B-151424, JUNE 21, 1963, 42 COMP. GEN. 723

B-151424: Jun 21, 1963

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OF ERROR ACCEPTANCE OF AN ERRONEOUS BID AFTER THE LOW BIDDER HAS BEEN DENIED PERMISSION TO HAVE HIS BID CORRECTED TO INCLUDE INADVERTENTLY OMITTED TRANSPORTATION COSTS BECAUSE THE EVIDENCE DID NOT ESTABLISH THE INTENDED BID PRICE OR THAT THE BID AS CORRECTED WOULD REMAIN THE LOW BID WOULD BE PREJUDICIAL TO OTHER BIDDERS AND. 1963: REFERENCE IS MADE TO LETTER DATED APRIL 30. THE 12 BIDS RECEIVED WERE OPENED ON APRIL 2. THE SIX LOW BIDS ARE IN THE TOTAL AMOUNTS OF $40. THE INFORMATION REQUESTED WAS GIVEN AND AT THE SAME TIME. HE WAS REQUESTED TO CHECK THE BID THOROUGHLY AND TO CONFIRM THE BID IN WRITING. A REPRESENTATIVE OF THE LOW BIDDER VISITED THE CONTRACTING OFFICE AND ADVISED THAT A MISTAKE HAD BEEN MADE IN THE BID IN THAT THE TRANSPORTATION COSTS INVOLVED IN PICKING UP AND RETURNING THE ENGINES WERE NOT INCLUDED.

B-151424, JUNE 21, 1963, 42 COMP. GEN. 723

BIDS - MISTAKES - WAIVER, ETC., OF ERROR ACCEPTANCE OF AN ERRONEOUS BID AFTER THE LOW BIDDER HAS BEEN DENIED PERMISSION TO HAVE HIS BID CORRECTED TO INCLUDE INADVERTENTLY OMITTED TRANSPORTATION COSTS BECAUSE THE EVIDENCE DID NOT ESTABLISH THE INTENDED BID PRICE OR THAT THE BID AS CORRECTED WOULD REMAIN THE LOW BID WOULD BE PREJUDICIAL TO OTHER BIDDERS AND, THEREFORE, THE BIDDER MAY NOT UPON HIS REQUEST RECEIVE AN AWARD ON THE BASIS OF THE ORIGINAL BID.

TO THE SECRETARY OF THE ARMY, JUNE 21, 1963:

REFERENCE IS MADE TO LETTER DATED APRIL 30, 1963, FROM THE ASSISTANT DIRECTOR OF PROCUREMENT, REQUESTING A DECISION CONCERNING THE BID OF RAMIREZ ENTERPRISES UNDER INVITATION FOR BIDS NO. AIV-41-093-63-50, ISSUED BY THE PURCHASING AND CONTRACTING OFFICE, FORT HOOD, TEXAS.

THE INVITATION, ISSUED ON JANUARY 24, 1963, REQUESTED BIDS FOR THE REPAIR OF 400 EACH 1/4-TON WILLYS-OVERLAND ENGINES. THE INVITATION PROVIDES THAT THE CONTRACTOR SHALL BE RESPONSIBLE FOR ALL TRANSPORTATION COSTS INVOLVED IN THE PICKING UP AND RETURN OF ENGINES, ACCESSORIES, EXCESS SERVICEABLE PARTS, AND UNSERVICEABLE PARTS.

THE 12 BIDS RECEIVED WERE OPENED ON APRIL 2, 1963. THE SIX LOW BIDS ARE IN THE TOTAL AMOUNTS OF $40,221.90, $47,920.95, $49,057, $50,807.75, $51,675.40 AND $51,785.75. SHORTLY AFTER THE OPENING OF THE BIDS A REPRESENTATIVE OF THE LOW BIDDER, RAMIREZ ENTERPRISES, CONTACTED THE CONTRACTING OFFICE BY TELEPHONE REQUESTING A SUMMARY OF THE BIDS RECEIVED. THE INFORMATION REQUESTED WAS GIVEN AND AT THE SAME TIME, IN VIEW OF THE LOWNESS OF THE BID, HE WAS REQUESTED TO CHECK THE BID THOROUGHLY AND TO CONFIRM THE BID IN WRITING. ON APRIL 4, 1963, A REPRESENTATIVE OF THE LOW BIDDER VISITED THE CONTRACTING OFFICE AND ADVISED THAT A MISTAKE HAD BEEN MADE IN THE BID IN THAT THE TRANSPORTATION COSTS INVOLVED IN PICKING UP AND RETURNING THE ENGINES WERE NOT INCLUDED. THE REPRESENTATIVE WAS ADVISED TO SUBMIT IN WRITING A COMPLETE EXPLANATION, ORIGINAL WORKSHEETS, AND OTHER DOCUMENTATION TO SUPPORT THE ALLEGED ERROR.

