A-94406, JULY 7, 1938, 18 COMP. GEN. 22

A-94406: Jul 7, 1938

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CONTRACTS - MISTAKES - BIDS - PROCEDURE WHERE THERE IS SUCH URGENT NEED FOR GOVERNMENT SUPPLIES THAT THE MATTER OF A MISTAKE IN BID. KNOWN TO THE CONTRACTING OFFICER BEFORE AWARD WAS MADE. THE LOWEST BID RECEIVED WAS THAT OF THE GRAVLEE LUMBER CO. THE SECOND LOW BID WAS BY LEAKE AND GOODLETT. FROM ITS BID AND SUCH AUTHORITY WAS GRANTED BY THE PROCUREMENT DIVISION BY TELEGRAM OF AUGUST 14. WAS ACCEPTED. IN EXPLANATION OF THE ACCEPTANCE OF OTHER THAN THE LOW BID RECEIVED IT IS STATED IN YOUR LETTER OF APRIL 16. AS FOLLOWS: THE REQUIREMENTS OF THE GOVERNMENT AS TO TIME WOULD NOT PERMIT THE DELAY INCIDENT IN SUBMITTING THE TRANSACTION TO YOUR OFFICE FOR DETERMINATION AND SINCE THE DIFFERENCE IN AMOUNT OF THE ALLEGED INTENDED BID OF THE GRAVLEE LUMBER COMPANY AND THE SECOND LOW BID WAS RELATIVELY SMALL.

A-94406, JULY 7, 1938, 18 COMP. GEN. 22

CONTRACTS - MISTAKES - BIDS - PROCEDURE WHERE THERE IS SUCH URGENT NEED FOR GOVERNMENT SUPPLIES THAT THE MATTER OF A MISTAKE IN BID, KNOWN TO THE CONTRACTING OFFICER BEFORE AWARD WAS MADE, CANNOT BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE, BEFORE MAKING AN AWARD, AS REQUIRED EXCEPT IN CASES SUCH AS INVOLVED IN 16 COMP. GEN. 999; 17 ID. 339; AND ID 841, THE AWARD SHOULD BE MADE ON THE ORIGINAL MISTAKEN BID OF THE LOW BIDDER EXCEPT IN SUCH CASES AS CONSIDERED IN 17 COMP. GEN. 517.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF THE TREASURY, JULY 7, 1938:

YOUR LETTER OF APRIL 16, 1938, REQUESTS REVIEW OF A DISALLOWANCE OF CREDIT IN THE AMOUNT OF $16.25, UNDER VOUCHER 30916, OCTOBER 1936, ACCOUNTS OF J. M. HAYNES, DISBURSING CLERK, UNITED STATES TREASURY STATE DISBURSING OFFICE, MISSISSIPPI. THE AMOUNT REPRESENTS AN INCREASED COST TO THE GOVERNMENT FOR FAILURE TO ACCEPT THE LOWEST BID FOR A QUANTITY OF CEMENT, UNDER CIRCUMSTANCES HEREINAFTER SET FORTH.

IT APPEARS THAT ON AUGUST 5, 1936, THE STATE PROCUREMENT OFFICER AT JACKSON, MISS., REQUESTED BIDS ON 125 BARRELS OF CEMENT, BIDS TO BE OPENED AUGUST 13, 1936. THE LOWEST BID RECEIVED WAS THAT OF THE GRAVLEE LUMBER CO., QUOTING A PRICE OF $1.67 A BARREL OR $208.75. THE SECOND LOW BID WAS BY LEAKE AND GOODLETT, INC., AT $2.80 A BARREL OR $350. UPON THE OPENING OF BIDS, THE CONTRACTING OFFICER, BEING AWARE OF THE POSSIBILITY OF ERROR, REQUESTED THE LOWEST BIDDER TO VERIFY ITS BID. THE SAID BIDDER TELEGRAPHED AUGUST 13, 1936, AS FOLLOWS:

ITEM SIX INVITATION FIFTEEN THREE TWENTY ONE SHOULD READ TWO DOLLARS SIXTY SEVEN CENTS PER BARREL.

BY TELEGRAM OF SAME DATE THE STATE PROCUREMENT OFFICER REQUESTED AUTHORITY TO RELEASE THE GRAVLEE LUMBER CO. FROM ITS BID AND SUCH AUTHORITY WAS GRANTED BY THE PROCUREMENT DIVISION BY TELEGRAM OF AUGUST 14, 1936, WHEREUPON THE BID OF LEAKE AND GOODLETT, INC., WAS ACCEPTED.

