B-149282, AUG. 7, 1962

B-149282: Aug 7, 1962

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED JUNE 22. FOR RELIEF FROM A MISTAKE ALLEGED TO HAVE BEEN MADE IN THE PREPARATION OF ITS BID UNDER INVITATION FOR BIDS NO. IT WAS REPORTED THAT IN EVALUATING THE BIDS PRIOR TO AWARD THE CONTRACTING OFFICER NOTED THAT ALTHOUGH RANDALL DECORATORS HAD SUBMITTED A TOTAL BID PRICE FOR EACH OF THE THREE ITEMS IT HAD NOT SHOWN A UNIT PRICE. IT WAS ALSO NOTED THAT THE BID PRICE OF ITEM 2 WAS APPROXIMATELY 60 PERCENT LOWER THAN THE NEXT LOWEST BID RECEIVED FOR THAT ITEM. THE BID OF RANDALL DECORATORS AS TO ITEMS 1 AND 3 WAS IN LINE WITH THE OTHER BIDS RECEIVED BUT WAS NOT THE LOWEST BID RECEIVED ON THOSE ITEMS. ALSO ASKING WHETHER THE ITEM BEING OFFERED WAS ACCORDING TO SPECIFICATIONS.

B-149282, AUG. 7, 1962

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JUNE 22, 1962, WITH ENCLOSURES, FROM THE ACTING ADMINISTRATOR, SUBMITTING FOR CONSIDERATION AND DECISION BY OUR OFFICE A REQUEST BY RANDALL DECORATORS OF NEW BRIGHTON, STATEN ISLAND, NEW YORK, FOR RELIEF FROM A MISTAKE ALLEGED TO HAVE BEEN MADE IN THE PREPARATION OF ITS BID UNDER INVITATION FOR BIDS NO. SFEE B21102-62, ISSUED BY THE FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, SAN FRANCISCO, CALIFORNIA, UNDER DATE OF FEBRUARY 6, 1962.

UNDER THE CITED INVITATION FOR BIDS THE FEDERAL SUPPLY SERVICE AT SAN FRANCISCO REQUESTED BIDS FOR FURNISHING THREE TYPES OF CUSHION COVERS FOR LIVING ROOM FURNITURE FOR THE HICKEM AIR FORCE BASE IN HAWAII. IT WAS REPORTED THAT IN EVALUATING THE BIDS PRIOR TO AWARD THE CONTRACTING OFFICER NOTED THAT ALTHOUGH RANDALL DECORATORS HAD SUBMITTED A TOTAL BID PRICE FOR EACH OF THE THREE ITEMS IT HAD NOT SHOWN A UNIT PRICE. IT WAS ALSO NOTED THAT THE BID PRICE OF ITEM 2 WAS APPROXIMATELY 60 PERCENT LOWER THAN THE NEXT LOWEST BID RECEIVED FOR THAT ITEM. THE BID OF RANDALL DECORATORS AS TO ITEMS 1 AND 3 WAS IN LINE WITH THE OTHER BIDS RECEIVED BUT WAS NOT THE LOWEST BID RECEIVED ON THOSE ITEMS. THE CONTRACTING OFFICER SUSPECTED THAT A MISTAKE IN PRICE HAD BEEN MADE FOR ITEM 2 AND REQUESTED THE CONTRACTOR TO CONFIRM ITS BID PRICE; ALSO ASKING WHETHER THE ITEM BEING OFFERED WAS ACCORDING TO SPECIFICATIONS. IN REPLY THE CONTRACTOR LISTED THE UNIT PRICES FOR ALL THREE ITEMS, ALL OF WHICH ACCORDED WITH THE EXTENDED PRICES ON THE BID.

AS A RESULT OF THE CONFIRMATION OF PRICES AN AWARD WAS MADE TO RANDALL DECORATORS FOR ITEM 2 ON APRIL 12, 1962. BY LETTER DATED APRIL 16, 1962, THE CONTRACTOR STATED IT HAD MISUNDERSTOOD THE TERMS OF THE INVITATION IN THAT IT ASSUMED AN AWARD WAS TO BE MADE ON ALL THREE ITEMS IN THE AGGREGATE; ALSO, THAT IT WOULD BE UNABLE TO MANUFACTURE ITEM 2 ONLY FOR THE PRICE QUOTED.

