B-134297, NOV. 20, 1957

B-134297, NOV. 20, 1957

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER FROM THE ACTING ADMINISTRATOR DATED NOVEMBER 1, 1957, SETTING OUT ERRORS IN BID PRICES ALLEGED, AFTER AWARD, BY THE PEIRCE WIRE RECORDER CORPORATION AND REQUESTING OUR OPINION AS TO WHETHER NEGOTIATED CONTRACT GS-OOS-15314, INCORPORATING SUCH BID PRICES,MAY BE CORRECTED TO REFLECT THE PRICES THE CONTRACTOR WOULD HAVE BID IN THE ABSENCE OF ERROR.

THE MATERIAL TRANSMITTED WITH THE ACTING ADMINISTRATOR'S LETTER INDICATES THAT THE CONTRACT IN QUESTION WAS NEGOTIATED UNDER THE PROVISIONS OF SECTION 302 (C) (9) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, AND IN COMPLIANCE WITH GSA MANUAL GS-5-1, SECTION 1502.20. ALTHOUGH NEITHER A COPY OF THE INVITATION NOR A COPY OF THE EXECUTED CONTRACT WAS FORWARDED WITH THE REQUEST FOR OUR DECISION IN THIS MATTER, IT APPEARS THAT THE CONTRACTOR WAS REQUIRED TO SUBMIT A PRICE LIST WITH HIS BID FOR APPROVAL AS SET OUT IN SECTION 1502.21 OF MANUAL GS-5-1, LISTING PRICES AT WHICH ATTACHMENTS, FEATURES AND SUPPLIES FOR PIERCE MAGNETIC BELT DICTATION EQUIPMENT, 500 SERIES "E," WOULD BE FURNISHED. THE LIST SUBMITTED BY THE CONTRACTOR QUOTED A PRICE OF $6.10 PER UNIT FOR TELEX Y CORDS, MODEL NOS. E-3617 AND E-3627, UNDER ITEM 54-M-31790-100, SUB-ITEMS 44 AND 45. CONTRACT NO. GS-OOS-15314 COVERING THE FISCAL YEAR 1958 AND INCORPORATING THESE PRICES WAS AWARDED TO THE CONTRACTOR ON JUNE 24, 1957, AND ON JULY 11, 1957, THE CONTRACTOR ALLEGED THAT THE PRICE OF $6.10 PER UNIT ON THE ABOVE SUB-ITEMS WAS IN ERROR AND SHOULD HAVE BEEN $12.20 PER UNIT. TO SUPPORT SUCH ALLEGATION, ON JULY 22, 1957, THE CONTRACTOR SUBMITTED TWO COMMERCIAL PRICE LISTS, ONE EFFECTIVE APRIL 25, 1956, LISTING THE PRICE OF THE ITEMS IN QUESTION AS $6.10, AND A SECOND CARRYING THE DATE NOVEMBER 19, 1956, LISTING THE ITEMS AT $12.20. THE LETTER TRANSMITTING SUCH LISTS STATED THAT THE PRICES OFFERED TO THE GOVERNMENT UNDER CONTRACT GS-OOS-3023 FOR FISCAL YEAR 1957 HAD BEEN TAKEN FROM THE LIST WHICH BECAME EFFECTIVE ON APRIL 25, 1956, AND THAT DURING NOVEMBER OF 1956 THE CONTRACTOR FIRST BECAME AWARE THAT IT WAS USING AN ERRONEOUS PRICE FOR TELEX Y CORDS. ACCORDINGLY, THE REVISED COMMERCIAL PRICE LIST DATED NOVEMBER 19, 1956, WAS ISSUED, ALTHOUGH THE CONTRACTOR STATES IT DID NOT FEEL THAT THE ERROR COULD BE CORRECTED IN THE GOVERNMENT PRICE SCHEDULE INCORPORATED INTO CONTRACT NO. GS-OOS-3023. THE CONTRACTOR FURTHER STATES THAT, IN ASSEMBLING INFORMATION UPON WHICH TO BASE ITS NEW BID FOR FISCAL YEAR 1958, AS MUCH COPY AS POSSIBLE WAS TAKEN FROM THE GOVERNMENT SCHEDULE FOR FISCAL YEAR 1957 AND THE ERRORS ON SUB-ITEMS 44 AND 45 IN THE NEW BID WERE NOT NOTICED UNTIL AFTER THE BID, AND PRESUMABLY THE AWARD, HAD BEEN MADE. BASED UPON THE PROOF OF ERROR SUBMITTED THE CONTRACTOR ASKS PERMISSION TO CORRECT THE PRICES ON SUB ITEMS 44 AND 45 TO $12.20 PER UNIT.

AN ERROR IN BID FIRST ALLEGED AFTER A CONTRACT HAS BEEN AWARDED PRESENTS NO BASIS TO SUPPORT REFORMATION OF THE CONTRACT UNLESS IT CAN BE SHOWN THAT THE MISTAKE WAS MUTUAL, OR WAS SO APPARENT AS TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF MISTAKE. SEE 23 COMP. GEN. 596 AND CASES CITED THEREIN. SEE ALSO PAGE 27 OF GSA BOARD OF REVIEW DOCKET NO. 342 AND OUR DECISION TO YOU DATED OCTOBER 12, 1956 (B- 129350), ALLOWING REFORMATION ON THE GROUND THAT THE CONTRACTING OFFICER WAS ON NOTICE OF FACTS CLEARLY INDICATING THE PROBABILITY OF ERROR.

THE FILE SUBMITTED TO THIS OFFICE IN THE INSTANT CASE, WHICH INCLUDES FINDINGS OF FACT BY THE CONTRACTING OFFICER, CONTAINS NO INDICATION THAT THE CONTRACTING OFFICER, PRIOR TO THE TIME OF CONTRACT AWARD, HAD ACTUAL KNOWLEDGE OF THE MISTAKES ALLEGED. NOR DOES IT APPEAR THAT ANY REASON EXISTS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF SUCH ERRORS. THE PRICES FOR SUB-ITEMS 44 AND 45 QUOTED ON THE CONTRACT FOR 1958 WERE IDENTICAL WITH THE PRICES WHICH HAD BEEN QUOTED BY THE CONTRACTOR FOR 1957, AT WHICH PRICES THE CONTRACTOR WAS APPARENTLY READY AND WILLING TO DELIVER SUCH ITEMS DURING THE PRIOR CONTRACT PERIOD. WHILE THE CONTRACTOR ALLEGES HE DISCOVERED THE QUOTED PRICE OF $6.10 WAS IN ERROR DURING THE PERIOD OF THE 1957 CONTRACT, IT DOES NOT APPEAR THAT HE ADVISED THE GOVERNMENT OF IT, AND THERE APPEARS TO BE NO BASIS UPON WHICH THE CONTRACTING OFFICER MAY BE CHARGED WITH NOTICE OF THE ERROR AT THAT TIME OR AT ANY TIME PRIOR TO JUNE 24, 1957, THE DATE OF AWARD OF THE PRESENT CONTRACT.

NO EVIDENCE OF COST TO THE CONTRACTOR OF THE ITEMS IN QUESTION, OR OF BID PRICES BY OTHER MANUFACTURERS OF SIMILAR EQUIPMENT HAS BEEN SUBMITTED, AND IN THE ABSENCE OF SUCH INFORMATION IT CANNOT BE SAID THAT ENFORCEMENT OF THE CONTRACT AS WRITTEN WOULD BE UNCONSCIONABLE.

ACCORDINGLY, WE FIND NO BASIS FOR REFORMATION OF THE PRESENT CONTRACT PRICES ON THE ITEMS IN QUESTION.