B-162362, OCT. 10, 1967

B-162362: Oct 10, 1967

Additional Materials:

Contact:

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

 

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

ALLEGED THAT COST OF ITEM WAS OMITTED FROM BID WHICH WAS 4.3 PERCENT LESS THAN SECOND LOW BID. 8.5 PERCENT LESS THAN THIRD AND FOURTH LOW BIDS HAS NOT SUBMITTED A BID THAT WAS INDICATIVE OF POSSIBILITY OF ERROR SO AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF ERROR. ALTHOUGH EVIDENCE AFTER AWARD SUPPORTS ALLEGATION OF ERROR SUCH ERROR IS REGARDED AS UNILATERAL AND THEREFORE BIDDER IS NOT ENTITLED TO RELIEF OR TO INCREASE IN CONTRACT PRICE. TO JAX- FIXTURE AND SUPPLY COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 24. BIDS WERE OPENED ON APRIL 21. TEN BIDS WERE RECEIVED ON ITEM 23. TWO OF WHICH WERE NONRESPONSIVE IN AMOUNTS OF $799.39 AND $816.30 EACH. THE SECOND AND THIRD LOW RESPONSIVE BIDS WERE IN THE AMOUNTS OF $1.

B-162362, OCT. 10, 1967

CONTRACTS - MISTAKES - RELIEF DECISION TO JAX'S FIXTURE AND SUPPLY COMPANY CONCERNING MISTAKE IN BID FOR FOOD PREPARATION AND SERVING EQUIPMENT FOR V.A. HOSPITAL AT GAINESVILLE, FLORIDA. A LOW BIDDER WHO, AFTER AWARD, ALLEGED THAT COST OF ITEM WAS OMITTED FROM BID WHICH WAS 4.3 PERCENT LESS THAN SECOND LOW BID, AND 8.5 PERCENT LESS THAN THIRD AND FOURTH LOW BIDS HAS NOT SUBMITTED A BID THAT WAS INDICATIVE OF POSSIBILITY OF ERROR SO AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF ERROR. ALTHOUGH EVIDENCE AFTER AWARD SUPPORTS ALLEGATION OF ERROR SUCH ERROR IS REGARDED AS UNILATERAL AND THEREFORE BIDDER IS NOT ENTITLED TO RELIEF OR TO INCREASE IN CONTRACT PRICE.

TO JAX- FIXTURE AND SUPPLY COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 24, 1967, WITH ENCLOSURES, REQUESTING CANCELLATION OR ADDITIONAL COMPENSATION BY REASON OF A MISTAKE IN BID MADE WITH RESPECT TO ITEM 23 ALLEGED AFTER AWARD OF VETERANS ADMINISTRATION (VA) PURCHASE ORDER NO. 707 PURSUANT TO INVITATION FOR BIDS NO. 67-18, ISSUED BY THE VA HOSPITAL, GAINESVILLE, FLORIDA.

THE INVITATION FOR BIDS SOLICITED BIDS FOR VARIOUS ITEMS OF FOOD PREPARATION AND SERVING EQUIPMENT, INCLUDING ITEM 23 FOR TWO MOBILE SERVING UNITS. BIDS WERE OPENED ON APRIL 21, 1967, AND TEN BIDS WERE RECEIVED ON ITEM 23, TWO OF WHICH WERE NONRESPONSIVE IN AMOUNTS OF $799.39 AND $816.30 EACH. THE REMAINING EIGHT UNIT-PRICE BIDS RANGED IN PRICE FROM $977.32, LESS 2 PERCENT DISCOUNT, 20 DAYS, TO $1,159.80 NET. THE SECOND AND THIRD LOW RESPONSIVE BIDS WERE IN THE AMOUNTS OF $1,000.80 EACH NET AND $1,057.10, LESS 1 PERCENT DISCOUNT, 20 DAYS. YOUR BID OF $977.32 EACH, LESS 2 PERCENT DISCOUNT, 20 DAYS, WAS LOWEST BID RECEIVED FOR ITEM 23, AND THE PURCHASE ORDER FOR THIS ITEM WAS ISSUED TO YOU ON APRIL 27, 1967.

