOUS BID AND THAT THE BID ACTUALLY INTENDED WAS $1.

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B-131629, JUN. 6, 1957

TO GEIGER AND HARMEL:

BY LETTER OF MAY 23, 1957, WRITTEN ON BEHALF OF THE NATIONAL COOLER CORPORATION OF CLEVELAND, OHIO, YOU PROTESTED THE AWARD OF A CONTRACT PURSUANT TO INVITATION FOR BIDS NO. 600-1280-57, ISSUED BY THE NAVY PURCHASING OFFICE, WASHINGTON, D.C., FOR LIQUID OXYGEN TRAILERS, TO THE UNITED MANUFACTURING AND ENGINEERING CORPORATION OF INDEPENDENCE, MISSOURI.

THE REPORT RECEIVED FROM THE DEPARTMENT OF THE NAVY INDICATES THAT UPON OPENING OF BIDS ON MARCH 11, 1957, IT WAS APPARENT THAT THE UNITED MANUFACTURING AND ENGINEERING CORPORATION BID OF $703 EACH ON ITEM 1 AND $712 EACH ON ITEM 2 WAS SIGNIFICANTLY LOW, THE NEXT HIGHER BID BEING IN EXCESS OF 2 1/2 TIMES THE LOW BID IN EACH CASE. THE REPORT FURTHER INDICATES THAT AFTER OPENING AND PRIOR TO AWARD, THE LOW BIDDER ALLEGED BY TELEGRAM OF MARCH 12 AND LETTER OF MARCH 23 THAT AN ERROR HAD BEEN MADE IN ITS BID ON EACH ITEM IN THAT EACH PRICE SHOULD HAVE BEEN PREFIXED BY THE NUMERAL "1" TO READ $1,703 AND $1,712, RESPECTIVELY. THE LOW BIDDER SUBMITTED PHOTOSTATIC COPIES OF WORKSHEETS TO SUBSTANTIATE ITS ALLEGATION OF ERROR. THE REPORT CONTINUES THAT THE CONTRACTING OFFICER DETERMINED THAT WHILE 30-GALLON OXYGEN TRAILERS HAD NOT BEEN PREVIOUSLY PROCURED, 50- GALLON CAPACITY TRAILERS WERE PROCURED IN MAY 1956 AT A UNIT PRICE OF $1,980.24, F.O.B. ORIGIN, AND THAT THE SPARE PARTS LISTED UNDER INVITATION NO. 600-1280-57 WERE INTERCHANGEABLE WITH THOSE OF THE LARGER CAPACITY TRAILER. ON APRIL 22, 1957, THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, DEPARTMENT OF THE NAVY, MADE THE FOLLOWING DETERMINATION:

"IT IS HEREBY DETERMINED THAT THE ABOVE FACTS AND EVIDENCE CLEARLY ESTABLISH BOTH THAT UNITED MFG. AND ENGR.CORP. SUBMITTED AN ERRONEOUS BID AND THAT THE BID ACTUALLY INTENDED WAS $1,703 FOR ITEM 1 AND $1,712 FOR ITEM 2. ACCORDINGLY, SINCE THE ERROR WAS ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD, THE BID SHOULD BE CORRECTED AND CONSIDERED AS INTENDED.'

IN ACCORDANCE WITH THE DETERMINATION QUOTED ABOVE, AWARD WAS MADE TO UNITED ON APRIL 29, 1957, AT PRICES FOR ITEMS 1 AND 2 AS CORRECTED.

YOUR PROTEST IS BASED UPON YOUR CONTENTION THAT THERE WAS NOT SUBMITTED CLEAR AND CONVINCING EVIDENCE OF THE MISTAKE AND OF THE INTENDED BID WHICH WOULD JUSTIFY CORRECTION OF THE BID UNDER SECTION 2 405.2 OF THE ARMED SERVICES PROCUREMENT REGULATION. YOU POINT OUT FURTHER THAT WE HAVE STATED THAT CORRECTION OF A BID AFTER OPENING AND BEFORE AWARD REQUIRES CONCLUSIVE EVIDENCE THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS AND HOW IT OCCURRED AND FURTHER THAT SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR MUST BE SHOWN AS TO LEAVE NO ROOM FOR DOUBT THAT A BONA FIDE ERROR WAS MADE.

YOU CONTEND THAT THE EVIDENCE OF MISTAKE CANNOT BE CONSIDERED CLEAR AND CONVINCING OR CONCLUSIVE OR LEAVING NO ROOM FOR DOUBT BECAUSE:

(1) THE BID UNDER ITEM 3 OF THE INVITATION FOR SPARE PARTS SUBMITTED BY UNITED, WHICH THAT COMPANY DID NOT CONTEND WAS INCORRECT, IS "IN LINE" WITH THE ORIGINAL BIDS OF $703 AND $712 AS COMPARED WITH THE RATIO BETWEEN TRAILER PRICES AND SPARE PART PRICES SUBMITTED BY THE OTHER BIDDERS.

(2) THE ORIGINAL UNIT PRICES SUBMITTED BY UNITED WERE PROPERLY EXTENDED IN THE TOTAL COLUMN; THAT IS, THE UNIT PRICE MULTIPLIED BY THE NUMBER OF UNITS EQUALED THE AMOUNT IN THE TOTAL COLUMN.

(3) THE PROOF SUBMITTED "IS UNVERIFIED AND UNSWORN TO AND SHOULD NOT BE PERMITTED IN A CASE LIKE THIS, AS THE COMPTROLLER GENERAL HAS STATED IN PAST OPINIONS.'