BY LETTER DATED APRIL 8, 1963, RAMIREZ ENTERPRISES SUBMITTED WORKSHEETS FOR THE PURPOSE OF SHOWING THE BASIS FOR THE BID, AND IT IS STATED THEREIN THAT THE TRANSPORTATION COSTS INVOLVED IN PICKING UP AND RETURNING THE ENGINES WERE OMITTED. THE PRIMARY REASONS GIVEN FOR THE OMISSION WERE THAT THREE PEOPLE WERE INVOLVED IN PREPARING THE ESTIMATE WITHOUT EVER MEETING FACE TO FACE AND THAT IT APPARENTLY WAS ASSUMED THAT THIS CONTRACT WOULD BE THE SAME AS PREVIOUS GOVERNMENT CONTRACTS THE COMPANY HAD PERFORMED, UNDER WHICH THE GOVERNMENT WAS TO DELIVER THE ITEMS TO BE REPAIRED. THERE WERE ALSO SUBMITTED WITH THE LETTER ESTIMATES OF $10,993.90 AND $10,155.80, USING RATES OF TWO COMMON CARRIERS, AS THE COST OF HAULING THE MATERIAL FROM FORT HOOD TO THE BIDDER'S SHOP IN OKLAHOMA CITY, OKLAHOMA, AND RETURN AFTER REPAIR, AND AN ESTIMATE OF $3,898.50 FOR THE HAULING WITH A VEHICLE TO BE RENTED BY THE COMPANY. THE LETTER OF APRIL 8 CONCLUDED WITH THE FOLLOWING STATEMENT:

WITH THIS EXPLANATION IT IS REQUESTED THAT THE FREIGHT ESTIMATE ATTACHED FOR $3898.50 BE INCLUDED IN OUR BID PRICE AT TIME OF CONTRACT NEGOTIATION.

THE ALLEGED MISTAKE WAS CONSIDERED IN ACCORDANCE WITH THE PROVISIONS OF ARMED SERVICES PROCUREMENT REGULATION 2-406.3 AND IT WAS DETERMINED THAT THE BIDDER ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THE EXISTENCE OF THE ERROR BUT NOT THE BID INTENDED AND THAT, THEREFORE, THE BID COULD BE WITHDRAWN. THIS DETERMINATION WAS COMMUNICATED TO RAMIREZ ENTERPRISES WHO ADVISED THAT IT DID NOT WISH TO WITHDRAW THE BID. THEREAFTER, THE BIDDER WAS ADVISED THAT THE BID WOULD BE DISREGARDED IN MAKING THE AWARD. LETTER DATED APRIL 23, 1963, THE BIDDER PROTESTED SUCH ACTION ON THE BASIS THAT IT NEVER REQUESTED WITHDRAWAL OF THE BID AS SUBMITTED AND ONLY REQUESTED THAT TRANSPORTATION COSTS IN THE AMOUNT OF $3,898.50 BE ADDED THERETO, IF AUTHORIZED. IT IS STATED THAT IT WAS THEIR UNDERSTANDING THAT THE REQUEST FOR CORRECTION WOULD NOT JEOPARDIZE THEIR BID AS SUBMITTED.

THE QUESTION THUS PRESENTED IS WHETHER ONCE HAVING ALLEGED AND ESTABLISHED THAT AN ERROR HAS BEEN MADE IN HIS BID, AND PERMISSION HAS BEEN GRANTED TO WITHDRAW BUT NOT CORRECT THE BID, THE BIDDER MAY UPON HIS REQUEST RECEIVE AWARD ON THE BASIS OF THE ORIGINAL BID.

THERE WOULD APPEAR NO DOUBT BUT THAT RAMIREZ ENTERPRISES MADE A MISTAKE IN ITS BID IN FAILING TO INCLUDE TRANSPORTATION COSTS. THE DIFFERENCE BETWEEN THE BID OF RAMIREZ ENTERPRISES AND THE OTHER BIDS RECEIVED, WHICH ARE REASONABLY CLOSE, IS ABOUT THE AMOUNT WHICH WOULD BE INVOLVED FOR THE TRANSPORTATION COSTS. THE BIDDER HIMSELF STATES THAT THE TRANSPORTATION COSTS WOULD AMOUNT TO BETWEEN $10,000 AND $11,000, IF THE MOVEMENT WERE MADE BY COMMON CARRIER, AND THE TRANSPORTATION OFFICER HAS ESTIMATED THE COST AS $7,776. IF EITHER OF THESE AMOUNTS BE ADDED TO THE AMOUNT OF RAMIREZ ENTERPRISES' BID THAT BID WOULD NO LONGER BE LOW.

