B-152777, NOV. 12, 1963

B-152777: Nov 12, 1963

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A DECISION IS REQUESTED AS TO WHETHER CONTRACT NO. WERE AS FOLLOWS: CHART ITEM SMEAD A B C D 28 .072 .096 .097 .103 .113 29 .070 .099 .099 .104 .116 30 .077 .102 .105 .107 .124 THE COMPANY DID NOT ALLEGE A MISTAKE IN ITS PRICES FOR THE ABOVE ITEMS UNTIL SEPTEMBER 27. THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAD BEEN CONSUMMATED. THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED. IT MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF.

B-152777, NOV. 12, 1963

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

IN A LETTER OF OCTOBER 25, 1963, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, FILE 074B, A DECISION IS REQUESTED AS TO WHETHER CONTRACT NO. V7018P-7383 (A), AWARDED ON SEPTEMBER 4, 1963, TO THE SMEAD MANUFACTURING COMPANY, MAY BE AMENDED TO INCREASE THE PRICE OF ITEMS 28, 29 AND 30 THEREUNDER.

THE ABSTRACT OF BIDS ESTABLISHES THAT THE PRICES QUOTED BY THE VARIOUS BIDDERS, AFTER SUBTRACTING THE OFFERED DISCOUNTS, WERE AS FOLLOWS:

CHART

ITEM SMEAD A B C D

28 .072 .096 .097 .103 .113

29 .070 .099 .099 .104 .116

30 .077 .102 .105 .107 .124

THE COMPANY DID NOT ALLEGE A MISTAKE IN ITS PRICES FOR THE ABOVE ITEMS UNTIL SEPTEMBER 27, OVER THREE WEEKS AFTER THE AWARD HAD BEEN MADE. THEREFORE, THE SOLE QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT HAD BEEN CONSUMMATED. SEE 36 COMP. GEN. 27.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, IT MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. SEE 20 COMP. GEN. 652, 657, AND CASES CITED THEREIN. ON THE OTHER HAND, IF 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, THE GOVERNMENT'S ACCEPTANCE OF SUCH BID DOES NOT RESULT IN A BINDING CONTRACT. SEE 39 COMP. GEN. 405, 407; ALSO, SEE 37 COMP. GEN. 706, 707, AND CASES CITED THEREIN.

THE CONTRACTOR STATES THAT IT IS UNABLE TO DETERMINE WHERE OR HOW THE ERROR OCCURRED BECAUSE ITS ORIGINAL FIGURES HAVE BEEN MISPLACED, LOST OR ACCIDENTALLY DESTROYED. WE AGREE WITH THE CONTRACTING OFFICER THAT THERE IS NO CLEAR EVIDENCE EMANATING FROM THE BID PRICES THEMSELVES WHICH WOULD INDICATE THAT SMEAD HAD MADE AN ERROR IN ITS BID. WHILE THE COMPANY'S PRICES FOR THE THREE ITEMS APPEAR TO BE MUCH LOWER THAN THE SECOND LOW BIDDER, IT IS REPORTED THAT THIS WAS THE FIRST INVITATION FOR THESE ITEMS SINCE 1961 WHICH HAD NOT BEEN SET ASIDE EXCLUSIVELY FOR SMALL BUSINESS CONCERNS. THE CONTRACTING OFFICER'S JUDGMENT THAT SMEAD, A LARGE BUSINESS CONCERN, MIGHT BE CAPABLE OF UNDERBIDDING SMALL BUSINESS CONCERNS DOES NOT APPEAR UNREASONABLE, ESPECIALLY IN VIEW OF THE LOW BIDS SUBMITTED BY REMINGTON RAND FOR OTHER ITEMS IN THE INVITATION.

IN VIEW OF THE FOREGOING, WE DO NOT BELIEVE THAT THE ALLEGED ERROR IN QUOTING PRICES WAS SO APPARENT AS TO GIVE THE CONTRACTING OFFICER REASON TO SUSPECT THE POSSIBILITY OF AN ERROR IN THE SMEAD BID. THEREFORE, A VALID AND BINDING CONTRACT WAS CONSUMMATED UPON ACCEPTANCE OF THE COMPANY'S BID, AND NO RELIEF MAY BE GRANTED THEREFROM.