B-150425, JANUARY 16, 1963, 42 COMP. GEN. 383

B-150425, JANUARY 16, 1963, 42 COMP. GEN. 383

CONTRACTS - MISTAKES - SUBITEMS. BIDS - COMPETITIVE SYSTEM - EQUAL BIDDING BASIS FOR ALL UNDER AN INVITATION FOR BIDS ON AN ITEM CONSISTING OF 52 SUBITEMS, PRICES TO BE QUOTED BOTH IN THE AGGREGATE AND ON AN INDIVIDUAL SUBITEM BASIS, THE LOW AGGREGATE BIDDER WHO AFTER AWARD ALLEGES A MISTAKE IN HIS BID ON TWO SUBITEMS MAY NOT BE RELIEVED FROM HIS OBLIGATION UNDER THE CONTRACT, THE RULE THAT A CONTRACTING OFFICER IS UNDER NO DUTY TO COMPARE BID PRICES ON INDIVIDUAL ITEMS WHERE AWARD IS TO BE MADE IN THE AGGREGATE EQUALLY APPLYING TO SUBITEMS. A PROVISION IN AN INVITATION FOR BIDS WHICH PERMITS BIDDERS WHO ARE UNABLE TO FURNISH THE ITEMS SPECIFIED, OR WHO CONSIDER OTHER ITEMS APPROPRIATE, TO BID ON ITEMS THAT DIFFER FROM THOSE REQUIRED BY THE INVITATION CONTRAVENES THE FUNDAMENTAL PRINCIPLE OF PUBLIC BIDDING THAT ALL BIDDERS MUST BE ON THE SAME THING AND, THEREFORE, THE PROVISION SHOULD BE DELETED FROM FUTURE INVITATIONS.

TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE, JANUARY 16, 1963:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 6, 1962, WITH ENCLOSURES, FROM MR. KELLY T. MCCRACKEN, ACTING CHIEF, PROCUREMENT AND SUPPLY MANAGEMENT BRANCH, REQUESTING OUR DECISION AS TO THE ACTION TO BE TAKEN BY YOUR DEPARTMENT CONCERNING A MISTAKE IN BID ALLEGED BY THE A. Y. MCDONALD MANUFACTURING COMPANY, SIOUX CITY, IOWA, AFTER THE AWARD OF CONTRACT NO. PH80-63-34, DATED AUGUST 20, 1962.

THE RECORD SHOWS THAT BY INVITATION FOR BIDS NO. 888-8-9-62, DATED JULY 9, 1962, THE INDIAN HEALTH AREA OFFICE, UNITED STATES PUBLIC HEALTH SERVICE, ABERDEEN, SOUTH DAKOTA, REQUESTED BIDS--- TO BE OPENED AT 2:00 P.M. ON AUGUST 9, 1962--- FOR THE FURNISHING OF CERTAIN MISCELLANEOUS ITEMS. THE MISTAKE IN BID IN THIS CASE IS ALLEGED ONLY WITH RESPECT TO SUBITEMS 1 AND 2 UNDER ITEM VIII OF THE INVITATION WHICH CALLED FOR BIDS ON "1 LOT" CONSISTING OF 52 SUBITEMS OF MISCELLANEOUS CAST IRON PLUMBING FITTINGS. WHILE THE INVITATION ASKED FOR AN AGGREGATE PRICE FOR THE LOT, IT ALSO ASKED FOR PRICES ON EACH SUBITEM. IT WAS STATED IN THE LETTER OF DECEMBER 6, 1962, THAT THROUGH THREE AMENDMENTS TO THE INVITATION, NOMENCLATURES WERE MODIFIED FOR SUBITEMS 23, 24, AND 25; THAT SUBITEMS 21 AND 22 WERE DELETED, AND THAT CONSEQUENTLY BIDS WERE SUBMITTED ON 50 SUBITEMS.

PARAGRAPH NO. 3 OF THE SPECIAL CONDITIONS OF THE INVITATION PROVIDED AS FOLLOWS:

3. AWARDS. THE GOVERNMENT RESERVES THE RIGHT TO MAKE AWARD ON AN ITEM-BY -ITEM, GROUP OF ITEMS, OR IN THE AGGREGATE, WHICHEVER IS TO THE BEST INTEREST OF THE GOVERNMENT. THE GOVERNMENT ALSO RESERVES THE RIGHT TO REJECT ANY OR ALL BIDS RECEIVED.

AS REQUIRED BY THE QUOTED PROVISIONS OF PARAGRAPH 3 OF THE SPECIAL CONDITIONS, THE BIDS FOR ITEM VIII WERE EVALUATED ON THE BASIS OF THE TOTAL PRICE FOR THE LOT AND AWARD WAS MADE TO THE A. Y. MCDONALD MANUFACTURING COMPANY--- THE LOWEST RESPONSIBLE BIDDER--- AT ITS BID PRICE OF $3,161.53 FOR THE LOT.

THE CONTRACTING OFFICER REPORTED THAT THE MISTAKE IN BID WAS FIRST ALLEGED BY THE CONTRACTOR IN A TELEPHONE CALL MADE FOLLOWING THE RECEIPT OF NOTICE OF AWARD. BY LETTER OF SEPTEMBER 13, 1962--- ALMOST A MONTH AFTER THE AWARD--- THE CONTRACTOR FORMALLY ALLEGED A MISTAKE IN BID, AND ENCLOSED CONSIDERABLE DATA IN SUPPORT OF THE ALLEGED ERROR.

