B-132708, AUG. 26, 1957

B-132708: Aug 26, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

VETERANS ADMINISTRATION HOSPITAL: REFERENCE IS MADE TO YOUR LETTER OF JULY 24. TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 57-131. WAS ACCEPTED ON JUNE 27. THE ALLEGATION OF ERROR WAS CONFIRMED BY LETTER OF JULY 10. IT WAS EXPLAINED THAT THE ERROR WAS DUE TO A MISTAKE IN COMPUTING THE NUMBER OF POUNDS OF VIRGIN POLYETHYLENE RESIN REQUIRED FOR 1. 000 LINERS AND THAT THE CORRECT PRICE SHOULD HAVE BEEN $78.84. THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID. IT IS REPORTED THAT YOU WERE NOT ON NOTICE OF THE POSSIBILITY OF ERROR PRIOR TO AWARD. THAT THE DIFFERENCE OF $6.11 PER THOUSAND BETWEEN THE AMOUNT OF THE LOW BID AND THE NEXT-LOW BID COULD EASILY HAVE BEEN DUE TO THE LOW BIDDER'S REQUEST TO SHIP IN MULTIPLES OF 4.

B-132708, AUG. 26, 1957

TO PAUL J. EULE, CONTRACTING OFFICER, VETERANS ADMINISTRATION HOSPITAL:

REFERENCE IS MADE TO YOUR LETTER OF JULY 24, 1957, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY POLY PLASTIC PRODUCTS, INC., TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 57-131.

THE INVITATION REQUESTED BIDS FOR FURNISHING THE HOSPITAL'S REQUIREMENTS, ESTIMATED AT 25,000, FOR POLYETHYLENE TRASH CAN LINERS FOR THE FISCAL YEAR 1958. HOWEVER, PARAGRAPH 16 OF THE INVITATION PROVIDES THAT THE CONTRACT MAY BE TERMINATED AT THE REQUEST OF EITHER PARTY AFTER GIVING 30 DAYS WRITTEN NOTICE.

IN RESPONSE TO THE INVITATION POLY PLASTICS PRODUCTS, INC., SUBMITTED A BID OFFERING TO FURNISH THE LINERS AT A PRICE OF $66.59 PER THOUSAND IN MULTIPLES OF 4,000. THE FIVE OTHER BIDS RECEIVED QUOTED PRICES OF $72.70, $80.30, $84.80, $100.30 AND $103.15 PER THOUSAND. THE BID OF POLY PLASTIC PRODUCTS, INC., BEING THE LOWEST RECEIVED AND THE CONDITION AS TO FURNISHING THE LINERS IN MULTIPLES OF 4,000 BEING SATISFACTORY, WAS ACCEPTED ON JUNE 27, 1957, CONSUMMATING CONTRACT NO. V5205P-279.

ON JULY 3, 1957, A REPRESENTATIVE OF THE CONTRACTOR NOTIFIED THE CONTRACTING OFFICE BY TELEPHONE THAT AN ERROR HAD BEEN MADE IN THE BID. THE ALLEGATION OF ERROR WAS CONFIRMED BY LETTER OF JULY 10, 1957. IT WAS EXPLAINED THAT THE ERROR WAS DUE TO A MISTAKE IN COMPUTING THE NUMBER OF POUNDS OF VIRGIN POLYETHYLENE RESIN REQUIRED FOR 1,000 LINERS AND THAT THE CORRECT PRICE SHOULD HAVE BEEN $78.84.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT WHETHER THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT. IT IS REPORTED THAT YOU WERE NOT ON NOTICE OF THE POSSIBILITY OF ERROR PRIOR TO AWARD. FURTHERMORE, IT WOULD APPEAR, AS STATED BY YOU, THAT THE DIFFERENCE OF $6.11 PER THOUSAND BETWEEN THE AMOUNT OF THE LOW BID AND THE NEXT-LOW BID COULD EASILY HAVE BEEN DUE TO THE LOW BIDDER'S REQUEST TO SHIP IN MULTIPLES OF 4,000. THERE APPEARS NOTHING ON THE FACE OF THE BID OR IN THE SURROUNDING CIRCUMSTANCES WHICH WOULD WARRANT CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. THE RECORD OTHERWISE INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. UNDER THESE CIRCUMSTANCES, THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL- - NOT MUTUAL--- AND THEREFORE AFFORDS NO BASIS FOR GRANTING RELIEF TO THE CONTRACTOR. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS FOR INCREASING THE CONSIDERATION SPECIFIED IN THE ACCEPTED BID OF POLY PLASTIC PRODUCTS, INC.

THE COPY OF THE CONTRACT IS RETURNED. THE OTHER PAPERS ARE BEING RETAINED HERE.