B-161489, JUN. 23, 1967

B-161489: Jun 23, 1967

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INCORPORATED: REFERENCE IS MADE TO YOUR LETTER DATED MAY 4. IN YOUR LETTER IT IS ALLEGED CERTAIN IMPROPER PRACTICES WERE INVOLVED IN THE AWARD OF CONTRACT NO. THIS OFFICE WAS ADVISED BY THE GENERAL SERVICES ADMINISTRATION THAT THE CONTRACT IN QUESTION WAS FOR A NEW HEATING SYSTEM IN THE FEDERAL BUILDING AT CLEVELAND. THAT UPON OPENING THE BIDS IT WAS DISCOVERED THAT THE LOW BID WAS APPROXIMATELY $40. 500 IN THE SUMMARY SHEET UPON WHICH THE BID WAS COMPUTED. WHERE A MISTAKE IS SO APPARENT THAT THE CONTRACTING OFFICER MUST HAVE KNOWLEDGE OF IT. WHEN THE EVIDENCE IS CLEAR AND CONVINCING. THE PRACTICE OF ALLOWING CORRECTION OF APPARENT MISTAKES IN BIDS IS NOT ONLY CONSISTENT WITH STATUTES REQUIRING COMPETITIVE BIDDING.

B-161489, JUN. 23, 1967

TO HATFIELD MECHANICAL CONTRACTORS, INCORPORATED:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 4, 1967, TRANSMITTED TO THIS OFFICE BY REPRESENTATIVE WILLIAM E. MINSHALL. IN YOUR LETTER IT IS ALLEGED CERTAIN IMPROPER PRACTICES WERE INVOLVED IN THE AWARD OF CONTRACT NO. GS-05BC-6696 BY THE GENERAL SERVICES ADMINISTRATION.

THIS OFFICE WAS ADVISED BY THE GENERAL SERVICES ADMINISTRATION THAT THE CONTRACT IN QUESTION WAS FOR A NEW HEATING SYSTEM IN THE FEDERAL BUILDING AT CLEVELAND, OHIO, AND THAT UPON OPENING THE BIDS IT WAS DISCOVERED THAT THE LOW BID WAS APPROXIMATELY $40,000 LOWER THAN COST OF THE WORK ESTIMATED BY THE GOVERNMENT, 29 PERCENT BELOW THE NEXT BID AND 31 PERCENT BELOW THE THIRD LOW BID. IN LIGHT OF THE LARGE DISCREPANCY, THE CONTRACTING OFFICER REQUESTED CONFIRMATION OF THE LOW BID. IN RESPONSE, THE LOW BIDDER ALLEGED A MISTAKE IN BID CAUSED BY ENTERING THE FIGURE $75,000 AS $7,500 IN THE SUMMARY SHEET UPON WHICH THE BID WAS COMPUTED. UPON COMPLETE AND EXTENSIVE DOCUMENTATION OF THE MISTAKE AND THE ACTUAL AMOUNT OF THE INTENDED BID, THE GENERAL SERVICES ADMINISTRATION ALLOWED AN UPWARD REVISION TO COMPENSATE FOR THE MISTAKE PURSUANT TO THE AUTHORITY IN FPR 1-2.406-3 (A) (2). YOUR LETTER QUESTIONS THE PROPRIETY OF THIS ACTION.

WHERE A MISTAKE IS SO APPARENT THAT THE CONTRACTING OFFICER MUST HAVE KNOWLEDGE OF IT, THE GOVERNMENT CANNOT TAKE ADVANTAGE OF THE CONTRACTOR BY HOLDING IT TO A CONTRACT WHICH IT HAD NO INTENTION OF MAKING. SEE 2 COMP. GEN. 502; 8 ID. 362; 15 ID. 1049; 20 ID. 652. WHEN THE EVIDENCE IS CLEAR AND CONVINCING, THE PRACTICE OF ALLOWING CORRECTION OF APPARENT MISTAKES IN BIDS IS NOT ONLY CONSISTENT WITH STATUTES REQUIRING COMPETITIVE BIDDING, BUT MAY BE NECESSARY TO SECURE THE BENEFITS OF COMPETITION. THE AUTHORITY UNDER FPR 1-2.406-3 (A) (2) TO MAKE SUCH CORRECTIONS STEMS FROM OUR DECISION 38 COMP. GEN. 177. SINCE THE ALLEGATION OF MISTAKE AND THE INTENDED BID WERE BOTH FULLY SUPPORTED BY CLEAR AND CONVINCING EVIDENCE, THIS OFFICE PERCEIVES NO LEGAL BASIS FOR OBJECTING TO THE ACTION TAKEN BY THE GENERAL SERVICES ADMINISTRATION.

YOU ALSO ASSERT THAT THE REGULATION INVOLVED IS RARELY EMPLOYED BY OTHER AGENCIES AND THAT UNIQUE TREATMENT WAS AFFORDED THE LOW BIDDER BY THE GENERAL SERVICES ADMINISTRATION. ONE REASON FOR CONFERRING THE AUTHORITY ON ADMINISTRATIVE OFFICERS TO CORRECT CERTAIN MISTAKES IN 393. THE VOLUME OF SUCH CASES AND THOSE HANDLED ADMINISTRATIVELY HAS UNDERSTANDABLY INCREASED WITH THE INCREASE OF GOVERNMENT CONTRACTING. WITH RESPECT TO THE CONTENTION THAT THIS WAS UNIQUE TREATMENT BY THE GENERAL SERVICES ADMINISTRATION IT SHOULD BE NOTED THAT ALL FEDERAL AGENCIES ARE BOUND EITHER BY THE SAME PROVISION OF THE FEDERAL PROCUREMENT REGULATIONS OR BY THE EQUIVALENT PROVISION IN THE ARMED SERVICES PROCUREMENT REGULATION, ASPR 2-406.3 (A). FPR 1-2-.406 3 (D) (1) REQUIRES THE CONTRACTING OFFICER TO REQUEST VERIFICATION OF A BID WHEN MISTAKE IS SUSPECTED AND COMPLIANCE WITH THIS REGULATION BY THE GENERAL SERVICES ADMINISTRATION WAS NOT UNIQUE AND WAS MANDATORY.

OUR REVIEW OF CONTRACT NO. GS-05BC-6696 HAS NOT REVEALED ANY IRREGULAR OR IMPROPER PRACTICES BY THE GENERAL SERVICES ADMINISTRATION AND IN VIEW OF THE EVIDENTIARY REQUIREMENTS OF THE FEDERAL PROCUREMENT REGULATIONS WE CAN NOT CONCUR THAT THIS POLICY WILL ENCOURAGE FRAUDULENT BIDDING PRACTICES.