B-160201, NOV. 10, 1966

B-160201: Nov 10, 1966

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VETERANS AFFAIRS VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 30. WERE OPENED ON DECEMBER 17. SIMPSON- BOSWORTH WAS THE ONLY BIDDER ON ITEMS 2. THE PURCHASE ORDER WAS ISSUED TO SIMPSON-BOSWORTH FOR THE THREE ITEMS IN THE AMOUNT OF ITS AGGREGATE BID OF $985. DELIVERY WAS TO BE MADE WITHIN 90 DAYS AFTER RECEIPT OF THE ORDER. IT IS REPORTED THAT SIMPSON-BOSWORTH WAS CONTACTED BY TELEPHONE. 3 AND 4 WOULD HAVE BEEN AWARDED AS ONE ITEM AND ON THE SMALL QUANTITIES OF TABLES WE HAD OMITTED THE RAW MATERIALS IN OUR CALCULATIONS.'. THE VENDOR WAS THEN ADVISED TO SUBMIT EVIDENCE OF THE ALLEGED ERROR. IT APPEARS FROM THE VENDOR'S CORRESPONDENCE AND COST ANALYSIS THAT SOME ERROR MAY HAVE OCCURRED IN OBTAINING A PRICE FOR THE CORROSION-RESISTING STEEL FROM ITS SUPPLIER.

B-160201, NOV. 10, 1966

TO ADMINISTRATOR, VETERANS AFFAIRS VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 30, 1966, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING OUR DECISION ON THE ACTION TO BE TAKEN WITH RESPECT TO A MISTAKE IN BID ALLEGED BY SIMPSON-BOSWORTH COMPANY, INC., AFTER ISSUANCE OF PURCHASE ORDER NO. 6978 ON DECEMBER 21, 1965.

BIDS RECEIVED IN RESPONSE TO INVITATION FOR BIDS NO. 66-116, WHICH CALLED FOR BIDS ON FOUR ITEMS, WERE OPENED ON DECEMBER 17, 1965, AND SIMPSON- BOSWORTH WAS THE ONLY BIDDER ON ITEMS 2, 3 AND 4. THE PURCHASE ORDER WAS ISSUED TO SIMPSON-BOSWORTH FOR THE THREE ITEMS IN THE AMOUNT OF ITS AGGREGATE BID OF $985. DELIVERY WAS TO BE MADE WITHIN 90 DAYS AFTER RECEIPT OF THE ORDER, OR BY MARCH 21, 1966. HOWEVER, NONE OF THE FOUR TABLES COMPRISING THE ORDER HAS BEEN DELIVERED.

IT IS REPORTED THAT SIMPSON-BOSWORTH WAS CONTACTED BY TELEPHONE, LETTER AND TELEGRAM IN AN EFFORT TO GET DELIVERY. FINALLY, BY A LETTER DATED JULY 15, 1966, THE CONTRACTING OFFICER SERVED A 30-DAY NOTICE OF DEFAULT ON THE VENDOR IN ACCORDANCE WITH THE DISPUTES CLAUSE OF THE PURCHASE ORDER. BY LETTER DATED JULY 27, 1966, THE VENDOR REPLIED TO THE DEFAULT NOTICE AND FOR THE FIRST TIME ALLEGED A MISTAKE IN ITS BID IN THAT "WE ASSUMED THAT ITEMS 1, 2, 3 AND 4 WOULD HAVE BEEN AWARDED AS ONE ITEM AND ON THE SMALL QUANTITIES OF TABLES WE HAD OMITTED THE RAW MATERIALS IN OUR CALCULATIONS.' THE VENDOR REQUESTED THAT THE PURCHASE ORDER BE AMENDED TO REFLECT A TOTAL FOR ITEMS 2, 3 AND 4 OF $2,320, OR $1,335 MORE THAN THE PRICE OF $985 STATED THEREIN. THE VENDOR WAS THEN ADVISED TO SUBMIT EVIDENCE OF THE ALLEGED ERROR. IN RESPONSE THERETO, THE VENDOR SUBMITTED TWO "COST ANALYSIS" FOR EACH ITEM, ONE SHOWING THE COMPUTATIONS FOR ITS BID PRICE AND THE OTHER SHOWING THE COMPUTATIONS UPON WHICH IT REQUESTS ADJUSTMENT. IN THE LETTER FORWARDING THIS INFORMATION THE VENDOR STATES:

"OF COURSE, YOU CAN SEE FROM THESE THAT WE HAD TIED IT INTO THE OTHER ITEMS, AND WE DID NOT FIGURE THAT A SEPARATE AWARD WOULD BE MADE ON THE KITCHEN TABLES ALONE.'