IN EXPLANATION OF THE ACCEPTANCE OF OTHER THAN THE LOW BID RECEIVED IT IS STATED IN YOUR LETTER OF APRIL 16, 1938, AS FOLLOWS:

THE REQUIREMENTS OF THE GOVERNMENT AS TO TIME WOULD NOT PERMIT THE DELAY INCIDENT IN SUBMITTING THE TRANSACTION TO YOUR OFFICE FOR DETERMINATION AND SINCE THE DIFFERENCE IN AMOUNT OF THE ALLEGED INTENDED BID OF THE GRAVLEE LUMBER COMPANY AND THE SECOND LOW BID WAS RELATIVELY SMALL, IT WAS ADMINISTRATIVELY DETERMINED THAT ACCEPTANCE OF THE SECOND LOW BID WAS THE CORRECT PROCEDURE TO FOLLOW UNDER THE CIRCUMSTANCES. ACCEPTANCE OF THE CORRECTED BID WOULD HAVE PERMITTED THE LOW BIDDER TO SUBSTANTIALLY INCREASE ITS BID TO AN AMOUNT SLIGHTLY LESS THAN THE SECOND LOW BID. WAS CONSIDERED THAT THE RESULTING OPPORTUNITY FOR THE GRAVLEE LUMBER COMPANY TO TAKE UNFAIR ADVANTAGE OF THE SITUATION WOULD NOT HAVE BEEN IN THE BEST INTERESTS OF THE GOVERNMENT OR THE OTHER DEALERS FROM WHOM BIDS WERE RECEIVED.

SINCE THE MISTAKE IN THIS CASE WAS KNOWN TO THE CONTRACTING OFFICER BEFORE ANY AWARD WAS MADE AND SINCE THE BID OF GRAVLEE LUMBER CO., AFTER CORRECTION, WAS STILL THE LOW BID, SAID BID SHOULD NOT HAVE BEEN DISREGARDED ON INSTRUCTION FROM THE PROCUREMENT DIVISION. AS THE QUESTION AS TO WHETHER A BIDDER MAY BE RELIEVED OF ITS OBLIGATION UNDER THE BIDDER MADE A MISTAKE BUT ON THE APPLICATION OF CERTAIN LEGAL PRINCIPLES TO THE ESTABLISHED FACTS IN A PARTICULAR CASE, ALL SUCH QUESTIONS--- EXCEPT IN CASES SUCH AS INVOLVED IN 16 COMP. GEN. 999; 17 ID. 339; ID. 841--- SHOULD BE SUBMITTED FOR DETERMINATION BY THIS OFFICE BEFORE AN AWARD IS MADE. COMP. GEN. 65; 15 ID. 774; A-75635, JULY 11, 1936, 16 COMP. GEN. 193; 17 COMP. GEN. 817. SEE, ALSO, IN THIS CONNECTION 14 COMP. GEN. 612. HOWEVER, IT IS NOT TO BE UNDERSTOOD THAT IN ALL CASES OF URGENT NEED THE AWARD MUST BE MADE TO THE BIDDER WHOSE BID AT THE TIME IS KNOWN TO BE ERRONEOUS. 17 COMP. GEN. 517, AND A-94054, JUNE 15, 1938.

UNDER THE FACTS APPEARING IN THIS CASE, IF THERE WAS SUCH URGENT NEED FOR THE CEMENT THAT THE MATTER COULD NOT BE SUBMITTED HERE BEFORE MAKING AN AWARD, THE AWARD SHOULD HAVE BEEN MADE ON THE ORIGINAL BID OF THE LOW BIDDER EVEN THOUGH ERROR WAS CLAIMED THEREIN AND HAD THIS BEEN DONE THE GOVERNMENT COULD HAVE OBTAINED THE REQUIRED CEMENT AT A SAVING OF $16.25 IN THE EVENT THIS OFFICE SHOULD FIND THE BID AS ORIGINALLY SUBMITTED WAS INTENDED TO BE $2.67 PER BARREL AND AT A SAVING OF $116.25 IN THE EVENT THIS OFFICE SHOULD FIND THAT THE MISTAKE WAS NOT BONA FIDE. WHILE CREDIT FOR THE ITEM OF $16.25 WILL NOW BE ALLOWED IN THIS INSTANCE, APPROPRIATE ADMINISTRATIVE ACTION SHOULD BE TAKEN TO ADVISE CONTRACTING OFFICERS AS TO THE PROPER PROCEDURE TO BE FOLLOWED IN SUCH MATTERS AS SET FORTH IN THE DECISIONS OF THIS OFFICE CITED HEREIN.