B-155989, FEB. 24, 1965

B-155989: Feb 24, 1965

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 22. GS- 09S-13154 WHICH WAS AWARDED TO KEYSTONE-SENECA WIRE CLOTH COMPANY. THE INVITATION FOR BIDS SPECIFIED THAT THE ROLLS OF SCREENING WERE TO BE IN ACCORDANCE WITH FEDERAL SPECIFICATION RR-S-141A. THAT THE SCREENING WAS TO BE OF 24 INCH WIDTH AND 100 LINEAR FEET TO THE ROLL DELIVERED F.O.B. THE INVITATION WAS ISSUED MAY 14. FOUR OFFERS WERE RECEIVED. BIDS WERE OPENED MAY 19. AWARD WAS MADE THE SAME DAY TO KEYSTONE-SENECA AS THE LOW. THE NEXT LOW BID RECEIVED WAS $18.06 PER ROLL AND STIPULATED 30-DAY DELIVERY FOR THE FIRST ONE THIRD OF THE QUANTITY OFFERED AND THE REMAINING TWO-THIRDS. THE THIRD LOW BID WAS $22.87 PER ROLL.

B-155989, FEB. 24, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER DATED JANUARY 22, 1965, WITH ENCLOSURES, SUBMITTING FOR CONSIDERATION A REQUEST FOR REFORMATION OF CONTRACT NO. GS- 09S-13154 WHICH WAS AWARDED TO KEYSTONE-SENECA WIRE CLOTH COMPANY, FACTORY STREET, HANOVER, PENNSYLVANIA, ON MAY 19, 1964.

THE CONTRACT COVERED AN AWARD FOR 600 ROLLS OF COMMERCIAL BRONZE (BRASS) SCREENING UNDER TELEGRAPHIC INVITATION FOR BIDS CIRCULATED TO A LIST OF FOUR BIDDERS. THE INVITATION FOR BIDS SPECIFIED THAT THE ROLLS OF SCREENING WERE TO BE IN ACCORDANCE WITH FEDERAL SPECIFICATION RR-S-141A, AND INTERIM AMENDMENT 4, THAT THE SCREENING WAS TO BE OF 24 INCH WIDTH AND 100 LINEAR FEET TO THE ROLL DELIVERED F.O.B. LONG BEACH NAVAL SHIPYARD AND DESIRED DELIVERY WITHIN 20 AND NOT MORE THAN 30 DAYS AFTER RECEIPT OF A PURCHASE ORDER. THE INVITATION WAS ISSUED MAY 14, 1964, FOUR OFFERS WERE RECEIVED, BIDS WERE OPENED MAY 19, 1964, AND AWARD WAS MADE THE SAME DAY TO KEYSTONE-SENECA AS THE LOW, RESPONSIVE BIDDER AT $10.50 PER ROLL, 30- DAY DELIVERY. THE NEXT LOW BID RECEIVED WAS $18.06 PER ROLL AND STIPULATED 30-DAY DELIVERY FOR THE FIRST ONE THIRD OF THE QUANTITY OFFERED AND THE REMAINING TWO-THIRDS, 2 WEEKS LATER, OR 44 DAYS. THE THIRD LOW BID WAS $22.87 PER ROLL, DELIVERY IN 35 DAYS, OR $26.60, DELIVERY IN 29 DAYS. THE FOURTH LOW BID WAS $23.22, DELIVERY IN 60 DAYS.