BY LETTER DATED APRIL 19, 1962, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT SINCE THE PRICES HAD BEEN PREVIOUSLY CONFIRMED AND AN AWARD HAD BEEN MADE DELIVERY WAS REQUIRED TO BE MET AS SPECIFIED IN THE CONTRACT. THE CONTRACTOR REPLIED TO THE EFFECT THAT A MISTAKE HAD BEEN MADE ON ITEM 2 IN COPYING ITS PRICES FROM THE COST SHEETS TO THE BID SHEETS, AND IN SUPPORT OF ITS ALLEGATION OF ERROR THE CONTRACTOR SUBMITTED A COPY OF A STATEMENT SHOWING ITS ACTUAL COST FOR ITEM 2. IT WAS POINTED OUT IN THE LETTER OF JUNE 22, 1962, THAT 2 AND ONE-HALF YARDS OF MATERIAL ARE REQUIRED FOR EACH CUSHION AT A FABRIC COST OF $7.25 PER SET, AND THAT THE CONTRACTOR QUOTED A PRICE OF $6.75 PER SET, INCLUDING COST OF LABOR, THREAD, ZIPPER, AND MISCELLANEOUS COSTS, THUS MAKING IT OBVIOUS THAT THE CONTRACTOR WOULD SUSTAIN A LOSS ON THE TRANSACTION AT THE PRICE ORIGINALLY QUOTED. ALSO, THE CONTRACTING OFFICER MADE INQUIRY OF A LOCAL FABRIC SUPPLIER OF DENBURY TWEED TO ASCERTAIN WHETHER THE COST OF THE MATERIAL QUOTED BY THE CONTRACTOR WAS CORRECT. REPORT WAS RECEIVED WHICH SUBSTANTIATED THE CONTRACTOR'S STATEMENT AS TO THE COST OF THE MATERIAL.

IN REQUESTING CONFIRMATION OF THE BID PRICE FOR ITEM 2 THE CONTRACTING OFFICER DID NOT APPRISE THE BIDDER AS TO THE BASIS FOR SUCH REQUEST. THERE WAS TRANSMITTED WITH THE LETTER OF JUNE 22, 1962, A COST SHEET SHOWING THE CONTRACTOR'S ACTUAL MANUFACTURING COSTS TO BE THE SUM OF $4,324, PLUS OVERHEAD COSTS, AS AGAINST ITS BID OF $3,374.82, AND IT WAS STATED THAT ALLOWING FOR A REASONABLE PROFIT, A BID PRICE OF $5,190 WOULD APPEAR TO BE REASONABLE, IT BEING POINTED OUT THAT THE NEXT LOWEST BIDDER BID THE SUM OF $5,635 FOR ITEM 2.

IN VIEW OF THE EXTREME DISPARITY OF PRICES FOR ITEM 2 AND BECAUSE OF THE PERFUNCTORY FORM OF THE REQUEST FOR VERIFICATION, IT WAS RECOMMENDED IN THE LETTER OF JUNE 22, 1962, THAT RELIEF BE GRANTED THE CONTRACTOR BY AN ADJUSTMENT OF THE CONTRACT PRICE FROM $3,374.82 TO $5,190--- AN INCREASE OF $1,815.18.

IT IS THE GENERAL RULE THAT A BIDDER MAY NOT BE RELIEVED FROM THE CONSEQUENCES OF AN INCORRECT BID, ONCE HE HAS BEEN AFFORDED AN OPPORTUNITY OF CONFIRMING HIS ORIGINAL QUOTATION PRIOR TO AWARD. HOWEVER, THE FACTS IN THE INSTANT MATTER APPEAR TO MAKE THIS CASE AN EXCEPTION TO THE GENERAL RULE. SINCE THE CONTRACTOR'S BID WAS APPROXIMATELY 60 PERCENT LOWER THAN THE NEXT LOWEST BID AS TO ITEM 2, WE FEEL THAT THE CONTRACTING OFFICER PROPERLY SHOULD HAVE MADE THIS FACT KNOWN AT THE TIME WHEN CONFIRMATION OF THE BID WAS REQUESTED, AND IF THIS HAD BEEN DONE IT SEEMS REASONABLE TO ASSUME THAT THE CONTRACTOR WOULD HAVE CAREFULLY EXAMINED HIS BID AND THUS WOULD HAVE BEEN IN A POSITION TO HAVE ALLEGED ERROR PRIOR TO AWARD. OTHER WORDS, IT APPEARS THAT THE ENTIRE FACTUAL SITUATION WAS NOT BROUGHT TO THE BIDDER'S ATTENTION AND THEREFORE THE BIDDER WAS NOT GIVEN AN OPPORTUNITY IN A "COMPLETE SENSE" TO VERIFY ITS BID.

THE EVIDENCE PRESENTED APPEARS TO ESTABLISH THE EXISTENCE OF A MISTAKE IN BID. UNDER ALL THE FACTS AND CIRCUMSTANCES WE AGREE WITH THE RECOMMENDATION CONTAINED IN THE LETTER OF JUNE 22, 1962, THAT THE CONTRACT PRICE SHOULD BE INCREASED BY THE SUM OF $1,815.18, AND ACTION MAY BE TAKEN BY ..END :