A-78194, AUGUST 28, 1936, 16 COMP. GEN. 193

A-78194: Aug 28, 1936

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CONTRACTS - MISTAKE IN BIDS - WITHDRAWALS BY ADMINISTRATIVE OFFICERS UNAUTHORIZED ADMINISTRATIVE OFFICERS ARE WITHOUT AUTHORITY TO PERMIT OR REQUIRE THE WITHDRAWAL OF BIDS SUBSEQUENT TO THE TIME FIXED FOR OPENING NOTWITHSTANDING OBVIOUS ERROR IN BID PRICES. BIDS WERE OPENED FOR THE FURNISHING OF A QUANTITY OF CAST-IRON PIPE AND FITTINGS FOR THE PROCUREMENT DIVISION. 237.20 WHEN THE BIDS WERE OPENED THE CONTRACTING OFFICER BELIEVED THAT A MISTAKE HAD BEEN MADE AS THE BID QUOTED A HIGHER PRICE FOR THE 6-INCH PIPE THAN FOR THE 8-INCH PIPE. THE BIDDER WAS ASKED TO VERIFY ITS BID. ADVISED THE CONTRACTING OFFICER AS FOLLOWS: REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 26TH REQUESTING WITHDRAWAL OF BID OF THE WARREN FOUNDRY AND PIPE COMPANY DUE TO TRANSPOSITION OF UNIT PRICES ON ITEMS 1 AND 2 OF YOUR INVITATION NO. 2 1-1737.

A-78194, AUGUST 28, 1936, 16 COMP. GEN. 193

CONTRACTS - MISTAKE IN BIDS - WITHDRAWALS BY ADMINISTRATIVE OFFICERS UNAUTHORIZED ADMINISTRATIVE OFFICERS ARE WITHOUT AUTHORITY TO PERMIT OR REQUIRE THE WITHDRAWAL OF BIDS SUBSEQUENT TO THE TIME FIXED FOR OPENING NOTWITHSTANDING OBVIOUS ERROR IN BID PRICES, SUCH MATTERS, INVOLVING THE APPLICATION OF LEGAL PRINCIPLES, BEING FOR SUBMISSION TO AND DETERMINATION BY THE GENERAL ACCOUNTING OFFICE UNDER THE PROCEDURE OUTLINED IN 8 COMP. GEN. 397.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, AUGUST 28, 1936:

THERE HAS BEEN BROUGHT TO MY ATTENTION CONTRACT NO. TPS-15-1462, DATED MARCH 5, 1936, WITH THE DONALDSON IRON CO., COVERING THE PURCHASE AND DELIVERY OF IRON PIPE AND FITTINGS.

IT APPEARS THAT UNDER DATE OF FEBRUARY 18, 1936, BIDS WERE OPENED FOR THE FURNISHING OF A QUANTITY OF CAST-IRON PIPE AND FITTINGS FOR THE PROCUREMENT DIVISION, STATE PROCUREMENT OFFICE, CONNECTICUT. THE WARREN FOUNDRY AND PIPE CORPORATION SUBMITTED BIDS ON ITEMS 1 AND 2, AS OLLOWS:

CHART

QUANTITY UNIT PRICE TOTAL 1. 8 INCH CAST IRON PIPE, CL. C,

AWWA STD -------------------- 2,687 LIN. FT. $0.81 $2,176.47 2. 6 INCH CAST IRON PIPE, CL. C,

AWWA STD -------------------- 1,880 LIN. FT. 1.19 2,237.20

WHEN THE BIDS WERE OPENED THE CONTRACTING OFFICER BELIEVED THAT A MISTAKE HAD BEEN MADE AS THE BID QUOTED A HIGHER PRICE FOR THE 6-INCH PIPE THAN FOR THE 8-INCH PIPE, WHEREAS ALL OTHER BIDDERS HAD QUOTED A HIGHER PRICE FOR THE 8-INCH PIPE THAN FOR THE 6-INCH PIPE, AND THE BIDDER WAS ASKED TO VERIFY ITS BID. IN A LETTER DATED FEBRUARY 19, 1936, THE SAID BIDDER ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE AS TO ITEMS 1 AND 2 IN THAT THE UNIT PRICES HAD BEEN TRANSPOSED AND THAT THE CORRECT PRICE SHOULD BE AS FOLLOWS:

CHART 1. 8 INCH CAST IRON PIPE, CL. C,

AWWA STD -------------------- 2,687 LIN. FT. $1.19 PER FT. 2. 6 INCH CAST IRON PIPE, CL. C,

AWWA STD -------------------- 1,881 LIN. FT. .81 PER FT.

THE CONTRACTING OFFICER IN LETTER OF FEBRUARY 28, 1936, REQUESTED INSTRUCTIONS WITH REFERENCE TO THE MATTER OF THE ALLEGED MISTAKE AND IN LETTER OF MARCH 2, 1936, THE SPECIAL ASSISTANT, PROCUREMENT DIVISION, TREASURY DEPARTMENT, ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 26TH REQUESTING WITHDRAWAL OF BID OF THE WARREN FOUNDRY AND PIPE COMPANY DUE TO TRANSPOSITION OF UNIT PRICES ON ITEMS 1 AND 2 OF YOUR INVITATION NO. 2 1-1737.

