B-161464, JUN. 1, 1967

B-161464: Jun 1, 1967

Additional Materials:

Contact:

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

 

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

VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED MAY 5. FOR RELIEF UNDER PURCHASE ORDER NO. 654 WHICH WAS AWARDED TO THE COMPANY ON JULY 28. THE INVITATION WAS ISSUED UNDER DATE OF JULY 14. FILTERS: EACH UNIT IS TO BE FURNISHED WITH FILTRINE MANUFACTURING CO.'TASTE MASTER" NO. 4 FILTERS OR EQUAL. TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND WERE OPENED ON JULY 28. THE GOVERNMENT'S ESTIMATE WAS $2. AWARD WAS MADE TO GENERAL ELECTRIC AT $1. 818 AND THE COOLERS WERE DELIVERED AND ACCEPTED BY THE HOSPITAL ON OCTOBER 4. IT IS POINTED OUT THAT THE CONTRACT PRICE. THE INVITATION ISSUED IN THE PRESENT INSTANCE WAS CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENTS OF THE GOVERNMENT.

B-161464, JUN. 1, 1967

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED MAY 5, 1967, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, SUBMITTING FOR OUR DECISION A REQUEST BY THE GENERAL ELECTRIC SUPPLY COMPANY, FOR RELIEF UNDER PURCHASE ORDER NO. 654 WHICH WAS AWARDED TO THE COMPANY ON JULY 28, 1966, FOLLOWING THE COMPANY'S QUOTATION ON INVITATION FOR BIDS NO. 67-17, ISSUED BY THE VETERANS ADMINISTRATION HOSPITAL, BROOKLYN, NEW YORK.

THE INVITATION WAS ISSUED UNDER DATE OF JULY 14, 1966, FOR THE PROCUREMENT OF NINE WATER COOLERS, PRESSURE TYPE WITH HEAVY DUTY BUBBLER, PURO FILTER CORPORATION OF AMERICA MODEL T-17, OR EQUAL, TO BE FURNISHED COMPLETE IN ACCORDANCE WITH ALL SPECIFICATIONS, TERMS AND CONDITIONS SET FORTH THEREIN. THE SPECIFICATIONS INCLUDED A REQUIREMENT FOR FILTERS AS FOLLOWS.

"2. FILTERS: EACH UNIT IS TO BE FURNISHED WITH FILTRINE MANUFACTURING CO.'TASTE MASTER" NO. 4 FILTERS OR EQUAL, WITH ONE DOZEN SPARE FILTER ELEMENTS FOR EACH FILTER.'

TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION AND WERE OPENED ON JULY 28, 1966. GENERAL ELECTRIC SUPPLY COMPANY SUBMITTED THE LOWEST BID IN THE TOTAL AMOUNT OF $1,818 FOR THE NINE COOLERS. THE ONLY OTHER BID RECEIVED OFFERED TO FURNISH THE COOLERS FOR A TOTAL AMOUNT OF $2,219.31. THE GOVERNMENT'S ESTIMATE WAS $2,482.

AWARD WAS MADE TO GENERAL ELECTRIC AT $1,818 AND THE COOLERS WERE DELIVERED AND ACCEPTED BY THE HOSPITAL ON OCTOBER 4, 1966. TWO MONTHS LATER, WHILE IN THE PROCESS OF PREPARING TO INSTALL THE COOLERS, THE USING FACILITY NOTICED THAT THE FILTERS HAD NOT BEEN DELIVERED. THE CONTRACTING OFFICER NOTIFIED GENERAL ELECTRIC OF ITS FAILURE TO FURNISH THE FILTERS AS CALLED FOR IN THE SPECIFICATIONS. UPON NOTIFICATION OF THE DISCREPANCY, GENERAL ELECTRIC ALLEGED AN ERROR IN THAT IT HAD FAILED TO INCLUDE THE COST OF THE FILTERS IN ITS BID PRICE AND BASED ITS BID SOLELY ON THE PRICE OF THE COOLER. IN SUPPORT THEREOF, IT SUBMITTED A PRICE LIST SHOWING THE ACTUAL NET PRICE OF THE PARTICULAR MODEL WHICH CORRESPONDS WITH THE PRICE QUOTED BY GENERAL ELECTRIC IN ITS BID. THE COMPANY SEEKS AN ADJUSTMENT IN THE CONTRACT PRICE IN THE AMOUNT OF $312.75, REPRESENTING THE ADDITIONAL COST OF THE FILTERS AND SPARE FILTER ELEMENTS ALREADY DELIVERED TO THE FACILITY. IT IS POINTED OUT THAT THE CONTRACT PRICE, IF ADJUSTED, WOULD STILL REPRESENT THE LOWEST BID UNDER THE INVITATION.

THE INVITATION ISSUED IN THE PRESENT INSTANCE WAS CLEAR AND UNAMBIGUOUS AS TO THE REQUIREMENTS OF THE GOVERNMENT. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE THERETO WAS UPON THE BIDDERS. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 163. IT IS CLEAR THAT ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS DUE SOLELY TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THUS THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249, 259, AND SALIGMAN ET AL V. UNITED STATES, 56 F.SUPP. 505, 507. THE CONTRACT HAD BEEN AWARDED TO GENERAL ELECTRIC BEFORE ANY ALLEGATION OF ERROR AND THE QUESTION BECOMES NOT WHETHER THE CONTRACTOR MADE A BONA FIDE MISTAKE IN THE PREPARATION OF ITS BID, BUT WHETHER, NEVERTHELESS, A LEGAL AND BINDING CONTRACT WAS FORMED BY THE ACCEPTANCE OF THE BID. WHILE THERE WAS A DIFFERENCE BETWEEN THE TWO BIDS SUBMITTED, WE HAVE HELD THAT ORDINARILY NO FAIR COMPARISON CAN BE MADE WHERE ONLY TWO VARIANT BIDS ARE RECEIVED, THERE BEING NO MORE REASON FOR CONSIDERING THE LOW BID TOO LOW THAN FOR CONSIDERING THAT A MISTAKE WAS MADE BY THE HIGH BIDDER IN QUOTING A PRICE TOO HIGH. 20 COMP. GEN. 286. FURTHER, THE BIDS WERE BASED UPON DIFFERENT BRAND-NAME ITEMS DETERMINED TO BE OF EQUAL PERFORMANCE CHARACTERISTICS BUT OTHERWISE AFFORDING NO BASIS FOR A FAIR COMPARISON AS TO PRICE. THUS, NOTICE TO THE CONTRACTING OFFICER WAS NEITHER ACTUALLY NOR CONSTRUCTIVELY PRESENT IN THE CIRCUMSTANCES. THEREFORE, AND SINCE THE MISTAKE WAS NOT MUTUAL AND WAS NOT ALLEGED UNTIL AFTER ACCEPTANCE OF THE BID, THERE IS NO LEGAL BASIS FOR RELIEVING THE CONTRACTOR FROM THE OBLIGATION IMPOSED UPON IT BY THE ACCEPTANCE IN GOOD FAITH OF ITS BID OR FOR ADJUSTING THE CONTRACT PRICE TO COVER REQUIRED ITEMS. SEE 27 COMP. GEN. 17 AND CASES CITED THEREIN. THEREFORE, PAYMENT IS AUTHORIZED ONLY ON THE BASIS OF THE ACCEPTED TOTAL BID PRICE.