B-124345, JUL. 6, 1955

B-124345: Jul 6, 1955

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PUBLIC PRINTER: REFERENCE IS MADE TO YOUR LETTER DATED JUNE 17. MAY BE CANCELLED IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID ON WHICH THE PURCHASE ORDER WAS BASED. FOUR OTHER BIDS WERE RECEIVED IN THE AMOUNTS OF $2. WHILE THE BID OF THE COMPANY WAS $468 LOWER THAN THE NEXT LOWEST BID. A SUFFICIENT PRICE VARIATION TO WARRANT A DETERMINATION THAT THE LOW BID OF THE BAUGHMAN COMPANY WAS OUT OF LINE WITH THE OTHER BIDS RECEIVED. WHILE IT IS REPORTED THAT THE BID OF THE BAUGHMAN COMPANY WAS $732 LOWER THAN THE ESTIMATE OF THE GOVERNMENT PRINTING OFFICE FOR THE WORK. IT IS NOTED THAT THE SECOND LOW BID WAS ALSO $264 LOWER THAN THE ESTIMATE. WHEN IT IS WELL KNOWN THAT SUCH ESTIMATES QUITE OFTEN VARY EXCESSIVELY BOTH ABOVE AND BELOW THE ACTUAL BID PRICES RECEIVED.

B-124345, JUL. 6, 1955

TO HONORABLE RAYMOND BLATTENBERGER, PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER DATED JUNE 17, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER PURCHASE ORDER NO. 16990, DATED JUNE 7, 1955, ISSUED TO THE BAUGHMAN COMPANY, MAY BE CANCELLED IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID ON WHICH THE PURCHASE ORDER WAS BASED.

THE RECORD SHOWS THAT, IN ADDITION TO THE BID OF THE BAUGHMAN COMPANY OF $2,266 FOR FURNISHING 2,200,000 COPIES OF THE FORM REQUIRED BY THE SPECIFICATIONS, FOUR OTHER BIDS WERE RECEIVED IN THE AMOUNTS OF $2,734, $3,080, $3,777.65 AND $4,943. HENCE, WHILE THE BID OF THE COMPANY WAS $468 LOWER THAN THE NEXT LOWEST BID, THERE DOES NOT EXIST, WHEN CONSIDERING ALL OF THE BIDS RECEIVED, A SUFFICIENT PRICE VARIATION TO WARRANT A DETERMINATION THAT THE LOW BID OF THE BAUGHMAN COMPANY WAS OUT OF LINE WITH THE OTHER BIDS RECEIVED. MOREOVER, WHILE IT IS REPORTED THAT THE BID OF THE BAUGHMAN COMPANY WAS $732 LOWER THAN THE ESTIMATE OF THE GOVERNMENT PRINTING OFFICE FOR THE WORK, IT IS NOTED THAT THE SECOND LOW BID WAS ALSO $264 LOWER THAN THE ESTIMATE. IN THE ABSENCE OF SOME PARTICULARLY UNIQUE CIRCUMSTANCES, THERE APPEARS TO BE LITTLE IF ANY, JUSTIFICATION FOR ACCEPTING A GOVERNMENT ESTIMATE AS THE SOLE CRITERION OF DETERMINING THE PROBABILITY OF AN ERROR IN THE BID, WHEN IT IS WELL KNOWN THAT SUCH ESTIMATES QUITE OFTEN VARY EXCESSIVELY BOTH ABOVE AND BELOW THE ACTUAL BID PRICES RECEIVED. IN VIEW OF THE FOREGOING, IT REASONABLY MAY NOT BE CONCLUDED THAT THE CONTRACTING OFFICER WAS SO CLEARLY ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE BAUGHMAN COMPANY THAT THE ACCEPTANCE OF THE LOW BID WAS NOT JUSTIFIABLE AND IN GOOD FAITH. THE ACCEPTANCE WITHOUT NOTICE OF ERROR, THEREFORE, CONSUMMATED A VALID CONTRACT CONFERRING RIGHTS AND OBLIGATIONS UPON THE CONTRACTING PARTIES WHICH NEITHER THIS OFFICE NOR ANY OTHER OFFICER OF THE GOVERNMENT IS AUTHORIZED TO VARY TO THE DETRIMENT OF THE UNITED STATES WITHOUT ADEQUATE CONSIDERATION.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR RELEASING THE BAUGHMAN COMPANY FROM ITS OBLIGATION UNDER THE PURCHASE ORDER.