A-33123, SEPTEMBER 4, 1930, 10 COMP. GEN. 108

A-33123: Sep 4, 1930

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CONTRACTS - MISTAKE IN BID - WITHDRAWAL WHETHER A BIDDER MAY BE ALLOWED TO WITHDRAW ITS BID ON THE GROUND OF AN ALLEGED MISTAKE IS A MATTER FOR DETERMINATION BY THE COMPTROLLER GENERAL OF THE UNITED STATES. 1930: REFERENCE IS HAD TO LETTER DATED JUNE 26. FROM THE ASSISTANT DIRECTOR OF THE VETERANS' BUREAU AS FOLLOWS: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 21. ON WHICH CONTRACT THE BUREAU ALLOWED THE COMPANY TO WITHDRAW THE QUOTATION OF 10 CENTS PER GALLON QUOTED ON ITEM BUTTERMILK FOR THE REASON THAT THE CONTRACTOR CLAIMED THAT THE QUOTATION WAS IN ERROR AND SHOULD HAVE BEEN 10 CENTS PER QUART OR 40 CENTS PER GALLON. THERE IS FORWARDED HEREWITH THE ORIGINAL LETTER FROM THE CALLAHAN DAIRY COMPANY REQUESTING THAT THEIR QUOTATION BE CHANGED TO READ 40 CENTS PER GALLON.

A-33123, SEPTEMBER 4, 1930, 10 COMP. GEN. 108

CONTRACTS - MISTAKE IN BID - WITHDRAWAL WHETHER A BIDDER MAY BE ALLOWED TO WITHDRAW ITS BID ON THE GROUND OF AN ALLEGED MISTAKE IS A MATTER FOR DETERMINATION BY THE COMPTROLLER GENERAL OF THE UNITED STATES. THE RULE OF PROCEDURE AS STATED IN 8 COMP. GEN. 397 STILL OBTAINS.

COMPTROLLER GENERAL MCCARL TO THE ADMINISTRATOR OF VETERANS' AFFAIRS, SEPTEMBER 4, 1930:

REFERENCE IS HAD TO LETTER DATED JUNE 26, 1930 (DAA-K), FROM THE ASSISTANT DIRECTOR OF THE VETERANS' BUREAU AS FOLLOWS:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED MAY 21, 1930, RELATIVE TO CONTRACT VB 105H-388 OF COOPERATIVE TRADING COMPANY, ON WHICH CONTRACT THE BUREAU ALLOWED THE COMPANY TO WITHDRAW THE QUOTATION OF 10 CENTS PER GALLON QUOTED ON ITEM BUTTERMILK FOR THE REASON THAT THE CONTRACTOR CLAIMED THAT THE QUOTATION WAS IN ERROR AND SHOULD HAVE BEEN 10 CENTS PER QUART OR 40 CENTS PER GALLON.

IN ACCORDANCE WITH YOUR REQUEST, THERE IS FORWARDED HEREWITH THE ORIGINAL LETTER FROM THE CALLAHAN DAIRY COMPANY REQUESTING THAT THEIR QUOTATION BE CHANGED TO READ 40 CENTS PER GALLON, OR IF THIS WAS NOT POSSIBLE REQUESTING PERMISSION TO WITHDRAW THE BID ENTIRELY.

IN REPLY TO PARAGRAPH THREE OF YOUR LETTER, IN WHICH YOU SET FORTH THE PROPER PROCEDURE TO BE FOLLOWED IN CASES OF THIS KIND AND REFER TO 8 COMP. GEN. 397 DATED FEBRUARY 2, 1929, YOU ARE ADVISED THAT THE BUREAU'S DECISION IN THIS PARTICULAR CASE WAS BASED ON A SUBSEQUENT DECISION, A- 28998, DATED OCTOBER 17, 1929, WHICH PROVIDES THAT:

"WHERE IT IS CLEARLY ESTABLISHED THAT A CONTRACTOR MADE A MISTAKE IN THE SUBMISSION OF ITS BID, TO WHICH THE ATTENTION OF THE CONTRACTING OFFICER WAS INVITED BEFORE THE SIGNING OF THE CONTRACT OR THE BEGINNING OF PERFORMANCE THEREUNDER, THE CONTRACT MAY BE RESCINDED AND THE BIDDER RELEASED FROM ANY OBLIGATION THEREUNDER.'

IN THIS PARTICULAR INSTANCE THE PRICE AS ORIGINALLY QUOTED BY THE CALLAHAN DAIRY COMPANY AT 10 CENTS PER GALLON WAS SO UNREASONABLY LOW COMPARED, WITH OTHER QUOTATIONS RECEIVED THAT THE LATER DECISION WAS APPLIED. HOWEVER, IF THIS PROCEDURE IS NOT PROPER, IT IS REQUESTED THAT THE BUREAU BE INFORMED IN DETAIL AS TO THE CORRECT PROCEDURE.

