B-157713, OCT. 12, 1965

B-157713: Oct 12, 1965

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ITEM 84 WAS DESCRIBED AS A PRATT AND WHITNEY GRINDING MACHINE MANUFACTURED IN 1942. IT IS REPORTED THAT AN UPSET PRICE (MINIMUM PRICE) OF $250 WAS ESTABLISHED FOR THIS ITEM. ALTHOUGH CENTURY WAS NOT HIGH BIDDER ON THE MILLING MACHINE. IT WAS THE HIGH BIDDER ON THE GRINDING MACHINE. NOTICE OF AWARD WAS ISSUED JULY 7. 236.22 WAS CLEARLY OUT OF LINE. HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR AND SHOULD HAVE REQUESTED VERIFICATION OF BID PRIOR TO AWARD. SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR. THE CONTRACTING OFFICER PROPERLY SHOULD HAVE REQUESTED VERIFICATION OF THE BID BEFORE ACCEPTANCE. SINCE THERE IS LITTLE DOUBT. THAT AN ERROR WAS.

B-157713, OCT. 12, 1965

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

WE REFER TO THE LETTER OF SEPTEMBER 20, 1965, FROM THE GENERAL COUNSEL, RELATIVE TO A MISTAKE IN BID ALLEGED AFTER AWARD BY CENTURY MACHINERY CO., 1937 SOUTH SANTA FE AVENUE, LOS ANGELES, CALIFORNIA, UNDER SALES INVITATION NO. 9UPS (LA) 65-196, ISSUED BY THE GENERAL SERVICES ADMINISTRATION, SALES BRANCH, PPP, UDS, BELL, CALIFORNIA, ON JUNE 14, 1965.

CENTURY MACHINERY CO. SUBMITTED BIDS ON ITEM 83, A MILLING MACHINE, AND ITEM 84, A GRINDING MACHINE, IN THE AMOUNTS OF $2,333.33 AND $2,236.22, RESPECTIVELY. ITEM 84 WAS DESCRIBED AS A PRATT AND WHITNEY GRINDING MACHINE MANUFACTURED IN 1942, AND IT IS REPORTED THAT AN UPSET PRICE (MINIMUM PRICE) OF $250 WAS ESTABLISHED FOR THIS ITEM. ALTHOUGH CENTURY WAS NOT HIGH BIDDER ON THE MILLING MACHINE, IT WAS THE HIGH BIDDER ON THE GRINDING MACHINE, THE NEXT HIGHEST BID BEING $550. NOTICE OF AWARD WAS ISSUED JULY 7, 1965, TO CENTURY FOR THE PURCHASE OF THE GRINDING MACHINE AT ITS BID PRICE.

SHORTLY AFTER AWARD, CENTURY ADVISED THE SALES OFFICER THAT IT HAD MADE A MISTAKE IN SUBMITTING ITS BID. RATHER THAN INTENDING TO BID ON ITEMS 83 AND 84, CENTURY ADVISED THAT IT HAD DESIRED TO BID ON ITEMS 82 AND 83, BOTH MILLING MACHINES, BUT HAD FILLED IN THE WRONG BLANKS ON THE BID FORM. IN SUPPORT THEREOF, IT SUBMITTED COPIES OF ITS DAY BOOK SHOWING NOTATIONS THEREIN WITH RESPECT TO ITS INTENTION TO BID UPON ITEMS 82 AND 83. SINCE CENTURY DID NOT INTEND TO BID ON ITEM 84 AND HAS NO DESIRE TO PURCHASE THAT MACHINE, IT HAS REQUESTED THAT THE CONTRACT BE RESCINDED.

THE SALES (CONTRACTING) OFFICER STATES THAT THE OTHER 11 BIDS ON ITEM 84 RANGED FROM $18 TO $550, AND THAT SINCE THE BID OF $2,236.22 WAS CLEARLY OUT OF LINE, HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR AND SHOULD HAVE REQUESTED VERIFICATION OF BID PRIOR TO AWARD. HE RECOMMENDS RESCISSION OF THE CONTRACT AS REQUESTED BY CENTURY.

WE AGREE THAT THE GREAT DISPARITY BETWEEN THE COMPANY'S HIGH BID AND THE ESTABLISHED UPSET PRICE, AS WELL AS THE SUBSTANTIAL DIFFERENCE BETWEEN THE HIGH BID OF CENTURY MACHINERY CO. AND THE NEXT HIGH BID, SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR. THAT BEING THE CASE, THE CONTRACTING OFFICER PROPERLY SHOULD HAVE REQUESTED VERIFICATION OF THE BID BEFORE ACCEPTANCE. ACCORDINGLY, AND SINCE THERE IS LITTLE DOUBT, IF ANY, THAT AN ERROR WAS, IN FACT, MADE IN THE BID, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.