B-150257, MAR. 8, 1963

B-150257: Mar 8, 1963

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THE INVITATION WAS ISSUED ON OCTOBER 12. BIDS WERE INVITED FOR THREE CATEGORIES. AWARDS WERE TO BE MADE WITHIN EACH CATEGORY TO A GROUP OF BIDDERS WHO WERE TO BE DETERMINED ON THE BASIS OF ESTIMATED UNITS OF PRODUCTION. IT WAS INDICATED THAT. THE ORDERING AGENCY HAD INFORMED YOUR OFFICE THAT IT WAS IN URGENT NEED OF SOURCES OF SUPPLY FOR THESE CATALOGS NOT LATER THAN FRIDAY. AFTER THE NOVEMBER 5 BID OPENING SEVERAL PROTESTS WERE RECEIVED FROM BIDDERS RELATING TO THE BID EVALUATION. YOUR OFFICE WAS STILL EVALUATING BID QUOTATIONS ON NOVEMBER 16. WHILE YOUR EVALUATORS WERE IN THE PROCESS OF EVALUATING THE BIDS. YOUR CONTRACTING OFFICER REPORTS THAT BECAUSE IT WAS OF PRIME IMPORTANCE TO MAKE THE AWARDS BY THE CLOSE OF BUSINESS ON NOVEMBER 16.

B-150257, MAR. 8, 1963

TO HONORABLE JAMES L. HARRISON, PUBLIC PRINTER, GOVERNMENT PRINTING OFFICE:

THIS REFERS TO YOUR LETTER OF JANUARY 29, 1963, WITH ENCLOSURES, REQUESTING OUR DECISION WHETHER A CONTRACT AWARDED TO AERO PRESS, BURBANK, CALIFORNIA, UNDER PROGRAM NO. 315, MAY BE CANCELED BECAUSE OF A MISTAKE IN BID ALLEGED BY THE CONTRACTOR. THE CONTRACT COVERS THE PRINTING AND BINDING OF BOOKS AND PAMPHLETS ENTITLED "DEFENSE SURPLUS BIDDERS CATALOG," WITH SADDLE-STITCHED, SIDE-STITCHED, OR LOOSE-LEAF BINDING, FOR THE TERM FROM NOVEMBER 17, 1962, THROUGH OCTOBER 31, 1963.

THE INVITATION WAS ISSUED ON OCTOBER 12, 1962. BIDS WERE INVITED FOR THREE CATEGORIES, WITH EACH CATEGORY REPRESENTING A NUMBER OF CATALOGS WHICH BIDDERS WOULD BE REQUIRED TO SUPPLY ON EACH ORDER. AS SPECIFIED IN THE INVITATION, AWARDS WERE TO BE MADE WITHIN EACH CATEGORY TO A GROUP OF BIDDERS WHO WERE TO BE DETERMINED ON THE BASIS OF ESTIMATED UNITS OF PRODUCTION. IT WAS INDICATED THAT, DURING THE CONTRACT PERIOD, THE ORDERING AGENCY (DEFENSE SUPPLY AGENCY) WOULD SELECT THE CONTRACTOR FOR AN INDIVIDUAL ORDER BY APPLYING THE UNIT PRICES QUOTED BY EACH OF THE SUCCESSFUL BIDDERS IN THE CATEGORY TO THE UNITS OF PRODUCTION INVOLVED IN THE PARTICULAR JOB. THE LOW CONTRACTOR WOULD BE CHOSEN TO PERFORM THE ORDER.

