B-152736, OCT. 28, 1963

B-152736: Oct 28, 1963

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A DECISION IS REQUESTED AS TO WHETHER CONTRACT NO. NO PAYMENTS HAVE BEEN MADE BY THE GOVERNMENT. THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAS BEEN CONSUMMATED. NO CONTRACT IS SO CONSUMMATED WHEN THE CONTRACTING OFFICER SUSPECTS AN ERROR IN BID AND FAILS TO SPECIFICALLY ADVISE THE BIDDER OF THE SUSPECTED ERROR AND TO REQUEST VERIFICATION OF THE BID. POSSIBLY COULD HAVE MATERIALS ON HAND OF THE PROPER LENGTH AND SIZE. WE BELIEVE THE CONTRACTING OFFICER'S SURMISE THAT THE LOW BIDDER MAY NOT HAVE MADE A MISTAKE DOES NOT RELIEVE HIM OF THE RESPONSIBILITY TO ADVISE THE BIDDER OF HIS SUSPICIONS AND TO SECURE VERIFICATION OF THE BID PRICE.

B-152736, OCT. 28, 1963

TO THE SECRETARY OF HEALTH, EDUCATION, AND WELFARE:

IN A LETTER OF OCTOBER 22, 1963, FROM CHIEF, PROCUREMENT AND SUPPLY, MANAGEMENT BRANCH, A DECISION IS REQUESTED AS TO WHETHER CONTRACT NO. PH 79-64-178, ENTERED INTO WITH PLYMOUTH HOMES CORPORATION, FOR FURNISHING 335 PRECUT PUMP HOUSES MAY BE CANCELED BECAUSE OF THE COMPANY'S ERROR IN ITS BID PRICE. PLYMOUTH HAS NOT COMMENCED CONSTRUCTION OF THE UNITS, AND NO PAYMENTS HAVE BEEN MADE BY THE GOVERNMENT.

PLYMOUTH DID NOT DISCOVER OR ALLEGE A MISTAKE IN COMPUTING ITS BID PRICE UNTIL AFTER AWARD OF THE CONTRACT. THEREFORE, THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAS BEEN CONSUMMATED. SEE 36 COMP. GEN. 27. NO CONTRACT IS SO CONSUMMATED WHEN THE CONTRACTING OFFICER SUSPECTS AN ERROR IN BID AND FAILS TO SPECIFICALLY ADVISE THE BIDDER OF THE SUSPECTED ERROR AND TO REQUEST VERIFICATION OF THE BID. SEE 39 COMP. GEN. 405, 407; ALSO SEE 37 COMP. GEN. 706, 707 AND CASES CITED THEREIN.

THE CONTRACTING OFFICER IN THE INSTANT CASE ADMITS THAT BECAUSE OF THE VARIANCE IN PRICES BETWEEN PLYMOUTH'S AND THE NEXT LOW BID, HE SUSPECTED THAT PLYMOUTH HAD POSSIBLY MADE AN ERROR. HOWEVER, AFTER A REVIEW OF THE FIRM'S BUSINESS INDICATED THAT THE LOW BIDDER DEALT IN WOOD PRODUCTS, AND POSSIBLY COULD HAVE MATERIALS ON HAND OF THE PROPER LENGTH AND SIZE, HE DECIDED, FOR REASONS WHICH APPEARED SUFFICIENT AT THE TIME, THAT PLYMOUTH MIGHT BE ABLE TO SUBMIT THE LOW OFFER. HOWEVER, THE FACT REMAINS THAT THE CONTRACTING OFFICER DID SUSPECT THE POSSIBILITY OF ERROR AND SUBSEQUENT EVENTS CONFIRMED THIS SUSPICION. WE BELIEVE THE CONTRACTING OFFICER'S SURMISE THAT THE LOW BIDDER MAY NOT HAVE MADE A MISTAKE DOES NOT RELIEVE HIM OF THE RESPONSIBILITY TO ADVISE THE BIDDER OF HIS SUSPICIONS AND TO SECURE VERIFICATION OF THE BID PRICE. SINCE HE FAILED TO DO THIS, NO VALID AND BINDING CONTACT CAME INTO EXISTENCE. ACCORDINGLY, THE CONTRACT AS MADE MAY BE CANCELED AND AWARDED TO THE NEXT LOWEST RESPONSIVE,RESPONSIBLE BIDDER.