B-144252, OCT. 20, 1960

B-144252: Oct 20, 1960

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF OCTOBER 12. SHOULD BE RESCINDED BECAUSE OF AN ERROR IN BID ALLEGED AFTER THE CONTRACT WAS AWARDED FOLLOWING VERIFICATION OF THE BID PRICE. THE NINE OTHER BIDS RECEIVED WERE $7.65. TELEPHONED THE LOW BIDDER AND REQUESTED THAT IT CONFIRM ITS BID PRICE AND DELIVERY SCHEDULE AND FURNISH A STATEMENT OF WHETHER IT IS A SMALL BUSINESS AND IF IT CONTEMPLATES USING GOVERNMENT-OWNED EQUIPMENT. FOLLOWING RECEIPT OF THE VERIFICATION CONTRACT DA-01-021-ORD-12168 WAS AWARDED. THE PROSPECTIVE SUPPLIER EXPLAINS THAT THE QUOTATION IT FURNISHED THE CONTRACTOR BEFORE IT BID WAS ERRONEOUS DUE TO THE FACT THAT IT WAS BASED UPON MISINFORMATION BY ANOTHER SUPPLIER THAT THE PART NUMBER HAD BEEN SUPERSEDED BY ANOTHER PART NUMBER.

B-144252, OCT. 20, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF OCTOBER 12, 1960, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION WHETHER CONTRACT DA-01 -021-ORD-12168 WITH AIRCO SUPPLY COMPANY, INC., SHOULD BE RESCINDED BECAUSE OF AN ERROR IN BID ALLEGED AFTER THE CONTRACT WAS AWARDED FOLLOWING VERIFICATION OF THE BID PRICE.

IN RESPONSE TO INVITATION IDP-X-ORD-01-021-61-10005, SOLICITING BIDS FOR FURNISHING 770 UNITS OF A PARTICULAR HOSE ASSEMBLY, AIRCO SUPPLY COMPANY, INC., BID $4.49 EACH. THE NINE OTHER BIDS RECEIVED WERE $7.65, $8.71, $8.75, $8.99, $14.65, $16.30, $16.60, $18 AND $19.70.

PRIOR TO MAKING THE AWARD, THE BUYER ACTING FOR THE CONTRACTING OFFICER, TELEPHONED THE LOW BIDDER AND REQUESTED THAT IT CONFIRM ITS BID PRICE AND DELIVERY SCHEDULE AND FURNISH A STATEMENT OF WHETHER IT IS A SMALL BUSINESS AND IF IT CONTEMPLATES USING GOVERNMENT-OWNED EQUIPMENT. THE BUYER DID NOT INFORM THE BIDDER OF THE DIFFERENCE BETWEEN ITS BID AND THE NEXT LOW BID. THE BIDDER FURNISHED THE REQUESTED INFORMATION AND CONFIRMED ITS BID PRICE. FOLLOWING RECEIPT OF THE VERIFICATION CONTRACT DA-01-021-ORD-12168 WAS AWARDED.

TWO WEEKS LATER THE CONTRACTOR DISCOVERED THAT IT HAD BASED ITS BID UPON ERRONEOUS PRICING DATA FURNISHED BY ITS PROSPECTIVE SUPPLIER AND IT IMMEDIATELY ALLEGED ERROR. THE PROSPECTIVE SUPPLIER EXPLAINS THAT THE QUOTATION IT FURNISHED THE CONTRACTOR BEFORE IT BID WAS ERRONEOUS DUE TO THE FACT THAT IT WAS BASED UPON MISINFORMATION BY ANOTHER SUPPLIER THAT THE PART NUMBER HAD BEEN SUPERSEDED BY ANOTHER PART NUMBER.

THE CONTRACTOR HAS NOT PERFORMED UNDER THE CONTRACT AND IT HAS BEEN TERMINATED FOR DEFAULT. HOWEVER, THE SUCCESSOR CONTRACTING OFFICER RECOMMENDS THAT THE CONTRACT BE RESCINDED AND THE TERMINATION FOR DEFAULT CANCELED. HE POINTS OUT THAT WHEN THE CONTRACTOR WAS REQUESTED TO VERIFY ITS PRICE IT WAS NOT SPECIFICALLY ADVISED OF THE WIDE DISPARITY BETWEEN ITS PRICE AND THE NEXT LOW BID PRICE. THEREFORE, HE CONCLUDES THAT THERE WAS A FAILURE TO PUT THE BIDDER ON NOTICE OF THE ERROR SURMISED.

AS SUPPORT FOR HIS CONCLUSION, THE SUCCESSOR CONTRACTING OFFICER CITES SEVERAL OF OUR DECISIONS, AMONG THEM 35 COMP. GEN. 136, WHICH IS PARTICULARLY APPLICABLE TO THIS CASE SINCE WE THERE HELD THAT A CONTRACTOR IS NOT BOUND BY HIS CONTRACT OR LIABLE FOR EXCESS COSTS INCIDENT TO A REPLACEMENT CONTRACT WHERE THERE WAS A FAILURE TO PUT HIM ON NOTICE OF THE SPECIFIC MISTAKE SURMISED WHEN REQUESTED TO VERIFY THE BID PRICE.

THE PURPOSE OF REQUIRING PRICE CONFIRMATION AND OTHER INFORMATION WAS NOT EXPLAINED TO AIRCO SUPPLY COMPANY, INC. IN VIEW OF ALL THE INFORMATION THAT WAS BEING REQUIRED, THE BIDDER COULD HAVE EASILY CONSTRUED THE REQUEST MERELY AS AN ATTEMPT TO PERFECT THE UNDERSTANDING BETWEEN THE PARTIES INSTEAD OF AS NOTICE OF POSSIBLE ERROR. IN THESE CIRCUMSTANCES, WE CONCLUDE THAT THE TELEPHONE REQUEST FOR VERIFICATION WAS NOT ADEQUATE TO PUT THE BIDDER ON NOTICE THAT AN ERROR WAS SUSPECTED AND TO AFFORD IT A SUFFICIENT OPPORTUNITY TO CHECK ITS QUOTATION. THEREFORE, WE ARE OF THE OPINION THAT THE PURPORTED ACCEPTANCE OF THE BID DID NOT RESULT IN A VALID, BINDING CONTRACT.