B-152019, AUG. 20, 1963

B-152019, AUG. 20, 1963

TO AJAX CORRUGATED PAPER COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF JULY 10 AND 17, 1963, WITH ENCLOSURES, PROTESTING AGAINST THE DETERMINATION OF THE POST OFFICE DEPARTMENT TO PERMIT WITHDRAWAL BUT NOT CORRECTION OF YOUR BID SUBMITTED IN RESPONSE TO INVITATION NO. 272, ISSUED ON APRIL 5, 1963, BY THE CONTRACT BRANCH, PROCUREMENT DIVISION, BUREAU OF FACILITIES.

THE INVITATION REQUESTED BIDS--- TO BE OPENED ON APRIL 26, 1963--- FOR FURNISHING 180,000 FIBERBOARD FOLDERS FOR DELIVERY TO FOUR AREA POST OFFICE SUPPLY CENTERS. IN RESPONSE YOU SUBMITTED A BID OFFERING TO FURNISH THE FOLDERS AT UNIT PRICES RANGING FROM $44.76 TO $47.28 PER THOUSAND OR FOR AN AGGREGATE TOTAL PRICE OF $8,302.30. THE TWO OTHER BIDDERS ON THE FOLDERS QUOTED AGGREGATE TOTAL PRICES OF $15,588.50 AND $16,041.

IT IS REPORTED THAT WHEN THE BIDS WERE OPENED IT WAS NOTED THAT YOUR BID PRICES FOR THE FOLDERS WERE APPROXIMATELY ONE-HALF OF THE PRICES QUOTED BY THE TWO OTHER BIDDERS AND THAT THEREFORE YOUR FIRM WAS REQUESTED BY TELEGRAM DATED MAY 6, 1963, TO VERIFY ITS BID; THAT ON THE SAME DAY MR. BERNARD OF YOUR FIRM VISITED THE CONTRACTING OFFICE AND VERBALLY ALLEGED THAT YOUR COMPANY HAD MADE AN ERROR IN ITS BID; AND THAT AT THAT TIME MR. BERNARD WAS SHOWN THE REQUIREMENTS OF FPR 1-2.406 REGARDING THE SUBMISSION OF ADDITIONAL EVIDENCE IN SUPPORT OF AN ALLEGATION OF ERROR.

BY LETTER DATED MAY 8, 1963, YOUR FIRM SUBMITTED TO THE CONTRACTING OFFICE ITS ORIGINAL AND REVISED ESTIMATE SHEETS AND CERTAIN QUOTATIONS RECEIVED FROM YOUR SUBCONTRACTORS. IN THE LETTER YOU STATED THAT THE ORIGINAL QUOTATIONS RECEIVED FROM YOUR SUBCONTRACTORS WERE VERBAL AND THAT THE ORAL QUOTATION ON THE DIE CUTTING WAS MISUNDERSTOOD BY YOUR ESTIMATOR; THAT THE CORRECT PRICE FOR DIE CUTTING IS $16.80 INSTEAD OF $6.80 PER THOUSAND; THAT THE ORAL QUOTATION OF $107.50 PER TON RECEIVED ON THE FIBERBOARD WAS EITHER MISREPRESENTED BY THE SUPPLIER OR MISUNDERSTOOD BY YOUR ESTIMATOR; AND THAT THE CORRECT PRICE FOR THE FIBERBOARD IS $137.50 PER TON. A COMPARISON OF YOUR ORIGINAL AND REVISED ESTIMATE SHEETS INDICATES THAT YOUR ORIGINAL BID PRICES ON THE FOLDERS WERE BASED ON USING A FIBERBOARD WHICH WEIGHS LESS THAN THAT REQUIRED BY THE SPECIFICATIONS. WITH REGARD TO THE DIE CUTTING QUOTATION RECEIVED FROM THE SERV-U-MFG. COMPANY IT IS NOTED THAT SUCH QUOTATION BEARS THE DATE "MAY 1963" WHICH IS SUBSEQUENT TO THE DATE OF THE BID OPENING AND ALSO THAT SUCH QUOTATION IS NOT A CONFIRMATION OF AN ORAL QUOTATION WHICH YOU STATE YOU RECEIVED PRIOR TO SUBMISSION OF YOUR BID.

THE ALLEGED MISTAKE WAS CONSIDERED BY THE DIRECTOR, PROCUREMENT DIVISION, IN ACCORDANCE WITH THE PROVISIONS OF FPR 1-2.406-3 (D) (5) AND IT WAS ADMINISTRATIVELY DETERMINED BY HIM THAT YOUR FIRM'S BID WAS SO FAR OUT OF LINE WITH THE AMOUNTS OF THE OTHER BIDS SO AS TO REASONABLY JUSTIFY THE CONCLUSION THAT AN ERROR WAS MADE THEREIN AND THAT THE ACCEPTANCE OF YOUR ORIGINAL BID WOULD BE UNFAIR TO YOU OR TO OTHER BONA FIDE BIDDERS. ALSO WAS ADMINISTRATIVELY DETERMINED THAT THE INFORMATION SUBMITTED BY YOU IN SUPPORT OF YOUR REQUEST FOR CORRECTION DID NOT CONSTITUTE CLEAR AND CONVINCING EVIDENCE OF THE BID ACTUALLY INTENDED. WITHDRAWAL, BUT NOT CORRECTION, WAS AUTHORIZED BY THE DIRECTOR. ON JUNE 25, 1963, THE CONTRACT WAS AWARDED TO GAYLORD CONTAINER DIVISION, CROWN ZELLERBACH CORPORATION.

