B-162700, FEB. 28, 1968

B-162700: Feb 28, 1968

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ONLY BIDDER WHO HAD AFFIRMED LOW ALTERNATE BID PRICE BASED ON EXPECTED COMPETITION AND WHO AFTER AWARD ALLEGES THAT LOW ALTERNATE BID OMITTED PRICE FOR ELECTRIC MOTOR MUST HAVE CONTRACT AWARDED REGARDED AS CONSUMMATING BINDING CONTRACT SINCE FACTS DO NOT CONSTITUTE BASIS FOR HOLDING CONTRACTING OFFICER TO CONSTRUCTIVE NOTICE OF ERROR. TO ALLIS-CHALMERS MANUFACTURING COMPANY: REFERENCE IS MADE TO YOUR LETTERS OF OCTOBER 11. THE AWARD WAS MADE UNDER SOLICITATION NO. BECAUSE A CHEAPER MOTOR WAS OFFERED IN YOUR ALTERNATE BID. THE BID WAS FORWARDED TO THE TECHNICAL ACTIVITY FOR EVALUATION. YOUR WASHINGTON REPRESENTATIVE WAS ADVISED THAT AWARD WAS BEING DELAYED BECAUSE OF YOUR ALTERNATE BID. WHEN THE SOLICITATION WAS RECEIVED.

B-162700, FEB. 28, 1968

CONTRACTS - MISTAKES - RELIEF DECISION TO ALLIS-CHALMERS MANUFACTURING COMPANY DENYING CLAIM ON ACCOUNT OF MISTAKE IN BID IN CONTRACT FOR FURNISHING COMPRESSORS TO THE NAVY. ONLY BIDDER WHO HAD AFFIRMED LOW ALTERNATE BID PRICE BASED ON EXPECTED COMPETITION AND WHO AFTER AWARD ALLEGES THAT LOW ALTERNATE BID OMITTED PRICE FOR ELECTRIC MOTOR MUST HAVE CONTRACT AWARDED REGARDED AS CONSUMMATING BINDING CONTRACT SINCE FACTS DO NOT CONSTITUTE BASIS FOR HOLDING CONTRACTING OFFICER TO CONSTRUCTIVE NOTICE OF ERROR.

TO ALLIS-CHALMERS MANUFACTURING COMPANY:

REFERENCE IS MADE TO YOUR LETTERS OF OCTOBER 11, 1967, AND NOVEMBER 6, 1967, WITH ENCLOSURES, REQUESTING RELIEF ON ACCOUNT OF A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. N00600-67-C-0259 BY THE UNITED STATES NAVY PURCHASING OFFICE, WASHINGTON NAVY YARD. THE AWARD WAS MADE UNDER SOLICITATION NO. N00600-67-B-0081 COVERING AN AIR COMPRESSOR, DATED AUGUST 9, 1966, AND OPENED ON AUGUST 31, 1966.

OUT OF THE 59 FIRMS SOLICITED, YOUR FIRM SUBMITTED THE ONLY BID. YOU OFFERED TO FURNISH THE COMPRESSOR FOR $40,517, AND IN A LETTER ACCOMPANYING YOUR BID YOU OFFERED AN ALTERNATE BID IN THE AMOUNT OF $38,907 BASED ON A CHEAPER ELECTRIC MOTOR MEETING THE MINIMUM SPECIFICATIONS.

BECAUSE A CHEAPER MOTOR WAS OFFERED IN YOUR ALTERNATE BID, THE BID WAS FORWARDED TO THE TECHNICAL ACTIVITY FOR EVALUATION. DURING THE ENSUING DELAY, YOUR WASHINGTON REPRESENTATIVE WAS ADVISED THAT AWARD WAS BEING DELAYED BECAUSE OF YOUR ALTERNATE BID. WHEN QUERIED ABOUT THE ALTERNATE BID, THE REPRESENTATIVE ADVISED THAT HE HAD INITIALLY EXPECTED THE SOLICITATION TO BE ON A SOLE-SOURCE BASIS, BUT WHEN THE SOLICITATION WAS RECEIVED, IT SEEMED THAT THE ITEM WAS HIGHLY COMPETITIVE. IN VIEW THEREOF, ALLIS-CHALMERS BID A LOW PRICE AND A LOWER ALTERNATE PRICE BASED ON A CHEAPER MOTOR. SINCE THE REPRESENTATIVE HAD ADVISED THAT THE PRICES WERE BASED ON PUBLISHED PRICE LISTS, SUCH LISTS WERE REQUESTED TO VERIFY THAT FACT BUT APPARENTLY NONE WERE FURNISHED.

