A-91038, DECEMBER 13, 1937, 17 COMP. GEN. 493

A-91038: Dec 13, 1937

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IT WAS OBVIOUS THAT ONE BIDDER HAD MADE A MISTAKE IN THE DISCOUNT OFFERED. IN CASES WHERE THE PROVISION IN A BID PURPORTING TO OFFER A CERTAIN DISCOUNT FOR PAYMENT WITHIN A STATED PERIOD IS OBVIOUSLY ERRONEOUS BECAUSE IN EXCESS OF THE RESPECTIVE DISCOUNTS OFFERED FOR SHORTER PERIODS. AS FOLLOWS: THERE ARE TRANSMITTED HEREWITH ALL BIDS AND AN ABSTRACT THEREOF RECEIVED IN RESPONSE TO THE DEPARTMENT'S INVITATION USDA NO. 843. BY REASON OF THE 30 PERCENT DISCOUNT IS THE LOW BIDDER. IS NOT LOW OTHERWISE. THE DISCOUNT OF 30 PERCENT WAS IMMEDIATELY RECOGNIZED AS AN OBVIOUS ERROR AND. IN REPLY THERETO THE FOLLOWING TELEGRAM WAS RECEIVED: "REFERENCE BID USDA EIGHT FOUR THREE DISCOUNT ONE PERCENT TEN DAYS ONE HALF PERCENT TWENTY DAYS NET THIRTY DAYS.

A-91038, DECEMBER 13, 1937, 17 COMP. GEN. 493

CONTRACTS - MISTAKES - BIDS - ERRONEOUS DISCOUNT OFFERS - DISREGARDING OF BID IN MAKING AWARD AND CORRECTION WITHOUT SUBMISSION TO GENERAL ACCOUNTING OFFICE WHERE, UPON THE OPENING OF BIDS, IT WAS OBVIOUS THAT ONE BIDDER HAD MADE A MISTAKE IN THE DISCOUNT OFFERED--- THE DISCOUNT STATED FOR ONE PERIOD BEING 30 TIMES GREATER THAN THAT OFFERED FOR A SHORTER PERIOD--- AND THE BIDDER, AFTER HAVING THE MATTER BROUGHT TO HIS ATTENTION, HAS CONFIRMED THE ERROR, THE BID AS CORRECTED, NOT BEING THE LOWEST BID RECEIVED, MAY BE DISREGARDED IN MAKING THE AWARD. IN CASES WHERE THE PROVISION IN A BID PURPORTING TO OFFER A CERTAIN DISCOUNT FOR PAYMENT WITHIN A STATED PERIOD IS OBVIOUSLY ERRONEOUS BECAUSE IN EXCESS OF THE RESPECTIVE DISCOUNTS OFFERED FOR SHORTER PERIODS, SUCH ERRONEOUS OFFER MAY BE DISREGARDED IN COMPARING BIDS, AND IN MAKING AWARD, WITHOUT SUBMITTING THE MATTER TO THE GENERAL ACCOUNTING OFFICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, DECEMBER 13, 1937:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 8, 1937, AS FOLLOWS:

THERE ARE TRANSMITTED HEREWITH ALL BIDS AND AN ABSTRACT THEREOF RECEIVED IN RESPONSE TO THE DEPARTMENT'S INVITATION USDA NO. 843, COVERING THE PROPOSED PURCHASE OF DECALCOMANIA VARNISH TRANSFERS, OPENED NOVEMBER 23, 1937.

AN ANALYSIS OF THE CASE DISCLOSED THAT THE NATIONAL DECALCOMANIA CORPORATION, PHILADELPHIA, PENNSYLVANIA, OFFERED THE FOLLOWING DISCOUNTS FOR PROMPT PAYMENT:

1 PERCENT--- 10 DAYS, 1/2 PERCENT--- 20 DAYS, 30 PERCENT--- 30 DAYS,

AND BY REASON OF THE 30 PERCENT DISCOUNT IS THE LOW BIDDER, BUT IS NOT LOW OTHERWISE. THE DISCOUNT OF 30 PERCENT WAS IMMEDIATELY RECOGNIZED AS AN OBVIOUS ERROR AND, THEREFORE, THE DEPARTMENT, BY TELEGRAM OF NOVEMBER 24, 1937, REQUESTED A VERIFICATION OF THE OFFER. IN REPLY THERETO THE FOLLOWING TELEGRAM WAS RECEIVED:

"REFERENCE BID USDA EIGHT FOUR THREE DISCOUNT ONE PERCENT TEN DAYS ONE HALF PERCENT TWENTY DAYS NET THIRTY DAYS.