AFTER AWARD, BY LETTER DATED JUNE 12, 1964, TO THE CONTRACTING OFFICER, THE CONTRACTOR ALLEGED THAT AN ERROR WAS MADE IN THE OFFER AND THAT THE INTENDED BID WAS $10.50 PER HUNDRED SQUARE FEET, OR $21 PER ROLL. KEYSTONE-SENECA NOW REQUESTS AN UPWARD ADJUSTMENT IN THE CONTRACT PRICE FROM $10.50 PER ROLL TO $21 PER ROLL. INQUIRY BY THE CONTRACTING OFFICER AS TO WHEN KEYSTONE-SENECA DISCOVERED THIS ERROR BROUGHT THE CONTRACTOR'S REPLY THAT THE ERROR HAD BEEN "JUST DISCOVERED" ON THE DAY OF THE LETTER, JUNE 12, 1964. BETWEEN THE DATE OF AWARD ON MAY 19, 1964, AND DATE OF DISCOVERY OF THE ERROR ON JUNE 12, A PURCHASE ORDER DATED MAY 22, 1964, WAS ISSUED AND RECEIVED. IN ADDITION, ON JUNE 1, 1964, AN AMENDMENT TO THE CONTRACT, REDUCING BY 150 ROLLS THE CONTRACT REQUIREMENT, WAS ACCEPTED BY THE CONTRACTOR. IT IS ADMINISTRATIVELY REPORTED THAT AFTER PROPERLY CONSIDERING THESE FACTORS IT WAS CONCLUDED THAT THERE WAS NO REASON TO DOUBT THE CONTRACTOR'S CONTENTION BY LETTER AND AFFIDAVIT, AS TO THE INITIAL DISCOVERY OF THE ERROR ON JUNE 12, 1964. IN ADDITION THE CONTRACTING OFFICER NOW STATES THAT KEYSTONE-SENECA'S OFFER OF $10.50 PER ROLL UNDER THE INVITATION FOR BIDS WAS SO LOW AS TO CHARGE HIM WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY THAT AN ERROR HAD BEEN MADE, BUT THAT HE FAILED TO CONSIDER THIS FACTOR AND DID NOT REQUEST VERIFICATION OF THE OFFERED PRICE. THE CONTRACTING OFFICER HAS DETERMINED THAT IT IS STANDARD COMMERCIAL PRACTICE FOR A ROLL OF SCREENING WIRE TO CONTAIN 100 LINEAR FEET WITH A WIDTH OF 1, 2, 3 OR 4 FEET AND THE CONTRACTOR'S ERROR RESULTED IN AN OFFER OF EXACTLY HALF OF WHAT HE INTENDED TO BID BECAUSE THE INVITATION WAS FOR ROLLS OF SCREENING WIRE 2 FEET IN WIDTH AND CONTAINING 200 SQUARE FEET OF MATERIAL, WHEREAS THE CONTRACTOR HAD BID ON ROLLS HAVING A WIDTH OF 1 FOOT AND CONTAINING 100 SQUARE FEET OF MATERIAL. IT IS UNDERSTOOD THAT PERFORMANCE UNDER THE CONTRACT AS AMENDED HAS BEEN MADE.

AS A GENERAL RULE WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD THE CONTRACT IS NOT SUBJECT TO REFORMATION SINCE A BINDING AND ENFORCEABLE CONTRACT ARISES UPON ACCEPTANCE. SALIGMAN V. UNITED STATES, 56 F.SUPP. 505, AND CASES CITED THEREIN. THIS GENERAL RULE, HOWEVER, IS NOT FOR APPLICATION WHERE THE CIRCUMSTANCES ARE SUCH THAT THE CONTRACTING OFFICER HAS ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR PRIOR TO AWARD. IN SUCH CASES, ACCEPTANCE BY THE CONTRACTING OFFICER DOES NOT RESULT IN A BINDING CONTRACT AND EITHER OUR OFFICE OR THE COURTS WILL ALLOW APPROPRIATE RELIEF. 37 COMP. GEN. 685; 17 COMP. GEN. 575. COURSE, ANY SUCH ADJUSTMENT MAY NOT RESULT IN THE TOTAL CORRECTED PRICES EXCEEDING THE PRICE QUOTED IN THE NEXT LOW ACCEPTABLE BID. 37 COMP. GEN. 398; 37 COMP. GEN. 685. FURTHER, IN REGARD TO CORRECTION OF AN ALLEGED ERROR IN BID WE HAVE HELD THAT TO PERMIT CORRECTION EITHER PRIOR TO OR AFTER AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED AND THE INTENDED BID PRICE. 35 COMP. GEN. 279; 31 ID. 183; 23 ID. 596 AND 17 ID. 598. THE SAME BASIC REQUIREMENTS FOR THE CORRECTION OF A BID ARE ALSO FOUND IN SECTION 1 2.406-3 (A) (2) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR).

SINCE, ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED, AND THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF SUCH ERROR, THE CONTRACT MAY BE REFORMED TO REFLECT AN INCREASE IN THE BID PRICE. SINCE THE DELIVERY TIME WAS SPECIFIED IN THE INVITATION AS "DESIRED," AN ADDITIONAL PAYMENT TO THE CONTRACTOR OF $7.56 PER ROLL, BASED UPON THE DIFFERENCE BETWEEN THE ERRONEOUS LOW BID AND THE NEXT LOWEST BID, IS AUTHORIZED AS RECOMMENDED BY YOU.

HOWEVER, WE THINK IT APPROPRIATE TO POINT OUT THAT WE HAVE TAKEN THE POSITION THAT WHERE AN INVITATION SETS OUT A "DESIRED" DELIVERY SCHEDULE, THERE SHOULD ALSO BE INCLUDED A MAXIMUM ACCEPTABLE DATE TOGETHER WITH A PROVISION TO THE EFFECT THAT BIDS OFFERING DELIVERY LATER THAN THAT DATE WILL BE REJECTED. B-129678, NOVEMBER 8, 1956. SEE ALSO, B-137954, FEBRUARY 25, 1959, TO YOUR AGENCY CONTAINING OUR COMMENTS ON A PROPOSED REGULATION WHICH WOULD PRESCRIBE POLICY AND PROCEDURES WITH RESPECT TO TIME OF DELIVERY IN THE PROCUREMENT OF SUPPLIES. ALSO, SEE FPR 1-1.316- 5.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.