B-133522, SEPTEMBER 24, 1957, 37 COMP. GEN. 210

B-133522: Sep 24, 1957

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WHICH WAS NOT OBVIOUS ON THE FACE OF THE BID. 1957: REFERENCE IS MADE TO THE PROTEST OF DOMAN HELICOPTERS. A REPORT ON THE MATTER WAS FURNISHED BY LETTER DATED SEPTEMBER 17. THE REPORT INDICATES THAT PROSPECTIVE BIDDERS WERE ADVISED THAT AN AWARD WOULD BE MADE TO THE BIDDER SUBMITTING THE LOWEST AGGREGATE BID ON ITEMS 1 TO 5. THAT UPON OPENING THE BIDS IT WAS NOTED THAT DOMAN HELICOPTERS. 098.10 WAS SUBMITTED BY THE INDUSTRIAL METAL FABRICATING COMPANY. THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE IN ITS BID ON ITEM 4 IN THAT THE UNIT PRICE FOR THAT ITEM SHOULD HAVE BEEN SHOWN AS BEING $28.50 RATHER THAN $78.50. THE FIRST NUMERAL OF THE UNIT PRICE WAS MISREAD AS A SEVEN INSTEAD OF A TWO. IT IS HEREBY DETERMINED THAT INDUSTRIAL METAL FABRICATING CO.

B-133522, SEPTEMBER 24, 1957, 37 COMP. GEN. 210

BIDS - MISTAKES - CORRECTION - LOW BID DISPLACEMENT TO PERMIT A BIDDER AFTER OPENING OF BIDS TO CORRECT AN ERROR, WHICH WAS NOT OBVIOUS ON THE FACE OF THE BID, SO THAT THE CORRECTED BID BECAME THE LOWEST BID AND DISPLACED ONE OR MORE BIDS WHICH HAD BEEN LOW WOULD BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS AND CONTRARY TO THE INTEREST OF THE GOVERNMENT IN THE PRESERVATION AND MAINTENANCE OF THE COMPETITIVE BIDDING SYSTEM.

TO THE SECRETARY OF THE NAVY, SEPTEMBER 24, 1957:

REFERENCE IS MADE TO THE PROTEST OF DOMAN HELICOPTERS, INC., AGAINST THE DECISION OF THE DEPARTMENT OF THE NAVY TO ALLOW THE INDUSTRIAL METAL FABRICATING COMPANY, INC., TO CORRECT ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. IFB-600-1233-57, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON, D.C., ON BEHALF OF THE BUREAU OF ORDINANCE, FOR SPECIFIED QUANTITIES OF GUIDED MISSILE CONTAINERS AND SPARE PARTS, ITEMS 1 TO 5, INCLUSIVE. A REPORT ON THE MATTER WAS FURNISHED BY LETTER DATED SEPTEMBER 17, 1957, FROM THE ASSISTANT SECRETARY ( MATERIAL).

THE REPORT INDICATES THAT PROSPECTIVE BIDDERS WERE ADVISED THAT AN AWARD WOULD BE MADE TO THE BIDDER SUBMITTING THE LOWEST AGGREGATE BID ON ITEMS 1 TO 5, INCLUSIVE; THAT UPON OPENING THE BIDS IT WAS NOTED THAT DOMAN HELICOPTERS, INC., HAD SUBMITTED THE LOWEST AGGREGATE BID IN THE AMOUNT OF $135,762.35, AND THAT THE NEXT LOWEST AGGREGATE BID IN THE AMOUNT OF $152,098.10 WAS SUBMITTED BY THE INDUSTRIAL METAL FABRICATING COMPANY, INC. THE RECORD FURTHER SHOWS THAT AFTER OPENING OF THE BIDS BUT PRIOR TO AWARD, THE INDUSTRIAL METAL FABRICATING COMPANY, INC., ALLEGED BY TELEGRAM DATED JUNE 12, 1957, THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE IN ITS BID ON ITEM 4 IN THAT THE UNIT PRICE FOR THAT ITEM SHOULD HAVE BEEN SHOWN AS BEING $28.50 RATHER THAN $78.50. IN A CONFIRMING LETTER DATED JUNE 22, 1957, THE INDUSTRIAL METAL FABRICATING COMPANY, INC., STATED THAT IN TRANSFERRING ITS UNIT PRICE FOR ITEM 4 FROM ITS ESTIMATE SHEET TO THE BID FORM, THE FIRST NUMERAL OF THE UNIT PRICE WAS MISREAD AS A SEVEN INSTEAD OF A TWO. THE CORPORATION SUBMITTED A PHOTOSTATIC COPY OF ITS ESTIMATE SHEET AND AFFIDAVITS OF ITS PRESIDENT AND ESTIMATOR TO SUBSTANTIATE ITS ALLEGATION OF ERROR. ON JULY 15, 1957, THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, DEPARTMENT OF THE NAVY, MADE THE FOLLOWING DETERMINATION:

ON THE BASIS OF THE FOREGOING FACTS AND EVIDENCE, IT IS HEREBY DETERMINED THAT INDUSTRIAL METAL FABRICATING CO., INC., SUBMITTED AN ERRONEOUS BID. IT IS FURTHER DETERMINED THAT THE EVIDENCE IS CLEAR AND CONVINCING THAT THIS COMPANY'S INTENDED BID FOR ITEM 4 WAS $28.50 EACH, TOTAL $11,970, MAKING ITS TOTAL AGGREGATE BID $131,098.10. ACCORDINGLY, THE BID MAY BE CORRECTED AND CONSIDERED AS INTENDED.