ALTHOUGH NOT SPECIFICALLY ALLEGED, IT APPEARS FROM THE VENDOR'S CORRESPONDENCE AND COST ANALYSIS THAT SOME ERROR MAY HAVE OCCURRED IN OBTAINING A PRICE FOR THE CORROSION-RESISTING STEEL FROM ITS SUPPLIER. HOWEVER, IN VIEW OF WHAT IS SAID BELOW IT IS NOT NECESSARY TO RESOLVE THIS MATTER.

ITEM 1 OF THE SUBJECT INVITATION, WHICH THE BIDDER "ASSUMED WOULD BE INCLUDED IN ANY PURCHASE ORDER ISSUED, CALLS FOR BIDS ON SUPPLYING 67 TABLES, WHEREAS THE TOTAL NUMBER OF TABLES TO BE SUPPLIED UNDER ITEMS 2, 3 AND 4, IS FOUR. SIMPSON-BOSWORTH'S BID ON ITEM 1 WAS $5,085.30. NO AWARD WAS MADE FOR ITEM 1 UNDER THIS INVITATION. THE INVITATION INCLUDED THE FOLLOWING PROVISION WITH RESPECT TO THE METHOD OF AWARD:

"IT IS CONTEMPLATED THAT ITEMS NO. 2 THROUGH 4 WILL BE AWARDED IN THE AGGREGATE, BUT THE RIGHT IS RESERVED TO CANCEL ANY ITEM OR ITEMS AFTER THE BIDS ARE OPENED, BEFORE MAKING AWARD. THE ENTIRE GROUP WILL BE AWARDED TO THE BIDDER QUOTING THE LOWEST PRICE TO THE COMPLETE GROUP. IN THE EVENT NO BID IS RECEIVED FOR ALL ITEMS IN THE GROUP, AWARD WILL BE MADE TO THE LOWEST BIDDER QUOTING THE LOWEST AGGREGATE PRICE FOR THE GREATEST NUMBER OF ITEMS IN THE GROUP.

"TO PROVIDE A BASIS FOR AWARD WHEN THE BIDS ARE RECEIVED ON THE ENTIRE GROUP, IT WILL BE NECESSARY FOR EACH BIDDER TO QUOTE A UNIT PRICE ON EACH ITEM ON WHICH HE IS BIDDING. HOWEVER, BIDDERS QUOTING ON ALL ITEMS IN A GROUP MAY QUOTE A TOTAL AGGREGATE PRICE WHICH IS EQUAL TO OR LESS THAN THE TOTAL OF THE UNIT PRICE QUOTED. (VAPR 8 7.150-17).'

IN ADDITION TO THE FOREGOING SPECIAL PROVISION OF THE INVITATION, STANDARD FORM 33-A, WHICH IS INCORPORATED IN THE SUBJECT INVITATION BY REFERENCE, PROVIDES IN PARAGRAPH 8 (C) AS FOLLOWS:

"8 (C). THE GOVERNMENT MAY ACCEPT ANY ITEM OR GROUP OF ITEMS OF ANY BID, UNLESS THE BIDDER QUALIFIES HIS BID BY SPECIFIC INVITATIONS. UNLESS OTHERWISE PROVIDED IN THE SCHEDULE BIDS MAY BE SUBMITTED FOR ANY QUANTITIES LESS THAN THOSE SPECIFIED; AND THE GOVERNMENT RESERVES THE RIGHT TO MAKE ANY AWARD ON ANY ITEM FOR A QUANTITY LESS THAN THE QUANTITY BID UPON AT THE UNIT PRICES OFFERED UNLESS THE BIDDER SPECIFIES OTHERWISE IN HIS BID.'

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

SINCE THE RESPONSIBILITY FOR THE PREPARATION OF A BID RESTS UPON THE BIDDER, THE CONSEQUENCES OF A MISTAKE IN A BID WHICH HAS BEEN ACCEPTED BY THE GOVERNMENT MUST BE BORNE BY THE BIDDER UNLESS THE MISTAKE WAS MUTUAL OR THE MISTAKE WAS KNOWN TO THE CONTRACTING OFFICER. FRAIZER- DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 123; 31 COMP. GEN. 323; 23 ID. 596. IN THE INSTANT CASE, SINCE ANY MISTAKE THAT WAS MADE WAS UNILATERAL, AND SINCE THE CONTRACTING OFFICER MAY NOT BE CHARGED WITH NOTICE OF THE PROBABILITY OF ERROR, ACCEPTANCE OF THE SIMPSON-BOSWORTH BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL BASIS FOR INCREASING THE CONTRACT PRICE FOR THE ITEMS IN QUESTION OR FOR CANCELING THE CONTRACT. THE FILE ENCLOSED WITH THE REPORT OF SEPTEMBER 30, 1966, IS RETURNED.