AS PREVIOUSLY POINTED OUT, THE INVITATION FOR BIDS ASKED FOR PRICES FOR EACH SUBITEM AND ALSO FOR AN AGGREGATE PRICE FOR THE LOT AS ONE ITEM. HOWEVER, PARAGRAPH 3 OF THE SPECIAL CONDITIONS INDICATED THAT AWARD WOULD NOT BE MADE FOR LESS THAN A SINGLE ITEM AND CLEARLY AUTHORIZED AWARD TO THE MCDONALD COMPANY AT ITS AGGREGATE BID PRICE OF $3,161.53 FOR THE LOT AS ITEM NO. VIII. WHILE EXCEPTIONS HAVE BEEN MADE IN CERTAIN CIRCUMSTANCES NOT HERE PRESENT, IT IS THE GENERAL RULE THAT A CONTRACTING OFFICER IS NOT UNDER A DUTY TO COMPARE BID PRICES ON INDIVIDUAL ITEMS WHERE AWARD IS TO BE MADE IN THE AGGREGATE. 17 COMP. GEN. 534. THIS RULE IS EQUALLY APPLICABLE TO SUBITEMS AND IS PARTICULARLY TRUE IN CASES SUCH AS THE INSTANT ONE WHERE THERE ARE A CONSIDERABLE NUMBER OF SUBITEMS AND THE AGGREGATE PRICES FOR THE WHOLE ITEM ARE CLOSE TO EACH OTHER.

THE RECORD IN THIS CASE INDICATES THAT THE ACCEPTANCE OF THE BID OF MCDONALD COMPANY, WAS IN GOOD FAITH, NO ERROR HAVING BEEN NOTICED OR ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

FURTHERMORE, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN THIS CASE WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 129, 163. IF, AS APPEARS FROM THE RECORD IN THIS CASE, THE CONTRACTOR INADVERTENTLY USED THE WRONG FIGURE FOR ITS BID PRICE, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, THE CONTRACTOR IS NOT ENTITLED TO BE RELIEVED FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ATTENTION IS ALSO INVITED TO THE OPINION RENDERED DECEMBER 5, 1962, BY THE COURT OF CLAIMS IN THE CASE OF ALLIED CONTRACTORS, INC. V. UNITED STATES, 129 CT.CL. 400. IN THAT CASE THE INVITATION FOR BIDS PROVIDED THAT THE WORK INVOLVED WOULD "BE AWARDED AS A WHOLE TO ONE BIDDER.' THERE WAS A GREAT DISCREPANCY BETWEEN THE PLAINTIFF'S BID AND THE OTHER BIDS ON ONE ITEM. HOWEVER, THE COURT FOUND THAT THE VARIANCE WAS NOT SUCH AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF ERROR SINCE HIS ATTENTION WAS DIRECTED PRIMARILY TO THE OVERALL BID, AND SINCE ON SUCH BASIS THE PLAINTIFF'S BID WAS IN LINE WITH OTHERS, THERE WAS NOTHING TO MAKE THE CONTRACTING OFFICER SUSPECT A MISTAKE HAD BEEN MADE AND THE PLAINTIFF'S PETITION WAS DISMISSED.

IN ADDITION TO WHAT HAS BEEN HEREINBEFORE SET FORTH, WE CONSIDER IT NECESSARY TO COMMENT UPON THE LANGUAGE APPEARING IN PARAGRAPH 4 OF THE SUPPLY SPECIAL CONDITIONS:

4. ALTERNATE ITEMS. IF UNABLE TO SUPPLY ITEMS EXACTLY AS SPECIFIED IN THE SCHEDULE OR IF CONSIDERED APPROPRIATE, PROPOSALS MAY BE SUBMITTED FOR ALTERNATE OR SUBSTITUTE ITEMS CLEARLY INDICATED AS SUCH. ANY DEVIATION FROM ITEM REQUESTED MUST BE ADEQUATELY DESCRIBED. SUCH PROPOSALS WILL BE CONSIDERED WHENEVER DEEMED APPROPRIATE BY THE CONTRACTING OFFICER.

THE QUOTED PARAGRAPH PERMITS BIDDERS, IN THE EVENT THEY ARE UNABLE TO SUPPLY ITEMS EXACTLY AS SPECIFIED IN THE SCHEDULE OR EVEN IF THEY MERELY CONSIDER OTHER ITEMS APPROPRIATE, TO BID ON DIFFERENT ITEMS. ONE OF THE FUNDAMENTAL PRINCIPLES OF PUBLIC COMPETITIVE BIDDING IS THAT ALL BIDDERS MUST BID ON THE SAME THING. THE PARAGRAPH IN QUESTION DIRECTLY CONTRAVENES THIS PRINCIPLE AND SHOULD BE DELETED FROM FUTURE INVITATIONS.

IN RESPONSE TO THE INFORMAL REQUEST OF MR. MCCRACKEN THE ENCLOSURES TO THE LATTER OF DECEMBER 6, 1962, ARE RETURNED HEREWITH.