B-162857, NOV. 21, 1967

B-162857: Nov 21, 1967

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A LOW "ALL OR NONE" BIDDER WHO AFTER AWARD OF CONTRACT FOR TRACTORS ALLEGES FAILURE TO INCLUDE COST FOR 4 CANOPY TOPS MAY NOT HAVE CONTRACT REFORMED SINCE CONTRACTING OFFICER'S DETERMINATION THAT HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR IS NOT SUPPORTED. SINCE PRICES OF OTHER BIDS WERE IN LINE WITH EACH OTHER AND ALL LESS THAN GOVERNMENT ESTIMATE SO THAT LOWER PRICE OF SUCCESSFUL BIDDER COULD HAVE BEEN ATTRIBUTED TO ITS "ALL OR NONE" OFFER. ERROR WAS UNILATERAL AND RELIEF IS NOT GRANTED. SECRETARY: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 1. INDICATES THAT INDIVIDUAL BID PRICES WERE RECEIVED FROM THREE BIDDERS ON ITEMS 5 AND 6. AWARD WAS NOT MADE PURSUANT TO THE INDIVIDUAL PRICES INDICATED THEREIN.

B-162857, NOV. 21, 1967

BIDS - MISTAKES - ALL OR NONE BIDS DECISION TO SECY. OF AGRICULTURE DENYING REQUEST FOR REFORMATION OF CONTRACT TO INTERNATIONAL HARVESTER CO. (HC) FOR 7 CRAWLER TRACTORS FOR FOREST SERVICE ON BASIS OF ERROR. A LOW "ALL OR NONE" BIDDER WHO AFTER AWARD OF CONTRACT FOR TRACTORS ALLEGES FAILURE TO INCLUDE COST FOR 4 CANOPY TOPS MAY NOT HAVE CONTRACT REFORMED SINCE CONTRACTING OFFICER'S DETERMINATION THAT HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR IS NOT SUPPORTED. SINCE PRICES OF OTHER BIDS WERE IN LINE WITH EACH OTHER AND ALL LESS THAN GOVERNMENT ESTIMATE SO THAT LOWER PRICE OF SUCCESSFUL BIDDER COULD HAVE BEEN ATTRIBUTED TO ITS "ALL OR NONE" OFFER. THEREFORE ACCEPTANCE RESULTED IN BINDING CONTRACT, ERROR WAS UNILATERAL AND RELIEF IS NOT GRANTED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 1, 1967, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, SUBMITTING FOR CONSIDERATION A REQUEST BY INTERNATIONAL HARVESTER COMPANY (IHC), FOR REFORMATION OF CONTRACT 13-310, AWARDED BY THE FOREST SERVICE ON JUNE 19, 1967, FOR THE PURCHASE OF SEVEN CRAWLER TRACTORS, AND ALLIED EQUIPMENT, ADVERTISED UNDER ITEMS 5, 6, 7 AND 9 IN INVITATION FOR BIDS FS-18-67.

THE ABSTRACT OF BIDS, FORWARDED WITH THE LETTER OF NOVEMBER 1, INDICATES THAT INDIVIDUAL BID PRICES WERE RECEIVED FROM THREE BIDDERS ON ITEMS 5 AND 6, FROM TWO BIDDERS ON ITEM 7 AND FROM FOUR BIDDERS ON ITEM 9. AWARD WAS NOT MADE PURSUANT TO THE INDIVIDUAL PRICES INDICATED THEREIN, BUT RATHER, UPON THE BASIS OF THE LOW ALL-OR-NONE PROPOSAL OFFERED BY IHC WHEREBY THE FOUR ITEMS WERE OFFERED AT A LUMP SUM PRICE OF $180,814.36.

THE PURCHASE DESCRIPTION FOR EACH OF THE FOUR ITEMS AWARDED TO IHC SPECIFICALLY PROVIDED THAT THE TRACTORS BE FURNISHED WITH CANOPY TOPS. HOWEVER, THE FOUR UNITS DELIVERED BY IHC UNDER ITEMS 5 AND 6 WERE RECEIVED WITHOUT CANOPY TOPS. UPON INQUIRY BY THE PROCUREMENT AGENCY AS TO THE EXPECTED DELIVERY DATES FOR THE FOUR TOPS, IHC STATED THAT THE REQUIREMENT HAD BEEN OVERLOOKED, BUT THAT ARRANGEMENTS WOULD BE MADE FOR DELIVERY AND INSTALLATION AT THE DELIVERY SITES.

BY LETTER DATED OCTOBER 11, 1967, IHC REQUESTED THE PROCUREMENT AGENCY TO INCREASE THE PRICE FOR ITEMS 5 AND 6 TO COVER THE COST OF PURCHASING, DELIVERING, AND INSTALLING THE FOUR CANOPY TOPS ON THE BASIS THAT THE COST HAD BEEN OMITTED FROM ITS BID INADVERTENTLY. IN SUPPORT OF THE ALLEGATION OF ERROR, IHC FURNISHED THE WORKSHEETS THAT WERE USED TO COMPUTE THE INDIVIDUAL BIDS FOR EACH OF THE TWO ITEMS. THE WORKSHEETS DO NOT SHOW THAT ANY CONSIDERATION WAS GIVEN TO THE REQUIREMENT FOR CANOPY TOPS ON THE FOUR TRACTORS INVOLVED. IN ADDITION, IHC FURNISHED INFORMATION FROM THE CANOPY TOP SUPPLIER WHICH INDICATES THAT THE COST THEREFOR WILL RANGE FROM $890 TO $943.80 PER UNIT.