YOU CONCLUDE THAT A MISTAKE OF THE KIND INVOLVED COULD ONLY RESULT FROM CARELESSNESS AND YOU QUESTION WHETHER THE LOW BIDDER, INSTEAD OF BEING REWARDED FOR HIS CARELESSNESS BY BEING PERMITTED TO AMEND HIS BID AFTER OPENING, SHOULD NOT BE PENALIZED FOR SUCH CARELESSNESS BY BEING PERMITTED ONLY TO WITHDRAW HIS BID, THUS ENCOURAGING A HIGHER STANDARD OF BIDDING.

PARAGRAPH 2-405.2 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES, IN PERTINENT PART THAT THE MILITARY DEPARTMENTS, IN CONNECTION WITH MISTAKES IN BIDS OF OTHER THAN AN OBVIOUS OR APPARENT CLERICAL NATURE, ARE AUTHORIZED TO PERMIT THE BIDDER TO CORRECT HIS BID UPON SUBMISSION OF CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. SUCH AUTHORITY MAY BE DELEGATED UNDER THE PARAGRAPH TO THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, AND WAS SO DELEGATED BY PARAGRAPH 2.405.1 OF THE NAVY PROCUREMENT DIRECTIVES. THE AUTHORITY TO MAKE SUCH CORRECTIONS WAS GRANTED TO AND IS ENTIRELY CONSISTENT WITH OUR DECISIONS, 29 COMP. GEN. 393 AND B-120281, JUNE 29, 1954.

THE STATUTES REQUIRING ADVERTISEMENT FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IT HAS CONSISTENTLY BEEN HELD THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER AWARD AND THERE HAS BEEN PRESENTED IMMEDIATELY CONVINCING EVIDENCE SHOWING A MISTAKE WAS MADE, HOW IT OCCURRED, AND WHAT THE BID PRICES WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF IT. B-123562, MAY 10, 1955.

WE HAVE PERMITTED CORRECTION OF BIDS UPON THE SUBMISSION OF EVIDENCE DEEMED TO BE CONCLUSIVE WHETHER OR NOT SWORN. SEE, FOR EXAMPLE, B-123562, SUPRA; B-121786, OCTOBER 21, 1954; B-119822, APRIL 29, 1954, AND B-119407, APRIL 16, 1954. THE CLEAR AND CONVINCING NATURE OF THE EVIDENCE ESTABLISHING THE FACT OF THE ERROR AND THE INTENDED BID PRICE WAS PROPERLY DETERMINED IN THIS CASE UNDER DULY DELEGATED AUTHORITY BY THE DESIGNATED REPRESENTATIVE OF THE SECRETARY OF THE NAVY. SINCE THE WEIGHT TO BE GIVEN EVIDENCE IS PRIMARILY A QUESTION OF FACT, WE PERCEIVE NO LEGAL BASIS FOR CONCLUDING THAT THE EVIDENCE IN THIS CASE WAS NOT SUFFICIENTLY CLEAR AND CONVINCING OR CONCLUSIVE TO WARRANT MODIFICATION OF THE UNITED BID UNDER THE PRESENT CIRCUMSTANCES.

IN REGARD TO YOUR ALLEGATION THAT THE DIFFERENCE IN THE RATIO OF TRAILER UNIT PRICE TO SPARE PARTS PRICE OF THE CORRECTED UNITED BID AS COMPARED TO THE OTHER BIDS MAKES IT IMPOSSIBLE TO CONCLUDE THAT THE EVIDENCE MEETS THE REQUIRED TESTS, UNITED, BY NOT ALLEGING ERROR ON ITS SPARE PARTS PRICES HAS, IN EFFECT, VERIFIED THOSE PRICES. WE DO NOT PERCEIVE ANY BASIS FOR ATTACHING ANY SIGNIFICANCE TO THE DIFFERENCE IN RATIOS WHICH MAY WELL HAVE BEEN DUE TO A PRICING SYSTEM INCONSISTENT WITH THAT USED BY THE OTHER BIDDERS OR TO OTHER REASONS WHICH WOULD NOT REFLECT UPON THE CHARACTER OF THE EVIDENCE SUBMITTED IN SUPPORT OF THE ALLEGATION OF ERROR ON THE OTHER PARTS OF THE BID.

AS YOU POINT OUT, THE ORIGINAL UNITED BID SHOWED TOTAL PRICES FOR THE TRAILERS CONSISTENT WITH THE ORIGINAL UNIT PRICES. THIS ALSO DOES NOT REFLECT AGAINST THE CHARACTER OF THE EVIDENCE SUBMITTED SINCE THE BASIS FOR CORRECTION IS NOT THAT THE PRICES WERE INCORRECTLY EXTENDED BUT THAT THE UNIT PRICE ORIGINALLY INSERTED WAS ERRONEOUS.

IT MUST BE CONCEDED THAT UNITED WAS CARELESS IN SUBMITTING ITS BID SINCE IT DID NOT BID WHAT IT INTENDED. HOWEVER, THE OCCURRENCE OF ERRORS SUCH AS THIS IS THE VERY REASON FOR THE EXISTENCE OF THE RULES REGARDING CORRECTION OF BID TO WHICH YOU ALLUDE IN YOUR LETTER. THE RESULT WOULD BE HARSH AND INCONSISTENT WITH THE PURPOSES OF THE STATUTES GOVERNING PUBLIC PROCUREMENT IF CORRECTION UNDER THE PROPER CIRCUMSTANCES WAS NOT PERMITTED.

IN ACCORDANCE WITH THE FOREGOING, WE WOULD NOT BE JUSTIFIED IN TAKING ANY FURTHER ACTION ON THE MATTER.

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