IT IS NOTED THAT IF, IN ACCORDANCE WITH THE DETERMINATION QUOTED ABOVE, THE BID OF THE INDUSTRIAL METAL FABRICATING COMPANY, INC., BE CORRECTED TO REFLECT ITS INTENDED BID PRICE FOR ITEM 4, THE BID WOULD BECOME THE LOWEST AGGREGATE BID ON ITEMS 1 TO 5, INCLUSIVE.

PARAGRAPH 2-405.2 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES, IN PERTINENT PART, THAT THE MILITARY DEPARTMENTS, IN CONNECTION WITH MISTAKES IN BIDS OF OTHER THAN AN OBVIOUS OR APPARENT CLERICAL NATURE, ARE AUTHORIZED TO PERMIT THE BIDDER TO CORRECT HIS BID UPON SUBMISSION OF CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. SUCH AUTHORITY MAY BE DELEGATED UNDER THE PARAGRAPH TO THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, AND WAS SO DELEGATED BY PARAGRAPH 2-405.1 OF THE NAVY PROCUREMENT DIRECTIVES. THE AUTHORITY TO MAKE SUCH CORRECTIONS WAS GRANTED TO YOUR DEPARTMENT BY OUR DECISION, 29 COMP. GEN. 393, SUBJECT TO THE EXPRESS CONDITION THAT THE PROCEDURE AUTHORIZED "CANNOT OPERATE TO DEPRIVE A BIDDER OF HIS RIGHT TO HAVE THE MATTER DETERMINED BY THIS OFFICE, SHOULD HE SO REQUEST.'

THE STATUTES REQUIRING ADVERTISEMENT FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IN CERTAIN CASES WHERE A MISTAKE HAS BEEN ALLEGED PROMPTLY AFTER OPENING OF BIDS BUT BEFORE AWARD OF THE CONTRACT, AND THERE HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE THAT A MISTAKE WAS MADE, ITS NATURE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE CORRECTED. THESE CASES HAVE BEEN RELATIVELY FEW IN NUMBER, AND THE ACTION HAS BEEN TAKEN ONLY WHERE THE EVIDENCE SUBMITTED ESTABLISHES BEYOND ALL DOUBT THE ACTUAL INTENTION OF THE BIDDER. INSOFAR AS THE CASES HAVE INVOLVED CORRECTIONS TO PERMIT INCREASES IN LOW BIDS, WHICH DID NOT AFFECT THE RELATIVE STANDING OF OTHER BIDDERS, THEY ARE IN LINE WITH THE DECISIONS OF THE COURTS WHICH HAVE ALLOWED ADDITIONAL COMPENSATION TO A LOW BID CONTRACTOR WHO, THOUGH REFUSED PERMISSION ADMINISTRATIVELY TO CORRECT HIS BID, HAS BEEN ABLE TO PRESENT SATISFACTORY PROOF THAT HIS BID WAS ERRONEOUS, TOGETHER WITH A CLEAR SHOWING AS TO WHAT HE INTENDED TO BID. EDMUND J. RAPPOLI COMPANY, INC. V. UNITED STATES, 98 C.1CLS. 499.

HOWEVER, WE HAVE ALMOST NEVER PERMITTED A CORRECTION OF AN ERROR IN BID WHICH WOULD RESULT IN A BID NOT THE LOWEST SUBMITTED BECOMING LOWEST, AND THE ONLY RECENT CASE INVOLVING SUCH A SITUATION, B-128175, JUNE 19, 1956, WAS ONE IN WHICH NOT ONLY THE ERROR BUT THE AMOUNT OF THE INTENDED BID WAS ASCERTAINABLE ON THE FACE OF THE INVITATION AND BID, SO THAT RESORT TO THE BIDDER'S WORK PAPERS OR OTHER EXTRANEOUS EVIDENCE WAS NOT ESSENTIAL. WHERE CORRECTION IS ALLOWED IN A BID WHICH IS ON ITS FACE THE LOWEST RECEIVED, AND THE CORRECTION DOES NOT MAKE IT HIGHER THAN THE NEXT LOWEST BID, THE RIGHTS OF OTHER BIDDERS ARE NOT SUBSTANTIALLY AFFECTED; BUT IN A CASE SUCH AS HERE PRESENTED, WHERE A DOWNWARD CORRECTION WOULD RESULT IN DISPLACEMENT OF ONE OR MORE OTHER BIDDERS, WE FEEL THAT THE INTEREST OF THE GOVERNMENT IN PRESERVING AND MAINTAINING THE COMPETITIVE BIDDING SYSTEM REQUIRES THAT THE RIGHTS OF OTHER BIDDERS BE CONSIDERED AS CALLING FOR DENIAL OF THE CORRECTION, EXCEPT WHERE IT CAN BE ASCERTAINED SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF.

YOU ARE THEREFORE ADVISED THAT THE QUOTED DETERMINATION OF THE BUREAU OF SUPPLIES AND ACCOUNTS IS NOT APPROVED.