B-159120, MAY 20, 1966

B-159120: May 20, 1966

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THE GROBAN COMPANY ALLEGES ERROR IN TELEPHONE TRANSMISSION OF THE BID PRICE TO ITS BIDDING AGENT IN THAT THE UNIT PRICE IT BID WAS INTENDED TO BE ITS TOTAL BID WITH A UNIT PRICE OF $4.48. HE ASSUMED THE COMPANY WAS AWARE OF ITS BID IN VIEW OF ITS EFFICIENT BIDDING IN THE PAST AND ITS HISTORY OF STRONG BIDDING ON ITEMS IN WHICH IT IS INTERESTED. GROBAN'S BID WAS MORE THAN SIX TIMES HIGHER THAN THE SECOND HIGH BID AND MORE THAN FIFTEEN TIMES HIGHER THAN THE THIRD LOW BID. THE BID PRICE WAS ALMOST THIRTY TIMES THE APPRISAL PRICE AND EVEN EXCEEDED THE ORIGINAL ACQUISITION COST. THE CONTRACTING OFFICER IS OF THE OPINION THAT HE WAS ON CONSTRUCTIVE NOTICE OF AN ERROR AND SHOULD HAVE REQUESTED VERIFICATION.

B-159120, MAY 20, 1966

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

WE REFER TO THE LETTER OF MAY 5, 1966, FROM THE ASSISTANT COUNSEL, RELATIVE TO A MISTAKE IN BID ALLEGED AFTER AWARD BY GROBAN SUPPLY COMPANY UNDER SALES INVITATION NO. 37-6110, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, P.O. BOX 6297, FORT WORTH, TEXAS, ON MARCH 8, 1966.

GROBAN SUPPLY COMPANY SUBMITTED BIDS ON SEVERAL ITEMS, INCLUDING $89.55 ON EACH OF 20 HAND PUMPS UNDER ITEM 18. CONTRACT NO. 37-6110 212, AWARDED TO GROBAN ON MARCH 25, 1966, INCLUDED ITEM 18 AT THE BID PRICE. THE GROBAN COMPANY ALLEGES ERROR IN TELEPHONE TRANSMISSION OF THE BID PRICE TO ITS BIDDING AGENT IN THAT THE UNIT PRICE IT BID WAS INTENDED TO BE ITS TOTAL BID WITH A UNIT PRICE OF $4.48, AND REQUESTS THAT AWARD OF ITEM 18 BE RESCINDED.

THE SALES CONTRACTING OFFICER STATES THAT IN EVALUATING GROBAN'S RELATIVELY HIGH BID, HE ASSUMED THE COMPANY WAS AWARE OF ITS BID IN VIEW OF ITS EFFICIENT BIDDING IN THE PAST AND ITS HISTORY OF STRONG BIDDING ON ITEMS IN WHICH IT IS INTERESTED. ON THE OTHER HAND, GROBAN'S BID WAS MORE THAN SIX TIMES HIGHER THAN THE SECOND HIGH BID AND MORE THAN FIFTEEN TIMES HIGHER THAN THE THIRD LOW BID. FURTHER, THE BID PRICE WAS ALMOST THIRTY TIMES THE APPRISAL PRICE AND EVEN EXCEEDED THE ORIGINAL ACQUISITION COST. IN VIEW OF THESE FACTS, AND NOTWITHSTANDING THE WIDE VARIANCES IN BIDDING IN GENERAL ON THE SALE, THE CONTRACTING OFFICER IS OF THE OPINION THAT HE WAS ON CONSTRUCTIVE NOTICE OF AN ERROR AND SHOULD HAVE REQUESTED VERIFICATION, AND HE RECOMMENDS CANCELLATION OF THE AWARD ON ITEM 18. PAYMENT HAS YET BEEN MADE.

WE AGREE THAT THE GREAT DISPARITY BETWEEN THE COMPANY'S HIGH BID AND THE MARKET APPRAISAL VALUE, THE FACT THAT THE BID WAS GREATER THAN THE ORIGINAL COST, AND THE UNUSUAL DIFFERENCE BETWEEN GROBAN'S BID AND THE OTHER BIDS SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR. CONSEQUENTLY, HE SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO ACCEPTING IT. THERE IS LITTLE DOUBT THAT AN ERROR WAS MADE, AND, THEREFORE THE AWARD OF ITEM 18 TO GROBAN SUPPLY COMPANY MAY BE CANCELLED WITHOUT LIABILITY TO THE COMPANY.