B-136245, JUNE 11, 1958, 37 COMP. GEN. 829

B-136245: Jun 11, 1958

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THE UNIT PRICE WILL GOVERN SHOULD ONLY BE MADE. ALLEGES THAT AN ERROR WAS MADE IN THE UNIT PRICE AND THAT THE EXTENDED PRICE WAS CORRECT MAY NOT BE CONSIDERED TO HAVE ENTERED INTO A VALID AND BINDING CONTRACT AND. IN VIEW OF THE FACT THAT THE BID IN THE ORIGINAL EXTENDED AMOUNT IS THE HIGHEST OF ALL BIDS RECEIVED. 1958: REFERENCE IS MADE TO LETTER DATED MAY 22. TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N228S-28281 IS BASED. BIDDERS WERE REQUESTED TO QUOTE A UNIT PRICE AND TOTAL AMOUNT FOR THE 963 PAIRS (TROUSERS AND SOCKS) COVERED BY THE ITEM. THE UNIT PRICE WILL GOVERN. WAS ACCEPTED ON APRIL 10. THE UNITED OVERSEAS CORPORATION ACKNOWLEDGED RECEIPT OF THE AWARD ON ITEM NO. 66 AND ADVISED THAT IT WAS NOTED THAT THE AWARD CONTAINED A UNIT PRICE OF $3.689.

B-136245, JUNE 11, 1958, 37 COMP. GEN. 829

SALES - BIDS - MISTAKES - UNIT PRICE V. EXTENSION ERROR- ADMINISTRATIVE CORRECTION THE ADMINISTRATIVE CORRECTION OF THE EXTENDED PRICE IN A BID SUBMITTED IN RESPONSE TO AN INVITATION WHICH PROVIDES THAT, IN CASE OF ERROR IN THE EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN SHOULD ONLY BE MADE, WITHOUT REQUESTING VERIFICATION FROM THE BIDDER, WHERE CORRECTION RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. A PURCHASER WHO, AFTER NOTICE OF AWARD, ON THE BASIS OF A SUBSTANTIAL CORRECTION BY THE CONTRACTING OFFICER OF THE EXTENDED PRICE TO AGREE WITH THE UNIT PRICE IN ACCORDANCE WITH THE TERMS OF THE INVITATION, ALLEGES THAT AN ERROR WAS MADE IN THE UNIT PRICE AND THAT THE EXTENDED PRICE WAS CORRECT MAY NOT BE CONSIDERED TO HAVE ENTERED INTO A VALID AND BINDING CONTRACT AND, IN VIEW OF THE FACT THAT THE BID IN THE ORIGINAL EXTENDED AMOUNT IS THE HIGHEST OF ALL BIDS RECEIVED, THE BID MAY BE MODIFIED.

TO THE SECRETARY OF THE NAVY, JUNE 11, 1958:

REFERENCE IS MADE TO LETTER DATED MAY 22, 1958, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FILE R11.2 L8/L8/NT4-28, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN CONCERNING AN ERROR ALLEGED BY THE UNITED OVERSEAS CORPORATION, LOS ANGELES, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N228S-28281 IS BASED.

THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, BY SALES CATALOG B-178 58- 228 INVITED BIDS ON A NUMBER OF ITEMS OF SURPLUS PROPERTY OFFERED FOR SALE. ITEM NO. 66 COVERED 732 PAIRS OF TROUSERS AND 231 PAIRS OF MEN'S SOCKS. BIDDERS WERE REQUESTED TO QUOTE A UNIT PRICE AND TOTAL AMOUNT FOR THE 963 PAIRS (TROUSERS AND SOCKS) COVERED BY THE ITEM. THE INVITATION CONTAINED THE USUAL PROVISION THAT IN CASE OF ERROR IN EXTENSION OF PRICE IN THE BID, THE UNIT PRICE WILL GOVERN.