(SIGNED) NATIONAL DECALCOMANIA CORPORATION.'

IT IS APPARENT THAT AN ERROR WAS MADE BY THE ABOVE-NAMED FIRM IN PREPARING THE BID FORM AND IN ACCORDANCE WITH THE PROCEDURE OUTLINED BY YOUR OFFICE, THIS CASE IS SUBMITTED FOR DETERMINATION AS TO WHETHER THE BID IS TO BE CONSIDERED IN ITS CORRECTED FORM AND AWARD MADE TO THE OTHERWISE LOW BIDDER, OR WHETHER AWARD SHOULD BE MADE ON THE BASIS OF THE 30 PERCENT DISCOUNT AND THE NATIONAL DECALCOMANIA CORPORATION REQUIRED TO PERFORM ITS CONTRACT.

IN BID TRANSACTIONS HANDLED BY THE DEPARTMENT OBVIOUS ERRORS IN CONNECTION WITH THE DISCOUNTS OFFERED FREQUENTLY APPEAR, AS IN THE CASE PRESENTED HEREIN, AND IT IS FELT THAT AUTHORITY FOR MAKING THE NECESSARY CORRECTIONS SHOULD BE VESTED IN THE CONTRACTING OFFICERS WITHOUT SUBMISSION TO YOUR OFFICE. YOUR COMMENT ON THIS POINT WILL BE APPRECIATED.

PLEASE ADVISE THE DEPARTMENT AS TO THE PROPER ACTION TO FOLLOW, RETURNING ALL PAPERS WITH YOUR DECISION.

THERE CAN BE NO REASONABLE DOUBT THAT THE BIDDER DID NOT INTEND TO GIVE 30 TIMES AS MUCH DISCOUNT FOR PAYMENT WITHIN 30 DAYS AS IT OFFERED FOR PAYMENT WITHIN 10 DAYS. THE ERROR BEING OBVIOUS, THE CONTRACTING OFFICER ON REQUEST FOR VERIFICATION BEFORE AWARDING THE CONTRACT BEING ADVISED THAT THE DISCOUNT INTENDED TO BE OFFERED WAS 1 PERCENT FOR PAYMENT WITHIN 10 DAYS, 1/2 PERCENT 20 DAYS AND NET 30 DAYS, AND IT APPEARING THAT THE BID AS CORRECTED WOULD NOT BE THE LOWEST BID RECEIVED, THE BID OF THE NATIONAL DECALCOMANIA CORPORATION MAY BE DISREGARDED IN MAKING THE AWARD.

AS TO THE AUTHORITY REQUESTED IN THE PENULTIMATE PARAGRAPH OF YOUR LETTER, YOU ARE ADVISED THAT WHERE, AS IN THE INSTANT CASE, THE PROVISION IN A BID PURPORTING TO OFFER A 30-PERCENT DISCOUNT FOR PAYMENT WITHIN 30 DAYS IS OBVIOUSLY ERRONEOUS BECAUSE IN EXCESS OF THE DISCOUNT OFFERED FOR PAYMENT WITHIN 10 DAYS OR 20 DAYS, THE OFFER OF THE 30 PERCENT DISCOUNT MAY BE DISREGARDED IN COMPARING THE BIDS AND MAKING THE AWARD WITHOUT SUBMITTING THE MATTER TO THIS OFFICE FOR CONSIDERATION. IN THIS CONNECTION SEE 16 COMP. GEN. 999; 17 ID. 339.

THE PAPERS INCLOSED WITH YOUR LETTER OF DECEMBER 8, 1937, ARE RETURNED.