IN A LETTER DATED JULY 10, 1963, ADDRESSED TO OUR OFFICE, YOU PROTESTED THE DETERMINATION OF THE DIRECTOR, PROCUREMENT DIVISION, TO PERMIT WITHDRAWAL BUT NOT CORRECTION OF YOUR BID. YOU STATED THAT AT THE TIME YOUR MR. BERNARD VERBALLY ALLEGED THAT AN ERROR HAD BEEN MADE IN YOUR FIRM'S BID HE WAS SHOWN THE STATUTES CONCERNING ERRORS IN BIDS AND THAT HE WAS ADVISED THAT IF THESE ERRORS WERE CLEARLY SHOWN TO THE CONTRACTING OFFICER SUCH ERRORS WOULD BE CORRECTED; THAT MR. BERNARD FURNISHED EVIDENCE IN SUPPORT OF HIS ALLEGATION OF ERROR AS REQUESTED BY THE CONTRACTING OFFICE; AND THAT IT WAS NOT UNTIL AFTER AN AWARD HAD BEEN MADE TO ANOTHER BIDDER--- A LARGE BUSINESS FIRM--- THAT MR. BERNARD WAS INFORMALLY ADVISED THAT YOUR FIRM'S BID HAD BEEN REJECTED. IN YOUR LETTER YOU FURTHER STATED THAT YOUR TOTAL REVISED AND CORRECTED BID AMOUNTS TO $12,358; THAT A CONTRACT IN THIS INSTANCE WAS AWARDED TO A LARGE BUSINESS FIRM FOR $15,500; AND THAT IN VIEW OF THE STATEMENT APPEARING IN PARAGRAPH 21 OF STANDARD FORM 32, TO THE EFFECT THAT ,IT IS A POLICY OF THE GOVERNMENT AS DECLARED BY THE CONGRESS THAT A FAIR PORTION OF THE PURCHASES AND CONTRACTS FOR SUPPLIES AND SERVICES FOR THE GOVERNMENT BE PLACED WITH SMALL BUSINESS CONCERNS," YOU CANNOT UNDERSTAND WHY THIS CONTRACT HAS BEEN PLACED WITH A LARGE BUSINESS FIRM AT THE TAXPAYERS' EXPENSE OF MORE THAN $3,000.

THE PROCUREMENT IN QUESTION WAS NOT SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS CONCERNS. THEREFORE, A LARGE BUSINESS CONCERN WAS ELIGIBLE TO RECEIVE THE AWARD. THE DECISION AS TO WHETHER A PROCUREMENT SHOULD BE SET ASIDE IN WHOLE OR IN PART FOR SMALL BUSINESS CONCERNS IS WITHIN THE PROVINCE OF THE ADMINISTRATIVE AGENCY AND THE SMALL BUSINESS ADMINISTRATION.

THE FACT THAT THE GOVERNMENT WOULD HAVE SAVED APPROXIMATELY $3,000 BY PERMITTING YOUR FIRM TO CORRECT ITS BID MAY NOT BE ACCEPTED AS A PROPER BASIS FOR VIOLATING THE RULES ESTABLISHED BY OUR OFFICE FOR THE CORRECTION OF BIDS. THE BASIC RULE IS THAT BIDS MAY NOT BE CHANGED AFTER THE TIME FIXED FOR OPENING. THE EXCEPTION TO SUCH RULE, WHICH PERMITS CORRECTION OF A BID UPON SUFFICIENT EVIDENCE TO ESTABLISH THAT THE BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN THAT SET FORTH IN THE BID, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF PROBABLE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE AND CHANGE HIS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED, OR AS TO WHICH HE HAS SINCE CHANGED HIS MIND. SEE 17 COMP. GEN. 575, 577. IN THE PRESENT CASE YOU PROPOSE TO CHANGE AND INCREASE YOUR BID BY THE AMOUNT WHICH YOU NOW CONSIDER NECESSARY TO COVER THE COST OF THE MORE EXPENSIVE FIBERBOARD AND ALSO TO COVER THE ERROR MADE IN THE DIE CUTTING QUOTATION. WE ARE OF THE OPINION THAT THE CIRCUMSTANCES IN THIS CASE ARE NOT SUCH THAT WOULD WARRANT THE CORRECTION OF YOUR BID.

FOR THE REASONS ABOVE SET FORTH IT IS CONCLUDED THAT THERE IS NO VALID BASIS FOR OBJECTION BY OUR OFFICE TO THE ACTION OF THE PROCURING OFFICE IN DENYING CORRECTION OF YOUR BID AND MAKING THE AWARD TO ANOTHER BIDDER.