THE ORDERING AGENCY HAD INFORMED YOUR OFFICE THAT IT WAS IN URGENT NEED OF SOURCES OF SUPPLY FOR THESE CATALOGS NOT LATER THAN FRIDAY, NOVEMBER 16, 1962. AFTER THE NOVEMBER 5 BID OPENING SEVERAL PROTESTS WERE RECEIVED FROM BIDDERS RELATING TO THE BID EVALUATION. AS A RESULT, YOUR OFFICE WAS STILL EVALUATING BID QUOTATIONS ON NOVEMBER 16. YOU REPORT THAT ON NOVEMBER 16, WHILE YOUR EVALUATORS WERE IN THE PROCESS OF EVALUATING THE BIDS, YOUR OFFICE RECEIVED A TELEPHONE CALL FROM AERO PRESS, ADVISING THAT IT HAD MADE AN ERROR IN ITS BID ON CATEGORY 3. AERO DID NOT EXPLAIN AT THAT TIME HOW THE ERROR HAD BEEN MADE. YOUR CONTRACTING OFFICER REPORTS THAT BECAUSE IT WAS OF PRIME IMPORTANCE TO MAKE THE AWARDS BY THE CLOSE OF BUSINESS ON NOVEMBER 16, 1962, AND BECAUSE OF THE DISTANCE BETWEEN AERO (CALIFORNIA) AND THE BID OFFICE (WASHINGTON, D.C.), AND THE DELAY WHICH WOULD HAVE BEEN INVOLVED, IN OBTAINING INFORMATION NECESSARY TO EXPLAIN THE ALLEGED ERROR, HE BELIEVED IT PROPER TO EVALUATE AERO'S BID AS SUBMITTED. THE AWARDS WERE MADE FOR CATEGORY 3 ON NOVEMBER 16, 1962, AS FOLLOWS:

TABLE

BIDDERS EVALUATED BID

1. AERO PRESS $602,629.71

2. CARPENTER L AND P 639,819.10

3. LITHO PRESS 643,996.62

4. HURLEY 644,193.20

5. CATO SHOW 650,945.01

6. LYTLE CORPORATION 651,469.78

7. HOOVEN-DAYTON 653,356.18

8. HALL LITHO 657,522.84

ON NOVEMBER 19, 1962, THE CONTRACTING OFFICER RECEIVED A TELEGRAM FROM AERO, DATED NOVEMBER 17, 1962, REQUESTING THAT ITS BID BE WITHDRAWN DUE TO A MISCALCULATION IN BID. NO FURTHER INFORMATION WAS CONTAINED IN THE TELEGRAM. SUBSEQUENTLY, IN A LETTER DATED NOVEMBER 30, 1962, AERO EXPLAINED TO YOUR OFFICE THAT IN PREPARING ITS BID, AERO ASSUMED THAT 30 1/2 INCH WIDTH PAPER WOULD BE SUFFICIENT FOR THE WORK BUT LATER FOUND OUT THAT IT WOULD ACTUALLY NEED 33-INCH WIDTH PAPER. STATEMENTS HAVE BEEN FURNISHED FROM AERO SUPPLIERS INDICATING THAT AERO HAD REQUESTED QUOTATIONS ON 30 1/2-INCH WIDTH PAPER. INCLUDED ALSO IS A QUOTATION, DATED NOVEMBER 12, 1962, STATING THAT THE PRICE PER CWT. ON 33-INCH ROLLS IS THE SAME AS FOR 30 1/2-INCH ROLLS.

YOU REPORT THAT IT WOULD NOT BE POSSIBLE TO CUT OUT A SHEET FROM A ROLL ONLY 30 1/2 INCHES WIDE WHICH WOULD BE WIDE ENOUGH TO RUN A PRESS FORM WITHOUT EXCESSIVE WASTE; THAT A ROLL SIZE OF AT LEAST 32 INCHES WOULD BE NECESSARY IN ORDER TO PRINT EITHER OF THE SIZES OF THE PAMPHLETS AS DESCRIBED IN YOUR SPECIFICATIONS; AND THAT WHILE THE QUOTED PRICE FOR THE PAPER PER CWT. REMAINS THE SAME WHETHER IT IS FOR A 30 1/2-INCH ROLL OR A 33-INCH ROLL, MORE POUNDAGE WOULD BE REQUIRED TO COMPLETE A JOB USING THE LARGER SIZE ROLL.

THE ALLEGED ERROR CONCERNS PART I OF CATEGORY 3, COVERING "TEXT PAGES.' AERO OFFERED A UNIT PRICE (PRICE FOR 1,000 COPIES OF A SINGLE PAGE) OF $1.60 FOR THE FIRST 1,000 COPIES OF A SINGLE PAGE, AND ?60 FOR ADDITIONAL UNITS ON SIZE 1. ON SIZE 2 THE BIDDER QUOTED $2.20 FOR THE FIRST 1,000 PAGES, AND ?96 FOR ADDITIONAL UNITS. (SIZE 1 REFERS TO TRIM SIZE 5 1/8 BY 7 3/4 INCHES; SIZE 2 REFERS TO TRIM SIZE 7 7/8 BY 10 1/4 INCHES.) AERO STATES THAT ITS PRICE ON SIZE 1 FOR THE FIRST 1,000 SHOULD BE $1.63 WITH ADDITIONAL 1,000'S AT ?63; AND FOR SIZE 2 THE FIRST 1,000 SHOULD BE $2.26, AND THE ADDITIONAL 1,000'S SHOULD BE $1.02. AERO ESTIMATES THAT THESE PRICE CHANGES INVOLVE A BID EVALUATION CHANGE OF $24,994.32.