IN RESPONSE TO THE INVITATION, UNITED OVERSEAS CORPORATION SUBMITTED A BID ON, AMONG OTHERS, ITEM NO. 66 OF $3.689 PER UNIT AND SHOWED THE TOTAL AMOUNT AS $2,955.29. IN ACCORDANCE WITH THE TERMS OF THE INVITATION THE CONTRACTING OFFICER CHANGED THE TOTAL AMOUNT QUOTED FOR ITEM NO. 66 TO $3,552.51 TO AGREE WITH THE UNIT PRICE QUOTED AND THE BID, AS SO CHANGED, WAS ACCEPTED ON APRIL 10, 1958.

BY UNDATED LETTER RECEIVED ON OR PRIOR TO APRIL 17, 1958, THE UNITED OVERSEAS CORPORATION ACKNOWLEDGED RECEIPT OF THE AWARD ON ITEM NO. 66 AND ADVISED THAT IT WAS NOTED THAT THE AWARD CONTAINED A UNIT PRICE OF $3.689, TOTAL $3,552.51, WHEREAS ITS OFFICE COPY OF THE INVITATION SHOWED THAT IT HAD BID $3.0689 PER UNIT, TOTAL $2,955.29, AND THAT, THEREFOR IT COULD NOT ACCEPT THE AWARD AT THE PRICE STATED THEREIN. BY LETTER DATED APRIL 17, 1958, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT ITS BID SHOWED THE UNIT PRICE AS $3.689 AND THAT THE EXTENDED AMOUNT OF $2,955.29 SHOWN IN THE BID WAS CHANGED TO $3,552.51 TO AGREE WITH THE UNIT PRICE IN ACCORDANCE WITH THE TERMS OF THE INVITATION. THEREAFTER THE CONTRACTOR SUBMITTED HIS WORKSHEET (COPY OF THE INVITATION) AND REQUESTED THAT IT BE PERMITTED TO PURCHASE THE MATERIALS FOR THE TOTAL AMOUNT OF $2,955.29 SHOWN IN ITS BID ON THE BASIS OF ITS INTENDED UNIT PRICE OF $3.0689.

ALTHOUGH THE INVITATION DOES PROVIDE THAT IN CASE OF ERROR IN EXTENSION OF PRICE IN THE BID THE UNIT PRICE WILL GOVERN, IT IS OUR OPINION THAT SUCH PROVISION SHOULD ONLY BE APPLIED, WITHOUT REQUESTING VERIFICATION, WHERE THE CORRECTION RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. SEE 15 COMP. GEN. 746; 36 ID. 429. IN THE INSTANT CASE THE CHANGE IS RATHER SUBSTANTIAL AND THE TOTAL AMOUNT SHOWN IN THE BID, $2,955.29, WAS THE HIGHEST OF THE 14 BIDS RECEIVED ON ITEM NO. 66. IN THE CIRCUMSTANCES AND SINCE THE BIDDER PROTESTED IMMEDIATELY UPON RECEIPT OF THE NOTICE OF AWARD, IT MAY NOT BE CONSIDERED THAT THERE EXISTS A VALID AND BINDING CONTRACT REQUIRING THE UNITED OVERSEAS CORPORATION TO TAKE THE MATERIAL COVERED BY ITEM NO. 66 AND PAY THE AMOUNT OF $3,552.51 THEREFOR.

ACCORDINGLY, AND SINCE THERE APPEARS NO BASIS FOR REASONABLE DOUBT BUT THAT THE UNIT PRICE WAS IN ERROR RATHER THAN THE EXTENDED AMOUNT, AND SINCE THE BID CONSIDERED ON THAT BASIS WOULD STILL BE THE HIGHEST BID RECEIVED, SALES CONTRACT NO. N228S-28281 SHOULD BE MODIFIED TO PROVIDE FOR UNIT PRICE OF $3.0689 AND FOR A TOTAL PRICE OF $2,955.29.