B-144791, FEB. 21, 1961

B-144791: Feb 21, 1961

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GOVERNMENT PRINTING OFFICE: REFERENCE IS MADE TO A LETTER OF JANUARY 11. IS BASED. BARNES SUBMITTED THE ONLY BID WHICH WAS $17.65 PER THOUSAND. THE CONTRACTOR ADVISED THAT THE BID OF $17.65 WAS IN ERROR DUE TO THE BID BEING BASED ON 1. THE CONTRACTOR SUBMITTED EVIDENCE THAT THE PRICE OF $17.65 WAS BASED ON 1. THE CONTRACTING OFFICER HAS ADVISED THAT DUE TO AN EXTRA HEAVY WORKLOAD WHICH EXISTED AT THE TIME OF THE BID OPENING HE FAILED TO NOTE THAT THE QUOTED PRICE OF $17.65 WAS PROBABLY IN ERROR. HE STATED THAT HE SHOULD HAVE RECOGNIZED THE POSSIBILITY OF ERROR AND QUESTIONED THE BID PRICE BEFORE MAKING AN AWARD BECAUSE THE QUOTED PRICE OF $17.65 IS NOT CONSIDERED A FAIR AND REASONABLE PRICE TO PAY FOR 1.

B-144791, FEB. 21, 1961

TO HONORABLE JOHN M. WILSON, ACTING PUBLIC PRINTER, GOVERNMENT PRINTING OFFICE:

REFERENCE IS MADE TO A LETTER OF JANUARY 11, 1961, FROM THE FORMER PUBLIC PRINTER, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR A. R. BARNES AND COMPANY ALLEGES IT MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 11479, DATED DECEMBER 14, 1960, IS BASED.

ON DECEMBER 2, 1960, THE GOVERNMENT PRINTING OFFICE PLACED ON DISPLAY, IN THE GOVERNMENT PRINTING OFFICE, A REQUISITION WHICH IT HAD RECEIVED FROM THE NATIONAL INSTITUTES OF HEALTH IN ORDER TO OBTAIN COMPETITIVE BIDS ON THE PRODUCTION OF 1,000 PADS, 11 INCHES BY 8 1/2 INCHES, PADDED 100 SHEETS TO A PAD, PRINTED ONE SIDE ONLY ON C. W. WRITING, SUB. 24, ALL MATERIALS AND SERVICES TO BE FURNISHED BY THE CONTRACTOR. A. R. BARNES SUBMITTED THE ONLY BID WHICH WAS $17.65 PER THOUSAND.

ON DECEMBER 16, 1960, THE CONTRACTOR ADVISED THAT THE BID OF $17.65 WAS IN ERROR DUE TO THE BID BEING BASED ON 1,000 FORMS RATHER THAN ON 1,000 PADS OF 100 SHEETS EACH. THE CONTRACTOR SUBMITTED EVIDENCE THAT THE PRICE OF $17.65 WAS BASED ON 1,000 SHEETS OR 10 PADS. ALSO, THE CONTRACTOR SUBMITTED AN ESTIMATE SHEET SHOWING THE COST OF 1,000 PADS OF 100 SHEETS EACH TO BE $242.

THE CONTRACTING OFFICER HAS ADVISED THAT DUE TO AN EXTRA HEAVY WORKLOAD WHICH EXISTED AT THE TIME OF THE BID OPENING HE FAILED TO NOTE THAT THE QUOTED PRICE OF $17.65 WAS PROBABLY IN ERROR. ALSO, HE STATED THAT HE SHOULD HAVE RECOGNIZED THE POSSIBILITY OF ERROR AND QUESTIONED THE BID PRICE BEFORE MAKING AN AWARD BECAUSE THE QUOTED PRICE OF $17.65 IS NOT CONSIDERED A FAIR AND REASONABLE PRICE TO PAY FOR 1,000 PADS OF 100 SHEETS EACH. IT IS STATED THAT THE PAPER ALONE FOR THE PRODUCTION OF 1,000 PADS WOULD COST APPROXIMATELY $120.

THE BASIC QUESTION FOR CONSIDERATION IS WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT. AS A GENERAL RULE, WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, THE CONTRACT IS PRESUMED IN LAW TO EXPRESS THE UNDERSTANDING OF THE PARTIES. HOWEVER, IF A MATERIAL UNILATERAL MISTAKE IS MADE BY ONE PARTY AND ITS EXISTENCE IS OR SHOULD HAVE BEEN KNOWN TO THE OTHER PARTY, THE PARTY MAKING THE MISTAKE HAS A RIGHT OF RESCISSION. MOFFETT, HODGKINS, AND CLARKE CO. V. CITY OF ROCHESTER, 178 U.S. 373; C. N. MONROE MANUFACTURING CO. V. UNITED STATES, 143 F.SUPP. 449; ARMOUR AND CO. V. RENAKER, 202 F. 901; UNITED STATES V. JONES, 176 F.2D 278; 5 WILLISTON ON CONTRACTS, 1578; 3 CORBIN ON CONTRACTS 610, 614; 52 A.L.R.2D 802 AND ID. FOOTNOTE 9; 37 COMP. GEN. 685, 686.

SINCE THE CONTRACTING OFFICER HAS ADMITTED THAT HE SHOULD HAVE RECOGNIZED THE POSSIBILITY OF ERROR IT MUST BE PRESUMED THAT HE WAS ON CONSTRUCTIVE NOTICE OF ERROR.

ACCORDINGLY, THE PURCHASE ORDER SHOULD BE CANCELLED WITHOUT LIABILITY TO THE COMPANY.