B-161964, JUL. 17, 1967

B-161964: Jul 17, 1967

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IN THIS PROCUREMENT THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT CONTRACTOR WHO WAS BIDDING NEARLY SAME PRICE AS HE HAD BID ON PRIOR CONTRACT FOR 50 PERCENT LESS WORK HAD MADE MISTAKE AND FAILURE TO REQUEST CONFIRMATION PREVENTED VALID CONTRACT. VETERANS ADMINISTRATION: THIS IS IN RESPONSE TO A LETTER DATED JUNE 30. THIS ACTION IS ADVISED BECAUSE OF A MISTAKE IN BID ALLEGED BY THE CONTRACTOR EIGHT DAYS AFTER AWARD. THE INVITATION WAS ISSUED ON MAY 19. THE ONLY BID RECEIVED WAS IN THE AMOUNT OF $4. A LETTER WAS ADDRESSED TO THE COMPANY ADVISING THAT IT HAD BEEN AWARDED THE CONTRACT. THE COMPANY ADVISED THE VETERANS ADMINISTRATION CENTER THAT IT HAD MADE A SERIOUS ERROR IN BIDDING BY ASSUMING THAT THE REQUIREMENT WAS FOR CLEANING ONLY THE OUTSIDE OF THE WINDOWS.

B-161964, JUL. 17, 1967

CONTRACTS - MISTAKES - CANCELLATION DECISION TO VA HOLDING THAT CONTRACT FOR WINDOW CLEANING SERVICES MAY BE CANCELLED. IN THIS PROCUREMENT THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT CONTRACTOR WHO WAS BIDDING NEARLY SAME PRICE AS HE HAD BID ON PRIOR CONTRACT FOR 50 PERCENT LESS WORK HAD MADE MISTAKE AND FAILURE TO REQUEST CONFIRMATION PREVENTED VALID CONTRACT.

TO THE HONORABLE W. J. DRIVER, ADMINISTRATOR, VETERANS ADMINISTRATION:

THIS IS IN RESPONSE TO A LETTER DATED JUNE 30, 1967, YOUR REFERENCE 134G, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, IN WHICH HE RECOMMENDS THE CANCELLATION OF CONTRACT NO. V6152P 809 AWARDED BY THE VETERANS ADMINISTRATION CENTER, WADSWORTH, KANSAS, ON JUNE 8, 1967, UNDER INVITATION 68-10 TO THE BUILDING MAINTENANCE COMPANY, KANSAS CITY, MISSOURI, FOR WINDOW CLEANING SERVICES. THIS ACTION IS ADVISED BECAUSE OF A MISTAKE IN BID ALLEGED BY THE CONTRACTOR EIGHT DAYS AFTER AWARD.

THE INVITATION WAS ISSUED ON MAY 19, 1967, TO 12 PROSPECTIVE BIDDERS AND LISTED A REQUIREMENT FOR SEMI-ANNUAL CLEANING OF WINDOWS BOTH INSIDE AND OUTSIDE AT THE VETERANS ADMINISTRATION CENTER. THE ONLY BID RECEIVED WAS IN THE AMOUNT OF $4,496 FROM THE BUILDING MAINTENANCE COMPANY. SUBSEQUENTLY, ON JUNE 8, 1967, A LETTER WAS ADDRESSED TO THE COMPANY ADVISING THAT IT HAD BEEN AWARDED THE CONTRACT. BY LETTER DATED JUNE 16, 1967, THE COMPANY ADVISED THE VETERANS ADMINISTRATION CENTER THAT IT HAD MADE A SERIOUS ERROR IN BIDDING BY ASSUMING THAT THE REQUIREMENT WAS FOR CLEANING ONLY THE OUTSIDE OF THE WINDOWS. IN THIS CONNECTION THE COMPANY STATED THAT THE REQUIREMENTS IN PREVIOUS INVITATIONS INCLUDING ONE ISSUED ON APRIL 10, 1967, FOR CLEANING THE SAME WINDOWS REQUIRED THAT ONLY THE OUTSIDE OF THE WINDOWS BE CLEANED, AND THAT IT ASSUMED THE PRESENT SOLICITATION WAS ON THE SAME BASIS.

THE BASIC QUESTION FOR DETERMINATION IS WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CREATED A BINDING CONTRACT. WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, THE CONTRACT IS USUALLY PRESUMED TO EXPRESS THE UNDERSTANDING OF THE PARTIES; HOWEVER, IF THE ALLEGED MISTAKE WAS OR SHOULD HAVE BEEN KNOWN TO THE OTHER PARTY TO THE CONTRACT THE PARTY MAKING THE MISTAKE HAS THE RIGHT TO RESCIND. MOFFETT, HODGKINS AND CLARKE CO. V. CITY OF ROCHESTER, 178 U.S. 373; 5 WILLISTON CONTRACTS, SEC. 1578; 37 COMP. GEN. 685. ORDINARILY WHERE, AS HERE, ONLY ONE BID IS RECEIVED ON AN ITEM, THERE IS NO BASIS FOR COMPARISON OF BIDS; HENCE, THERE IS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. SEE 17 COMP. GEN. 560; 26 ID. 415. HOWEVER, IN THE INSTANT PROCUREMENT THE CONTRACTING OFFICER STATES THAT HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR, SINCE THE BID PRICE FOR WASHING BOTH SIDES OF THE WINDOWS WAS NEARLY THE SAME PRICE AS THAT QUOTED BY THE FIRM ON APRIL 14, 1967, FOR WASHING THE OUTSIDES OF THE WINDOWS ONLY.

WE HAVE HELD THAT THE CONTRACTING OFFICER'S KNOWLEDGE OF PRICES BID ON PRIOR PROCUREMENTS MAY BE ENOUGH TO PUT HIM ON NOTICE OF A PROBABLE BID ERROR IN A SUBSEQUENT PROCUREMENT OF THE SAME ITEM. B-133655, OCTOBER 8, 1957; B-147368, JANUARY 12, 1962; B-155757, JANUARY 4, 1965. SINCE IN THE SUBJECT PROCUREMENT THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT THE CONTRACTOR WAS BIDDING NEARLY THE SAME PRICE AS HE HAD BID ON A PRIOR IDENTICAL PROCUREMENT REQUIRING APPROXIMATELY 50 PERCENT LESS WORK, THE CONTRACTING OFFICER IS ALSO CHARGEABLE WITH NOTICE OF A MISTAKE IN BID, AND HIS FAILURE TO REQUEST CONFIRMATION OF THE BID THEREFORE PREVENTED THE FORMATION OF A VALID CONTRACT.

ACCORDINGLY, SINCE WORK UNDER THE AWARD HAS NOT BEGUN AND THE RECORD DOES NOT ESTABLISH THE INTENDED BID PRICE, THE CONTRACT MAY BE CANCELLED.