B-162678, NOV. 13, 1967

B-162678: Nov 13, 1967

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BIDDER WHO AFTER AWARD ALLEGED THAT PRICE FOR 2 ITEMS WAS ON BASIS OF INCHES INSTEAD OF FEET AND THAT OTHER BIDS RANGED FROM $4. 471.37 SHOULD IN VIEW OF FACT THAT UNIT PRICES WERE REQUIRED IN MANDATORY TERMS HAVE BEEN ASKED TO VERIFY BID FOR ALTHOUGH CONTRACTING OFFICER IS NOT ON DUTY TO COMPARE ITEM PRICES IN CASES OF AGGREGATE AWARD. SECRETARY: REFERENCE IS MADE TO LETTER DATED OCTOBER 13. AWARD WAS TO BE MADE BY GROUP OR IN THE AGGREGATE TO ONE BIDDER. THE ITEMS HERE INVOLVED ARE THOSE CONTAINED IN GROUP C. ITEMS NOS. 17 AND 18 WERE CHANGED TO PROVIDE FOR RODS OF 10 FEET INSTEAD OF 10 INCHES. ITS ENTRIES AND PRICES FOR ITEMS NOS. 17 AND 18 WERE STATED (WITHOUT A CORRECTION APPEARING ON ITS BID FROM INCHES TO FEET) AT UNIT PRICES OF $4.30 AND $4.03.

B-162678, NOV. 13, 1967

CONTRACTS - MISTAKES - CANCELLATION DECISION TO SECRETARY OF THE INTERIOR AUTHORIZING CANCELLATION OF CONTRACT WITH SKYLINE INDUSTRIES, INC., SECOND LOW BIDDER, FOR HARDWARE ITEMS FOR BONNEVILLE POWER ADMINISTRATION. BIDDER WHO AFTER AWARD ALLEGED THAT PRICE FOR 2 ITEMS WAS ON BASIS OF INCHES INSTEAD OF FEET AND THAT OTHER BIDS RANGED FROM $4,941 TO $7,471.37 SHOULD IN VIEW OF FACT THAT UNIT PRICES WERE REQUIRED IN MANDATORY TERMS HAVE BEEN ASKED TO VERIFY BID FOR ALTHOUGH CONTRACTING OFFICER IS NOT ON DUTY TO COMPARE ITEM PRICES IN CASES OF AGGREGATE AWARD, CIRCUMSTANCES JUSTIFY IMPUTING CONSTRUCTIVE NOTICE OF ERROR ON PART OF CONTRACTING OFFICER.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED OCTOBER 13, 1967, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING OUR DECISION AS TO WHETHER THE CONTRACT AWARDED TO SKYLINE INDUSTRIES, INC., UNDER INVITATION FOR BIDS NO. 832 MAY BE RESCINDED IN VIEW OF THE CIRCUMSTANCES REPORTED.

THE BONNEVILLE POWER ADMINISTRATION SOLICITED BIDS UNDER THE INVITATION DATED JUNE 6, 1967, FOR POLE LINE HARDWARE, CONSISTING PRINCIPALLY OF BOLTS, NUTS, RODS, AND RELATED ITEMS. THE INVITATION CONTAINED FIVE GROUPS, A TO E INCLUSIVE, EACH GROUP LISTING THE SUPPLIES REQUIRED THEREUNDER BY ITEM NUMBER, QUANTITIES, UNIT PRICES, AND AMOUNTS. AWARD WAS TO BE MADE BY GROUP OR IN THE AGGREGATE TO ONE BIDDER. THE INVITATION SPECIFICALLY REQUIRED THAT UNIT PRICES BE QUOTED AND WARNED BIDDERS THAT FAILURE TO SO QUOTE WOULD RENDER THE BID NONRESPONSIVE. THE ITEMS HERE INVOLVED ARE THOSE CONTAINED IN GROUP C, CONSISTING OF ITEMS NOS. 15-18, INCLUSIVE, WHICH SPECIFIED THE FOLLOWING: ITEM NO. 15. ROD, THREADED, W/2 SQ. NUTS 7/8 INCH X 14 INCH GALV. DWG. 00-345-A463, SER. 28512.ITEM NO. 16. ROD, THREADED W/2 SQ. NUTS, 1 INCH X 42 INCH GALV. DWG. 00-345- A1458, SER. 24478. ITEM NO. 17. ROD, ANCHOR, TWINEYE, 3/4 INCH X 10 INCH GALV. FURNISHED W/2 NUTS, DWG. 00-345-A303, SER. 16039. ITEM NO. 18. ROD, ANCHOR, TRIPLEYE, 1 INCH X 10 INCH GALV. FURNISHED W/2 NUTS, DWG. 00 -345 A312, SER. 23922.

BY ADDENDUM NO. 1 OF JUNE 13, 1967, ITEMS NOS. 17 AND 18 WERE CHANGED TO PROVIDE FOR RODS OF 10 FEET INSTEAD OF 10 INCHES.