BY LETTER OF MAY 4, 1967, YOU ADVISED OF AN ERROR IN YOUR BID PRICE FOR ITEM 23 IN THAT YOU NEGLECTED TO INCLUDE THE COST OF THE STEAMTABLE PANS AS SPECIFIED IN THE ITEM DESCRIPTION. YOU CLAIM THAT THE COST OF THE OMITTED PANS WOULD INCREASE YOUR UNIT PRICE BY $197.50. YOU THEREFORE REQUEST CANCELLATION OF THE PURCHASE ORDER OR AN INCREASE OF $197.50 IN YOUR UNIT PRICES. IN LETTERS TO THE PROCUREMENT OFFICE, YOU CONTEND THAT THE CONTRACT SHOULD BE CANCELLED BECAUSE THE SECOND LOW BIDDER CLAIMED ERROR AFTER BID OPENING AND BECAUSE THE CONTRACTING OFFICER RECOMMENDED CANCELLATION OF THE ORDER. YOU EXPRESSED THE FEELING THAT RELIEF SHOULD BE GRANTED SINCE YOUR ERRONEOUS BID WAS BASED ON A VERY MINIMAL MARGIN OF PROFIT AND THAT A BONA FIDE ERROR WAS MADE.

CONCERNING YOUR ALLEGATION AS TO A REQUEST FOR REVISION IN PRICE FROM THE SECOND LOW BIDDER, WE NOTE THAT THIS ASPECT OF YOUR CLAIM WAS FULLY DISCUSSED IN A LETTER TO YOU DATED JULY 26, 1967, FROM THE DIRECTOR, SUPPLY SERVICE, AND NEED NOT BE REPEATED HERE.

WE NOTE FROM THE RECORD THAT YOUR BID WAS ONLY 4.3 PERCENT LESS THAN THE SECOND LOW BID OF $1,000.80; 8.5 PERCENT LESS THAN THE THIRD LOW BID OF $1,046.52; AND 9.5 PERCENT LESS THAN THE AVERAGE OF THE SECOND, THIRD AND FOURTH LOW BIDS. (THE FOURTH LOW BID WAS $1,060 AND $1,159.80 WAS THE HIGHEST OF THE 8 RESPONSIVE BIDS RECEIVED). WE DO NOT REGARD THIS RANGE OF BID PRICES AS INDICATIVE OF THE POSSIBILITY OF ERROR IN YOUR BID. THE CONTRACTING OFFICER HAS STATED THAT, IN HIS OPINION, YOUR FAILURE TO INCLUDE THE PRICE OF PANS IN YOUR BID WAS NOT AN OBVIOUS ERROR OR THAT HE WAS ON NOTICE, ACTUAL OR CONSTRUCTIVE, OF ERROR SO AS TO HAVE REQUIRED HIM TO SEEK VERIFICATION FROM YOU PRIOR TO AWARD.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MAE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE. AT THE TIME OF ACCEPTANCE, THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR AND, IN VIEW OF THE CLOSE RANGE IN THE PRICES RECEIVED, WE CANNOT SAY THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE LIKELIHOOD OF ERROR IN YOUR BID. ALTHOUGH, AFTER AWARD, YOU FURNISHED YOUR EVIDENCE TENDING TO SUPPORT YOUR ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT PRIOR TO AWARD THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE DIFFERENT FACTORS USED BY YOU IN COMPUTING YOUR BID PRICE. THE ACCEPTANCE OF YOUR BID, IN THESE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON YOU AS THE BIDDER. WHILE IT MAY BE THAT AN ERROR WAS MADE IN THE BID, IT IS CLEAR THAT SUCH ERROR WAS DUE SOLELY TO YOUR OWN OVERSIGHT OR NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL-- NOT MUTUAL--AND, THEREFORE, DOES NOT ENTITLE YOU TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT. CL. 249; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505; 20 COMP. GEN. 652 AND 26 ID. 415.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR RELIEVING YOU FROM YOUR OBLIGATION TO FURNISH ITEM 23 AT THE CONTRACT PRICE OF FOR INCREASING THE CONSIDERATION UNDER THE PURCHASE ORDER.