IT IS SETTLED LAW THAT A BIDDER UNDER AN ADVERTISED FEDERAL INVITATION FOR BIDS MAY NOT MODIFY OR WITHDRAW ITS BID AFTER BIDS HAVE BEEN OPENED. REFINING ASSOCIATES, INC. V. UNITED STATES, 109 F.SUPP. 259, 124 CT.CL. 115. IT HAS BEEN HELD, HOWEVER, THAT WHERE THE PUBLIC BODY, AS HERE, IS ON NOTICE OF ERROR IN A BID WHICH HAS BEEN SUBMITTED, ACCEPTANCE OF THAT ERRONEOUS BID WILL NOT RESULT IN THE FORMATION OF AN ENFORCEABLE CONTRACT. MOFFETT, HODGKINS AND CLARKE CO. V. ROCHESTER, 178 U.S. 373. FOR THIS REASON, IT HAS BEEN A LONG STANDING PRACTICE IN FEDERAL PROCUREMENT TO PERMIT WITHDRAWAL OF A BID UPON CONVINCING PROOF OF ERROR THEREIN. AND IN APPROPRIATE CASES, WHERE THERE IS CLEAR AND CONVINCING EVIDENCE OF THE INTENDED CORRECT BID, AND WHERE THAT INTENDED BID IS STILL THE LOWEST BID, WE HAVE SANCTIONED ACCEPTANCE OF THE CORRECTED BID.

IN THE PRESENT CASE RAMIREZ, BY REASON OF ITS OWN MISTAKE, COULD CHOOSE AFTER THE OTHER BIDS WERE DISCLOSED BETWEEN WITHDRAWING ITS BID ON THE GROUND OF MISTAKE, SEEKING CORRECTION THEREOF, OR STANDING ON THE ERRONEOUS BID, AS SEEMED TO BE IN ITS BEST INTEREST. IT NOW SEEKS, AFTER CORRECTION HAS BEEN DENIED, TO WAIVE ITS UNDOUBTED RIGHT TO WITHDRAW, AND ASKS TO RECEIVE AN AWARD ON THE BASIS OF ITS ERRONEOUS BID. WE BELIEVE ACCEPTANCE OF RAMIREZ- ADMITTEDLY ERRONEOUS BID UNDER THE CIRCUMSTANCES IN THIS CASE WOULD BE CONTRARY TO THE PRINCIPLES OF COMPETITIVE BIDDING AND DETRIMENTAL TO THE PURPOSES SOUGHT TO BE ACHIEVED BY THE FEDERAL PROCUREMENT STATUTES.

IF THE EVIDENCE WERE CLEAR AND CONVINCING THAT RAMIREZ WOULD HAVE BEEN THE LOWEST BIDDER ABSENT ERROR IN ITS BID, EVEN THOUGH THE AMOUNT OF ITS CORRECT OR "INTENDED" BID COULD NOT BE CLEARLY PROVEN, IT WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS IF RAMIREZ RECEIVED THE AWARD. THE ACTUAL FACTS OF THE CASE ARE THAT PROOF IS LACKING AS TO WHAT RAMIREZ- BID WOULD HAVE BEEN BUT FOR THE ERROR, AND IT IS VERY DOUBTFUL WHETHER A NONERRONEOUS BID BY RAMIREZ WOULD HAVE BEEN THE LOWEST BID. WE FEEL THAT THE CASE FALLS WITHIN THE RATIONALE OF SECTION 2-406.3 (E) (2) OF THE ARMED SERVICES PROCUREMENT REGULATION, WHICH PROVIDES AS FOLLOWS:

WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS. * * *

IN VIEW OF WHAT HAS BEEN SAID, WE BELIEVE IT WOULD BE UNFAIR TO OTHER BIDDERS IF RAMIREZ- BID WERE TO BE ACCEPTED AS MADE.

ACCORDINGLY, YOU ARE ADVISED THAT THE BID OF RAMIREZ ENTERPRISES SHOULD BE DISREGARDED IN MAKING THE AWARD.