IT APPEARS THAT IN RESPONSE TO INVITATION BY THE BUSINESS MANAGER OF THE UNITED STATES VETERANS' BUREAU HOSPITAL, NORTH CHICAGO, ILL., FOR BIDS FOR FURNISHING PACKING HOUSE AND DAIRY PRODUCTS, PRICES TO BE QUOTED F.O.B. HOSPITAL, BIDS TO BE OPENED MARCH 19, 1930, THE CALLAHAN DAIRY CO., BY PROPOSAL DATED MARCH 8, 1930, AGREED TO FURNISH DAIRY PRODUCTS FOR THE PERIOD APRIL 1 TO JUNE 30, 1930, AT THE RESPECTIVE PRICES SET OPPOSITE SAME. THE BID OF THE CALLAHAN CO. OF 10 CENTS PER GALLON ON ITEM 94 FOR FURNISHING 1,800 GALLONS OF BUTTERMILK WAS THE LOWEST RECEIVED FOR THAT ITEM, THE OTHER BIDS BEING $0.30, $0.32, AND $0.34 PER GALLON, RESPECTIVELY. FOLLOWING THE OPENING OF THE BIDS, THE CALLAHAN CO., BY LETTER DATED MARCH 22, 1930, ASKED PERMISSION TO CHANGE THEIR BID ON ITEM 94, OR IN THE EVENT THAT WAS NOT POSSIBLE TO WITHDRAW THEIR BID ENTIRELY, STATING AS A REASON THEREFOR THAT THEY HAD ERRED IN QUOTING THE PRICE AT 10 CENTS A GALLON AND THAT ALL THE OTHER GOVERNMENT BIDS SPECIFIED THIS ITEM IN QUARTS AND THAT THEY HAD FAILED TO NOTE THAT THE INVITATION IN QUESTION SPECIFIED GALLONS. IN RESPONSE TO REQUEST FOR INSTRUCTIONS IN THE MATTER, THE ASSISTANT DIRECTOR OF THE VETERANS' BUREAU, BY LETTER OF APRIL 3, 1930, ADVISED THE MEDICAL OFFICER IN CHARGE OF THE HOSPITAL THAT:

INASMUCH AS THE NEXT LOWEST BID RECEIVED IS $0.30 PER GALLON, IT IS CLEARLY ESTABLISHED THAT THE CONTRACTOR MADE A MISTAKE IN THE SUBMISSION OF HIS BID, AND SINCE ATTENTION WAS DRAWN TO THE FACT THAT AN ERROR HAD BEEN MADE BEFORE THE CONTRACTS WERE ACCEPTED BY THE BUREAU AND PRIOR TO THE EFFECTIVE DATE THEREOF, THE BIDDER MAY BE ALLOWED TO WITHDRAW HIS BID ON THIS ITEM, AND THE NEXT LOWEST BID OF $0.30 SHOULD BE ACCEPTED FROM THE COOPERATIVE TRADING COMPANY. ACCORDINGLY, THE PROPOSALS AND LETTER DATED MARCH 22, 1930, FROM THE CALLAHAN DAIRY CO., ARE HEREWITH RETURNED. SEE IN THE CONNECTION DECISION OF THE COMPTROLLER GENERAL, A-28998, DATED OCTOBER 17. 1929.

IN VIEW OF THE LETTER, SUPRA, THE CALLAHAN CO. WERE PERMITTED TO WITHDRAW THEIR BID ON ITEM 94, AND ON APRIL 23, 1930, THE BID OF THE COOPERATIVE TRADING CO. OF 30 CENTS A GALLON WAS ACCEPTED, IT BEING THE NEXT LOWEST BID.

AS STATED IN DECISION OF OCTOBER 17, 1929, A-28998, THE GENERAL RULE IS THAT PROPOSALS THAT HAVE BEEN SUBMITTED IN RESPONSE TO AN ADVERTISEMENT FOR BIDS MAY NOT BE WITHDRAWN AFTER THEY HAVE BEEN OPENED, EVEN BEFORE AWARD IS MADE, AND THAT THE BIDDER IS BOUND TO ACCEPT THE AWARD. 24 COMP. DEC 534; 6 COMP. GEN. 504

THE PASSAGE ABOVE QUOTED FROM THE DECISION AS AUTHORITY FOR THE ADMINISTRATIVE ACTION IN AUTHORIZING THE WITHDRAWAL OF THE CALLAHAN BID AND THE ACCEPTANCE OF THE NEXT LOWEST BID IS NOT AUTHORITY THEREFOR. THE FACTS IN THIS CASE IN CONNECTION WITH WHICH THE STATEMENT WAS MADE BY THIS OFFICE HAD BEEN SUBMITTED FOR DECISION IN ACCORDANCE WITH THE DECISION IN 8 COMP. GEN. 397, AND THE DECISION OF OCTOBER 17, 1929, IN THAT PARTICULAR CASE AFTER IT HAD BEEN SUBMITTED IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED IN 8 COMP. GEN. 397 WAS NOT INTENDED TO AND DID NOT AUTHORIZE THE ADMINISTRATIVE OFFICE, IN CASES THOUGHT TO BE SIMILAR, TO APPLY THE DECISION OF OCTOBER 17, 1929, WITHOUT SUBMITTING THE CASE TO THIS OFFICE, IN ACCORDANCE WITH THE PROCEDURE PRESCRIBED IN 8 COMP. GEN 397. THE RULE OF PROCEDURE AS STATED IN 8 COMP. GEN. 397 STILL OBTAINS AND SHOULD BE FOLLOWED HEREAFTER.