A-98774, NOVEMBER 1, 1938, 18 COMP. GEN. 409

A-98774: Nov 1, 1938

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WHERE THE MISTAKE IN BID IS ALLEGED AND CLEARLY ESTABLISHED BEFORE ANY DELIVERY IS MADE BY THE BIDDER. AS FOLLOWS: PURCHASING OFFICERS IN PURCHASING SUBSISTENCE SUPPLIES FREQUENTLY ARE REQUIRED TO MAKE AWARDS UPON BIDS. SUCH ACTION IS NECESSITATED BY REASON OF EMERGENCY CONDITIONS SUCH AS URGENT NEED FOR THE SUPPLIES AND/OR LIMITED TIME ALLOWED BY BIDDERS FOR ACCEPTANCE OF BIDS. IN MAKING AWARDS UPON SUCH BIDS THE BIDDER IS ALWAYS APPRISED OF ITS RIGHT TO SUBMIT A CLAIM FOR WHATEVER ADDITIONAL AMOUNT IS ALLEGED TO BE DUE. IT IS NOTED THAT WHENEVER SUCH A CLAIM IS IN CONNECTION WITH A BID UPON SUBSISTENCE ARTICLES FOR RESALE PURPOSES IT IS DISALLOWED BY YOUR OFFICE FOR THE FOLLOWING REASON: "THE ARTICLE.

A-98774, NOVEMBER 1, 1938, 18 COMP. GEN. 409

CONTRACTS - MISTAKES - BIDS - GOVERNMENT RESALE PURCHASES - DISREGARDING OF ERRONEOUS BID ERRONEOUS BIDS RECEIVED FOR THE DELIVERY OF ARTICLES TO BE PURCHASED BY THE UNITED STATES FOR RESALE PURPOSES MAY BE DISREGARDED, AS ADMINISTRATIVELY RECOMMENDED, IN MAKING AWARD, WHERE THE MISTAKE IN BID IS ALLEGED AND CLEARLY ESTABLISHED BEFORE ANY DELIVERY IS MADE BY THE BIDDER, 17 COMP. GEN. 517; ID. 1077, AMPLIFIED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, NOVEMBER 1, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF OCTOBER 21, 1938, AS FOLLOWS:

PURCHASING OFFICERS IN PURCHASING SUBSISTENCE SUPPLIES FREQUENTLY ARE REQUIRED TO MAKE AWARDS UPON BIDS, WITH RESPECT TO WHICH THERE HAS BEEN A BONA FIDE MISTAKE, AT THE PRICE BID WITHOUT REFERRING THE CASE TO YOUR OFFICE FOR A DECISION AS TO WHETHER THE BID MAY PROPERLY BE CORRECTED OR WITHDRAWN. SUCH ACTION IS NECESSITATED BY REASON OF EMERGENCY CONDITIONS SUCH AS URGENT NEED FOR THE SUPPLIES AND/OR LIMITED TIME ALLOWED BY BIDDERS FOR ACCEPTANCE OF BIDS, AND HAS BEEN HELD TO BE PROPER IN YOUR DECISION OF JULY 7, 1938 (18 COMP. GEN. 22).

IN MAKING AWARDS UPON SUCH BIDS THE BIDDER IS ALWAYS APPRISED OF ITS RIGHT TO SUBMIT A CLAIM FOR WHATEVER ADDITIONAL AMOUNT IS ALLEGED TO BE DUE. HOWEVER, IT IS NOTED THAT WHENEVER SUCH A CLAIM IS IN CONNECTION WITH A BID UPON SUBSISTENCE ARTICLES FOR RESALE PURPOSES IT IS DISALLOWED BY YOUR OFFICE FOR THE FOLLOWING REASON:

"THE ARTICLE, * * *, WAS FOR RESALE AND WAS SOLD AT THE BID PRICE. WHERE SALES ARE MADE BY THE GOVERNMENT ON SUCH BASIS, NO ADVANTAGE CAN RESULT TO THE UNITED STATES FROM THE CONTRACTOR'S MISTAKE, AND, THEREFORE, THE GENERAL RULE THAT RELIEF WILL BE GRANTED WHEN THE ERROR IN THE BID IS SO APPARENT THAT IT MUST BE PRESUMED THAT THE ACCEPTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF HAS NO APPLICATION HERE.'

WHILE IT IS TRUE THAT NO ADVANTAGE CAN RESULT TO THE UNITED STATES FROM A CONTRACTOR'S MISTAKE IN SUCH CASES, CONVERSELY, NO DAMAGE CAN RESULT TO THE UNITED STATES IN PERMITTING THE CORRECTION OF A MISTAKE, PROVIDED SUCH ACTION IS TAKEN IN ADVANCE OF THE DELIVERY OF THE SUPPLIES AND THEIR RESALE.

OBVIOUSLY, TO REQUIRE A BIDDER TO DELIVER SUPPLIES AT A PRICE CLEARLY NOT INTENDED CONSTITUTES A SEVERE PENALTY SINCE SUBSEQUENT RELIEF MAY NOT BE GRANTED AS IN THE CASE OF SUPPLIES WHICH ARE NOT FOR RESALE PURPOSES. WITH A VIEW TO MINIMIZING SUCH PENALTIES INSOFAR AS IS POSSIBLE, AND SINCE NO DAMAGE CAN POSSIBLY RESULT TO THE UNITED STATES, IT IS RECOMMENDED THAT IN THOSE CASES WHERE TIME WILL NOT PERMIT REFERENCE TO YOUR OFFICE, THE QUARTERMASTER GENERAL BE PERMITTED TO MAKE THE DECISION IN THE INDIVIDUAL CASES AND, UPON A CONCLUSIVE SHOWING THAT THERE HAS BEEN A BONA FIDE MISTAKE, AND PROVIDED THE ITEMS INVOLVED ARE FOR RESALE PURPOSES, BE PERMITTED TO AUTHORIZE PURCHASING OFFICERS TO DISREGARD SUCH BIDS. THIS CONNECTION, ATTENTION IS INVITED TO YOUR DECISION OF AUGUST 24, 1932 (A-43261).

THERE WOULD APPEAR TO BE NO OBJECTION TO THE RECOMMENDATION MADE IN THE CONCLUDING PARAGRAPH OF YOUR LETTER TO THE EFFECT THAT CONTRACTING OFFICERS BE AUTHORIZED TO DISREGARD ERRONEOUS BIDS RECEIVED FOR THE DELIVERY OF ARTICLES TO BE PURCHASED FOR RESALE IN CASES WHERE THE MISTAKE IN BID IS ALLEGED AND CLEARLY ESTABLISHED BEFORE ANY DELIVERY IS MADE BY THE BIDDER. IN THIS CONNECTION SEE 17 COMP. GEN. 517; ID. 1077.