THE ORDERING AGENCY HAS ADVISED THAT IT ATTEMPTED TO PLACE ORDERS WITH AERO DURING LATE NOVEMBER 1962 AND IN DECEMBER 1962. EACH TIME THE CONTRACTOR DECLINED THE OFFER, STATING THAT IT HAD BEEN UNABLE TO OBTAIN THE REQUIRED PAPER FROM THE PAPER MILL.

YOU ESTIMATE THAT THE TOTAL COST OF ORDERS WHICH SHOULD HAVE BEEN PLACED WITH AERO PRESS (66 OUT OF 126 ORDERS, DURING THE PERIOD NOVEMBER 21, 1962, THROUGH JANUARY 14, 1963) AMOUNTS TO $38,503.43, WHEREAS THESE SAME ORDERS PLACED WITH THE SECOND LOW CONTRACTOR AMOUNTED TO $39,192.78, OR A DIFFERENCE OF $689.35.

WE DO NOT UNDERSTAND FROM THE FACTS PRESENTED WHY AERO PRESS DID NOT EXPLAIN ITS ALLEGATION OF MISTAKE IN BID WHEN IT TELEPHONED YOUR OFFICE ON NOVEMBER 16, 1962. IT SEEMS TO US THAT SINCE AERO HAD RECEIVED A PRICE QUOTATION ON NOVEMBER 12, 1962, REGARDING 33-INCH ROLLS OF PAPER, IT WAS ALREADY AWARE, AT LEAST TO SOME EXTENT, OF THE NATURE OF ITS MISTAKE.

HOWEVER THAT MAY BE, THE GENERAL RULE OF LAW IS THAT THE ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR OR MISTAKE THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT. SEE 17 COMP. GEN. 575, AND THE CASES CITED THEREIN.

THE FACTS SHOW THAT YOUR CONTRACTING OFFICER WAS AWARE ON NOVEMBER 16, 1962, BEFORE AWARDS WERE MADE, THAT AERO HAD ALLEGED A MISTAKE. HOWEVER, BECAUSE OF THE URGENT NEED TO MAKE AWARDS UNDER THIS PROGRAM NO LATER THAN NOVEMBER 16, 1962, THE CONTRACTING OFFICER DID NOT ATTEMPT TO OBTAIN EVIDENCE FROM THE BIDDER CONCERNING ITS ALLEGATION OF MISTAKE. HE FELT THAT HE HAD NO CHOICE OTHER THAN TO ACCEPT THE AERO BID AS SUBMITTED. SUBSEQUENTLY, AERO SUBMITTED EVIDENCE WHICH, IN THE OPINION OF YOUR CONTRACTING OFFICER, INDICATES THAT AERO DID MAKE A MISTAKE IN BID.

IT SEEMS TO US THAT THE GOVERNMENT MAY NOT DENY THAT IT HAD KNOWLEDGE OF MISTAKE WHEN IT ACCEPTED THE AERO BID. MISTAKE WAS ALLEGED AND THE GOVERNMENT DID NOT ATTEMPT TO DETERMINE WHETHER THE BIDDER WAS ABLE TO SUPPORT ITS ALLEGATION. IN FACT, IT APPEARS LIKELY THAT AERO COULD HAVE ESTABLISHED MISTAKE IF IT HAD BEEN REQUESTED TO DO SO BEFORE AWARD. UNDER THESE CIRCUMSTANCES WE MUST ASSUME THAT THE BIDDER ALLEGED A BONA FIDE MISTAKE IN BID PRIOR TO AWARD.

ACCORDINGLY, WE CONCLUDE THAT THE CONTRACT WITH AERO MAY BE CANCELED. SEE 36 COMP. GEN. 441.