B-159290, JUL. 1, 1966

B-159290: Jul 1, 1966

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VETERANS ADMINISTRATION: WE ARE IN RECEIPT OF A LETTER DATED MAY 26. THE ABOVE-REFERENCED INVITATION SOLICITED BIDS ON FURNISHING VARIOUS AMERICAN AND FOREIGN PERIODICALS WHICH WERE SEPARATED INTO GROUPS "A" AND "B" FOR GENERAL AND TECHNICAL JOURNALS. THE CONTRACTOR WAS PERMITTED TO SUBMIT HIS BID BY EITHER METHOD. THE AWARD WAS TO BE MADE. 572.15 NO BID THESE FIGURES ARE THE NET DOLLAR AMOUNTS. THE CONTRACTING OFFICER ALSO NOTIFIED AFSA THAT A PERFORMANCE BOND WAS REQUIRED IN ACCORDANCE WITH THE CONTRACT. THE ERROR WAS NOTICED BECAUSE ITEM NO. 33840. AFSA WAS THEN NOTIFIED OF ITS ERROR AND TOLD THAT REGARDLESS OF THE PRICES QUOTED. THEY WERE OBLIGATED TO SUPPLY BOTH PUBLICATIONS. A CONTRACT WILL NOT BE REFORMED WHEN A UNILATERAL MISTAKE IS ALLEGED AFTER THE CONTRACT HAS BEEN AWARDED BECAUSE ONCE A BID HAS BEEN ACCEPTED.

B-159290, JUL. 1, 1966

TO THE ADMINISTRATOR OF VETERANS AFFAIRS, VETERANS ADMINISTRATION:

WE ARE IN RECEIPT OF A LETTER DATED MAY 26, 1966, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, OFFICE OF MANAGEMENT AND EVALUATION, VETERANS ADMINISTRATION, REGARDING AN ALLEGED MISTAKE IN BID AFTER AWARD BY THE ARMED FORCES SUBSCRIPTION AGENCY (HEREAFTER REFERRED TO AS AFSA), WASHINGTON, D.C., IN RESPONSE TO INVITATION FOR BIDS NO. M10 1-66, ISSUED BY THE VETERANS ADMINISTRATION SUPPLY DEPOT, SOMERVILLE, NEW JERSEY, ON SEPTEMBER 13, 1965.

THE ABOVE-REFERENCED INVITATION SOLICITED BIDS ON FURNISHING VARIOUS AMERICAN AND FOREIGN PERIODICALS WHICH WERE SEPARATED INTO GROUPS "A" AND "B" FOR GENERAL AND TECHNICAL JOURNALS, RESPECTIVELY. THE COVER PAGE ON THE LIST OF PERIODICALS FOR GROUP "B" SHOWS THE TWO METHODS FOR EVALUATION OF THE BIDS. THE CONTRACTOR WAS PERMITTED TO SUBMIT HIS BID BY EITHER METHOD. UNDER METHOD ONE THE CONTRACTOR AGREED TO SUPPLY ITEMS 30010 THROUGH 42460, WITH CERTAIN EXCEPTIONS, FOR A STATED TOTAL AMOUNT; AND UNDER METHOD TWO THE CONTRACTOR AGREED TO SUPPLY ITEMS 10005 THROUGH 42460, WITH CERTAIN EXCEPTIONS, FOR A STATED TOTAL AMOUNT. THUS, THE AWARD WAS TO BE MADE, REGARDLESS OF THE METHOD CHOSEN, ON THE BASIS OF THE TOTAL STATED AMOUNT, OR, THE AGGREGATE BID. THREE FIRMS RESPONDED TO THE INVITATION AS FOLLOWS:

TABLE

ARMED EBSCO NATIONAL PUBLICATIONS

GROUP FORCES INDUSTRIES COMPANY

A $165,095.89 $171,838.42 $171,000

B 369,223.40 380,495.39 370,000

A AND B 532,570.68 549,572.15 NO BID

THESE FIGURES ARE THE NET DOLLAR AMOUNTS.

