B-144248, OCT. 25, 1960

B-144248: Oct 25, 1960

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THE RECORD DISCLOSES THAT THE INVITATION WAS ISSUED BY THE DEPARTMENT OF THE INTERIOR. THE BIDS WERE OPENED ON SEPTEMBER 9. 13 BIDS WERE RECEIVED ON BOTH ITEMS. CHANCE COMPANY WAS LOW BIDDER AS TO PRICE. THE SECOND LOW BID RECEIVED ON BOTH ITEMS WAS FOR A TOTAL OF $7. 970 WAS ACTUALLY THE FIGURE INTENDED FOR ONE UNIT AND THAT ITS BID SHOULD HAVE BEEN EXACTLY TWICE THAT AMOUNT. OUR DECISION IS REQUESTED AS TO WHETHER THE LOW BID OF A. THE GENERAL RULE IS THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT. 36 COMP. WHICH ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD. ARE RETURNED HEREWITH.

B-144248, OCT. 25, 1960

TO MR. J. C. KIMBALL:

WE REFER TO YOUR LETTER OF OCTOBER 12, 1960, REQUESTING OUR DECISION WITH RESPECT TO AN ERROR IN BID ALLEGED BY A. B. CHANCE COMPANY UNDER INVITATION FOR BIDS NO. (C) B-68, 162-A.

THE RECORD DISCLOSES THAT THE INVITATION WAS ISSUED BY THE DEPARTMENT OF THE INTERIOR, BUREAU OF RECLAMATION, DENVER, COLORADO, ON AUGUST 12, 1960, CALLING FOR TWO ITEMS OF DISCONNECTING SWITCHES. THE TWO ITEMS EACH PROVIDED FOR A LUMP-SUM PRICE; ITEM NO. 1 FOR 1 SWITCH, AND ITEM NO. 2 FOR 2 SWITCHES WITH THE AWARD TO BE MADE ON THE BASIS OF BIDS RECEIVED ON BOTH ITEMS. THE BIDS WERE OPENED ON SEPTEMBER 9, 1960, AND 13 BIDS WERE RECEIVED ON BOTH ITEMS. THE BIDS RANGED IN PRICE FROM A LOW OF $6,920 TO A HIGH OF $10,850, AS COMPARED WITH THE ENGINEER'S ESTIMATE OF $4,600 FOR ITEM NO. 1 AND $6,400 FOR ITEM NO. 2, OR A TOTAL OF $11,000.

A. B. CHANCE COMPANY WAS LOW BIDDER AS TO PRICE, QUOTING LUMP-SUM PRICES OF $3,950 AND $2,970 FOR ITEMS NO. 1 AND 2, RESPECTIVELY, OR A TOTAL OF $6,920. THE SECOND LOW BID RECEIVED ON BOTH ITEMS WAS FOR A TOTAL OF $7,080. SUSPECTING ERROR IN THE LOW BID, THE CONTRACTING OFFICER, BY LETTER OF SEPTEMBER 20, 1960, REQUESTED THAT THE LOW BIDDER CONFIRM ITS BID PRICES. THE BIDDER REPLIED BY LETTER OF SEPTEMBER 22, 1960, THAT IT HAD MADE AN ERROR IN THE QUOTATION ON ITEM NO. 2 IN THAT THE LUMP-SUM QUOTED PRICE OF $2,970 WAS ACTUALLY THE FIGURE INTENDED FOR ONE UNIT AND THAT ITS BID SHOULD HAVE BEEN EXACTLY TWICE THAT AMOUNT, OR $5,940. A. B. CHANCE COMPANY FURNISHED A WORK SHEET WHICH IT ALLEGES CONTAINS ITS ORIGINAL PRICE COMPUTATION FOR ITEM NO. 2. THE WORK SHEET INDICATES A PRICE COMPUTATION OF $2,970 PER SWITCH.

OUR DECISION IS REQUESTED AS TO WHETHER THE LOW BID OF A. B. CHANCE COMPANY MAY BE DISREGARDED IN MAKING THE AWARD.

THE GENERAL RULE IS THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT. 36 COMP. GEN. 441. THE EVIDENCE SUBMITTED HERE INDICATES THAT THE A. B. CHANCE COMPANY MADE AN ERROR IN ITS BID PRICE COMPUTATION, WHICH ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD. UNDER THESE CIRCUMSTANCES, THE BID OF A. B. CHANCE COMPANY SHOULD BE DISREGARDED IN MAKING AN AWARD UNDER THE SUBJECT INVITATION.

THE ENCLOSURES TO THE LETTER OF OCTOBER 12, 1960, ARE RETURNED HEREWITH.