SKYLINE INDUSTRIES, INC., SUBMITTED ITS BID AND THEREIN ACKNOWLEDGED RECEIPT OF ADDENDUM NO. 1. ITS ENTRIES AND PRICES FOR ITEMS NOS. 17 AND 18 WERE STATED (WITHOUT A CORRECTION APPEARING ON ITS BID FROM INCHES TO FEET) AT UNIT PRICES OF $4.30 AND $4.03, RESPECTIVELY. SKYLINE'S AGGREGATE BID FOR GROUP C WAS $4,349. THE LOW AGGREGATE BID FOR GROUP C WAS $4,193, AND OTHER AGGREGATE BIDS RANGED FROM $4,941 TO $7,471.37. HOWEVER, THE LOW BID WAS DETERMINED TO BE NONRESPONSIVE BECAUSE THE BIDDER FAILED TO ACKNOWLEDGE RECEIPT BY AN ADDENDUM. THEREFORE, AWARD WAS MADE TO SKYLINE INDUSTRIES, INC., ON JULY 10, 1967, AT ITS LOW GROUP C AGGREGATE BID OF $4,349.

UNIT PRICES OF ALL BIDS RECEIVED ON GROUP C WERE AS FOLLOWS: ITEM NO. PRUZAN* SKYLINE SCHMITT GRAYBAR GE NGK

15 $ .97 $2.50 $ .95 $ .89 $ .89$1.18474

16 2.59 3.10 2.92 2.80 2.80 3.23518

17 3.26 4.30 4.09 4.31 4.31 6.35134

18 6.27 4.03 7.00 7.666 7.666 10.72857 * (NONRESPONSIVE)

ON AUGUST 14, 1967, THE CONTRACTOR REQUESTED A CANCELLATION OF ITS ENTIRE BID ON THE BASIS THAT "OUR ESTIMATING DEPARTMENT UNDERSTOOD YOUR REQUIREMENTS ON ITEMS 17 AND 18 TO BE FOR 10 INCHES INSTEAD OF 10 FEET PER YOUR AMENDMENT NO. 1 OF 13 JUNE 1967.'

THE LETTER OF OCTOBER 13, 1967, ASSERTS THAT THE CONTRACTING OFFICER SHOULD HAVE HAD CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID FOR ITEM 18 BECAUSE OF THE WIDE DISPARITY OF SKYLINE'S BID FOR THAT ITEM AND THOSE OF THE OTHER RESPONSIVE BIDDERS. ALSO, THE LETTER STATES THAT SUCH DISPARITY OF BID PRICES SHOULD HAVE REQUIRED A VERIFICATION OF SKYLINE'S BID.

AS A GENERAL RULE, WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, THE RESULTING CONTRACT IS NOT SUBJECT TO CANCELLATION SINCE A BINDING AND ENFORCEABLE CONTRACT ARISES UPON ACCEPTANCE. SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, AND THE CASES CITED THEREIN. THIS GENERAL RULE, HOWEVER, IS NOT FOR APPLICATION WHERE, AS HERE, THE CIRCUMSTANCES ARE SUCH THAT THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID PRIOR TO AWARD. IN SUCH CASES, ACCEPTANCE BY THE CONTRACTING OFFICER DOES NOT RESULT IN A BINDING CONTRACT AND EITHER OUR OFFICE OR THE COURTS WILL ALLOW APPROPRIATE RELIEF. SEE 37 COMP. GEN. 85; 17 ID. 575. A DETERMINATION AS TO WHETHER THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED AN ERROR MUST BE REACHED ON A CASE-BY-CASE BASIS IN LIGHT OF ALL THE EVIDENCE. A HARD AND FAST RULE CANNOT BE SET FORTH AS TO THE WEIGHT TO BE GIVEN TO DIFFERENT TYPES OF EVIDENCE OR AS TO WHAT AMOUNT OF EVIDENCE WILL IMPUTE CONSTRUCTIVE KNOWLEDGE OF AN ERROR TO THE CONTRACTING OFFICER.

WHILE A CONTRACTING OFFICER ORDINARILY IS NOT UNDER A DUTY TO COMPARE BID PRICES ON INDIVIDUAL ITEMS WHEN AWARD IS TO BE MADE IN THE AGGREGATE (17 COMP. GEN. 534; 42 ID. 383), IN VIEW OF THE CIRCUMSTANCES OF THIS CASE AND SINCE UNIT PRICES WERE REQUIRED IN MANDATORY TERMS, WE CONCUR IN THE ADMINISTRATIVE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED AN ERROR IN SKYLINE'S BID ON ITEM 18.

ACCORDINGLY, THE CONTRACT MAY BE CANCELED AS ADMINISTRATIVELY RECOMMENDED. SEE B-162068, AUGUST 8, 1967.