AWARD WAS MADE TO YOU ON OCTOBER 12, 1966, AT THE LOWER ALTERNATE BID PRICE OF $38,907. BY LETTER OF FEBRUARY 20, 1967, YOU ALLEGED THAT AN ERROR WAS MADE IN COMPUTING YOUR BID IN THAT YOU FAILED TO INCLUDE THE PRICE OF THE ELECTRIC MOTOR ($9,387) IN YOUR BID. IN SUPPORT THEREOF, COPIES OF YOUR WORKSHEETS WERE SUBMITTED WHICH INDICATED THAT THE PRICE OF THE ELECTRIC MOTOR WAS NOT CARRIED FORWARD INTO YOUR BID.

BY LETTER OF MAY 8, 1967, THE NAVY REJECTED YOUR REQUEST FOR AN INCREASE IN THE PRICE BECAUSE YOU HAD AFFIRMED YOUR ALTERNATE PRICE IN YOUR LETTER ACCOMPANYING THE SOLICITATION AND BECAUSE YOU HAD ADVISED PRIOR TO AWARD THAT YOU WERE OFFERING A LOWER PRICE THAN USUAL IN ANTICIPATION OF EXPECTED COMPETITION. IN YOUR LETTER OF OCTOBER 11, 1967, YOU CONTEND THAT IF THE NAVY DID NOT HAVE ACTUAL KNOWLEDGE OF THE ERROR, IT HAD CONSTRUCTIVE NOTICE THEREOF. YOU SUPPORT THIS ALLEGATION BY CITING A PROPOSAL OF MAY 10, 1966, TO THE UNITED STATES NAVY MARINE ENGINEERING LABORATORY FOR SIMILAR EQUIPMENT. HOWEVER, THE CONTRACTING OFFICER HAS REPORTED THAT SHE WAS NOT AWARE OF THIS QUOTATION TO THE LABORATORY WHICH WAS NOT FOR IDENTICAL EQUIPMENT.

ASPR 2-406.1 PROVIDES THAT AFTER BID OPENING CONTRACTING OFFICERS EXAMINE ALL BIDS FOR MISTAKE, AND "IN CASES OF APPARENT MISTAKES, AND IN CASES WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE MAY HAVE BEEN MADE, HE SHALL REQUEST FROM THE BIDDER A VERIFICATION OF THE BID, CALLING ATTENTION TO THE SUSPECTED MISTAKE.' PURSUANT TO THIS PROVISION, THE CONTRACTING OFFICER EXAMINED YOUR BID AND FOUND NOTHING ON THE FACE OF THE BID TO INDICATE THAT IT WAS OTHER THAN INTENDED. ALSO, SINCE YOUR BID WAS THE ONLY BID RECEIVED, THERE WAS NO BASIS FOR COMPARISON OF BIDS.

SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF YOUR BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. THE RESPONSIBILITY FOR THE PREPARATION OF YOUR BID WAS CLEARLY UPON YOU AS THE BIDDER. FRAZIER-DAVIS CONSTRUCTION COMPANY V UNITED STATES, 100 CT. CL. 120 (1943); CF. SALIGMAN V UNITED STATES, 56 F.SUPP. 505 (1944); EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249 (1944). WE ARE OF THE OPINION THAT THE FACTS PRESENT HERE WERE NOT SUCH AS TO HAVE PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR. 17 COMP. GEN. 560; 26 ID. 415. MOREOVER, THE ERROR ALLEGED WAS MADE IN THE PREPARATION OF THE BID AND AS SUCH WAS ATTRIBUTABLE SOLELY TO YOUR NEGLIGENCE AND NOT TO ANY FAULT OF THE GOVERNMENT. 40 COMP. GEN. 326.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR RELIEVING YOU FROM THE LEGAL CONSEQUENCES OF YOUR CONTRACT.