ANALYSIS OF THE ABSTRACT OF BIDS INDICATES THAT AN OBVIOUS ERROR HAS BEEN MADE IN THIS INSTANCE AND THAT ENFORCEMENT OF THE CONTRACT BY THE GOVERNMENT WOULD BE UNCONSCIONABLE. PERMISSION IS THEREFORE GRANTED, ASSUMING THAT NO AWARD HAS BEEN MADE, OR PURCHASE ORDER ISSUED, TO WITHDRAW THE ENTIRE BID OF THE WARREN FOUNDRY AND PIPE COMPANY FROM CONSIDERATION AND TO MAKE AWARD TO THE NEXT LOWEST RESPONSIBLE BIDDER.

IT SHOULD BE NOTED THAT REQUEST FOR RELEASE OF BID DUE TO ERRORS IN PRICES ON A SINGLE ITEM MUST NECESSARILY REQUIRE THE WITHDRAWAL OF THE ENTIRE BID FROM CONSIDERATION.

THE FILES FORWARDED WITH YOUR LETTER ARE RETURNED HEREWITH.

IN ACCORDANCE WITH SAID INSTRUCTIONS THE BID OF THE SAID WARREN FOUNDRY AND PIPE CORPORATION WAS DISREGARDED AND AWARDS MADE TO THE DONALDSON IRON CO.

THE DUTY AND RESPONSIBILITY OF DETERMINING THE RESPECTIVE RIGHTS AND LIABILITIES OF THE BIDDER AND THE GOVERNMENT UNDER SUCH CIRCUMSTANCES AS HERE INVOLVED IS NOT A FUNCTION OF THE PROCUREMENT DIVISION.

PARAGRAPH 14, STANDARD GOVERNMENT INSTRUCTIONS TO BIDDERS, PROVIDES THAT BIDS MAY BE WITHDRAWN ON WRITTEN OR TELEGRAPHIC REQUEST RECEIVED PRIOR TO THE TIME FIXED FOR OPENING, BUT THERE THE ADMINISTRATIVE AUTHORITY TO RELEASE A BIDDER ENDS. THE QUESTION AS TO WHETHER A BID MAY BE CHANGED OR WITHDRAWN AFTER THE TIME FIXED FOR OPENING DEPENDS NOT ALONE ON WHETHER THE BIDDER MADE A MISTAKE BUT ON THE APPLICATION OF CERTAIN LEGAL PRINCIPLES TO THE ESTABLISHED FACTS IN THE PARTICULAR CASE, AND SUCH QUESTIONS ARE NECESSARILY FOR DETERMINATION BY THIS OFFICE AND NOT BY ANY ADMINISTRATIVE OFFICER. THE PROCEDURE TO BE FOLLOWED IN SUCH CASES IS THAT OUTLINED IN DECISION OF FEBRUARY 2, 1928, 8 COMP. GEN. 397.

IN THIS CASE THE FACTS CLEARLY SHOW THAT A MISTAKE WAS MADE, HOW IT WAS MADE, AND IN WHAT IT CONSISTS. SUCH BEING THE CASE, HAD THE MATTER BEEN FORWARDED TO THIS OFFICE, AS IT SHOULD HAVE BEEN, THE BID WOULD HAVE BEEN FOR CORRECTION AND AS CORRECTED CONSIDERED ALONG WITH OTHER BIDS RECEIVED. BY SUCH PROCEDURE THE UNITED STATES WOULD HAVE OBTAINED THE PIPE AT A LOWER PRICE.

YOUR PARTICULAR ATTENTION IS INVITED TO THAT PART OF THE SPECIAL ASSISTANT'S LETTER, SUPRA, TO THE EFFECT "IT SHOULD BE NOTED THAT REQUEST FOR RELEASE OF BID DUE TO ERRORS IN PRICES ON A SINGLE ITEM MUST NECESSARILY REQUIRE THE WITHDRAWAL OF THE ENTIRE BID FROM CONSIDERATION.' THERE APPEARS NO LEGAL BASIS FOR SUCH A VIEW.

AS A RESULT OF THE ACTION TAKEN BY THE PROCUREMENT DIVISION IN THIS CASE IN DIRECT CONTRAVENTION OF THE PROCEDURE ESTABLISHED BY A LONG LINE OF DECISIONS OF THIS OFFICE, THIS COMPARATIVELY SMALL PURCHASE OF PIPE HAS COST THE GOVERNMENT NEARLY $200 MORE THAN IT WOULD HAVE COST IF THE ESTABLISHED PROCEDURE HAD BEEN FOLLOWED. THE MATTER IS BROUGHT TO YOUR ATTENTION FOR SUCH ADMINISTRATIVE ACTION AS MAY BE NECESSARY TO PREVENT THE PROCUREMENT DIVISION FROM CONTINUING SUCH AN UNAUTHORIZED PROCEDURE AS WAS FOLLOWED IN THIS CASE.