INASMUCH AS AFSA SUBMITTED THE LOWEST BID, THE CONTRACTING OFFICER AWARDED IT CONTRACT NO. V-7023-L-136, ON OCTOBER 29, 1965. ON THE SAME DAY, THE CONTRACTING OFFICER ALSO NOTIFIED AFSA THAT A PERFORMANCE BOND WAS REQUIRED IN ACCORDANCE WITH THE CONTRACT. AFTER RECEIPT OF THE BOND AND WHILE PREPARING THE PURCHASE ORDER, THE CONTRACTING OFFICER DISCOVERED AN ERROR IN THE UNIT PRICE OF ITEM NO. 33850 IN GROUP B. THE ERROR WAS NOTICED BECAUSE ITEM NO. 33840, DRUG TOPICS, HAD A UNIT PRICE OF $10.00, WHEREAS ITEM NO. 33850, THE COMBINED PUBLICATIONS DRUG TOPICS WITH RED BOOK PRICE LIST, HAD A UNIT PRICE OF ONLY $9.00. AFSA WAS THEN NOTIFIED OF ITS ERROR AND TOLD THAT REGARDLESS OF THE PRICES QUOTED, THEY WERE OBLIGATED TO SUPPLY BOTH PUBLICATIONS. PAYMENT IN THE FULL AMOUNT OF THE ORIGINAL CONTRACT PRICE HAS ALREADY BEEN MADE AND PERFORMANCE HAS BEEN SATISFACTORY.

AFSA SPECIFICALLY REQUESTS AN ADDITIONAL PAYMENT IN THE AMOUNT OF $1,421.88, WHICH REPRESENTS THE DIFFERENCE BETWEEN THE BID PRICE AND THE CORRECT PRICE OF $19.00 PER UNIT FOR THE DRUG TOPICS WITH RED BOOK PRICE LIST, INCLUDING THE STATED DISCOUNT. THE CONTRACT PRICE, AS SO CORRECTED, WOULD NOT EXCEED THAT OF THE NEXT LOWEST ACCEPTABLE BID.

GENERALLY, A CONTRACT WILL NOT BE REFORMED WHEN A UNILATERAL MISTAKE IS ALLEGED AFTER THE CONTRACT HAS BEEN AWARDED BECAUSE ONCE A BID HAS BEEN ACCEPTED, A BINDING CONTRACT IS FORMED AND THE CONTRACTOR MUST BEAR THE CONSEQUENCES OF HIS OWN MISTAKE. 36 COMP. GEN. 441, 17 COMP. GEN. 575. HOWEVER, WHERE THE CIRCUMSTANCES ARE SUCH THAT, PRIOR TO ACCEPTANCE OF THE BID, THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR THEREIN, ACCEPTANCE OF THE BID DOES NOT RESULT IN A BINDING CONTRACT. IN THE INSTANT CASE WE FEEL THE CONTRACTING OFFICER DID NOT HAVE CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN AFSA'S BID SINCE, AS NOTED ABOVE, THE AWARD WAS MADE ON THE BASIS OF THE AGGREGATE BID RATHER THAN ON AN ITEM-BY-ITEM BASIS. THIS OFFICE HAS HELD WHERE AN AWARD IS TO BE MADE ON THE BASIS OF AN AGGREGATE BID, THE CONTRACTING OFFICER HAS NO DUTY TO EXAMINE THE INDIVIDUAL BIDS. SEE B-138212, JANUARY 21, 1959. THEREFORE, WE CANNOT SAY A REASONABLY PRUDENT CONTRACTING OFFICER IN THIS CASE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN AFSA'S BID. FURTHERMORE, EVEN THOUGH AFSA ACTED IN COMPLETE GOOD FAITH, WE DO NOT FEEL IT IS UNCONSCIONABLE TO REQUIRE IT TO PERFORM UNDER THE TERMS OF ITS BID SINCE THE GOVERNMENT CONTRIBUTED IN NO WAY TO THE COMMISSION OR FURTHERANCE OF THE MISTAKE.

IN VIEW OF THE ABOVE THE PROTEST OF AFSA IS DENIED AND THE REQUEST FOR AN ADDITIONAL PAYMENT IN THE AMOUNT OF $1,421.88 IS DENIED. RETURNED IS YOUR FILE, AS REQUESTED.