THE ESTABLISHED RULE IS THAT WHEN A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 23 COMP. GEN. 596.

IN THE IMMEDIATE CASE, THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE CONTRACT PRICE BE INCREASED IN ACCORDANCE WITH IHC'S REQUEST ON THE BASIS THAT THE EVIDENCE SUBMITTED BY IHC SHOWS THAT IT DID NOT INCLUDE IN ITS BID AN AMOUNT FOR THE CANOPY TOPS AND THAT HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID. IN THE LATTER REGARD, THE CONTRACTING OFFICER STATED: "* * * (C) THE CONTINUATION SHEET FOR ARTICLE 20 OF THE QUESTIONNAIRE SUBMITTED WITH THE BID DOES NOT SHOW A CANOPY TOP FOR 5 OR 6 BUT DOES SHOW CANOPY TOPS FOR ITEMS 3, 7 AND 9. (D) THE GOVERNMENT ESTIMATES OF COST PER UNIT WERE $3,000 FOR ITEM 5 AND $6,500 FOR ITEM 6 OVER THE CONTRACT PRICES PAID.'

BIDDERS WERE REQUIRED TO COMPLETE THE REFERENCED QUESTIONNAIRE AND TO RETURN IT WITH THEIR BIDS. ARTICLE 20 IN THE QUESTIONNAIRE REQUIRED THE LISTING BY NAME AND MODEL NUMBER OF "ALLIED EQUIPMENT" FOR EACH TRACTOR. IN RESPONSE TO ARTICLE 20, IHC FURNISHED A LIST IDENTIFYING THE TRACTORS OFFERED UNDER ITEMS 3, 5, 6, 7 AND 9 AND BRIEFLY DESCRIBING CERTAIN EQUIPMENT. HOWEVER, ALTHOUGH THERE WAS EQUIPMENT LISTED IN THE INVITATION AS "ALLIED EQUIPMENT," THE CANOPY TOPS WERE NOT SO LISTED. THEY WERE INCLUDED WITHIN THE GENERAL DESCRIPTIONS OF EACH OF THE ITEMS. THEREFORE, BECAUSE BIDDERS WERE NOT REQUIRED TO STATE IN ARTICLE 20 OF THE QUESTIONNAIRE WHETHER OR NOT CANOPY TOPS WOULD BE SUPPLIED WITH EACH TRACTOR DELIVERED, IHC'S FAILURE TO MENTION THAT CANOPY TOPS WOULD BE FURNISHED WITH ITEMS 5 AND 6 WAS NOT NOTICE TO THE CONTRACTING OFFICER OF A POSSIBILITY OF ERROR IN THE BID. IN THAT CONNECTION, AT ARTICLE 18 IN THE QUESTIONNAIRE WHERE THE BIDDER WAS TO INDICATE ANY DEVIATION FROM THE SPECIFICATION, INC RESPONDED "NONE.' IN THIS REGARD, ARTICLE 19 PROVIDED THAT "IT IS AGREED THAT IN THE EVENT DEVIATIONS ARE NOT LISTED OR FILED UNDER 18 ABOVE, THE RIGHT IS RESERVED BY THE GOVERNMENT TO DEMAND FULL AND COMPLETE COMPLIANCE WITH THE SPECIFICATION REQUIREMENTS.'

THE CONTRACTING OFFICER HAS STATED THAT THE GOVERNMENT ESTIMATES SHOULD HAVE PLACED HIM ON CONSTRUCTIVE NOTICE OF AN ERROR IN BID. THE FIGURES CITED BY THE CONTRACTING OFFICER IN SUPPORT OF THIS CONCLUSION ARE BASED UPON THE PRICES FOR EACH ITEM OF THE INVITATION THAT WERE SUPPLIED BY THE CONTRACTOR SUBSEQUENT TO BID OPENING AND WHICH REFLECT THE "ALL-OR-NONE" DISCOUNT OFFERED BY IHC FOR THE AWARD OF THE FOUR CITED ITEMS OF THE INVITATION. IN THAT REGARD, IT IS A GENERAL RULE THAT A CONTRACTING OFFICER IS NOT UNDER A DUTY TO COMPARE PRICES ON INDIVIDUAL ITEMS WHEN AWARD IS TO BE MADE IN THE AGGREGATE. 17 COMP. GEN. 534. IN ANY EVENT, THE INDIVIDUAL BID PRICES RECEIVED ON ITEMS 5 AND 6 OF THE INVITATION WERE AS FOLLOWS:

5A 5B 6A 6B CATERPILLAR TRACTOR COMPANY

$26,568.65 $26,457.40 $27,802.95 $27,604.35 ALLIS CHALMERS 27,825.00 27,745.00 29,265.00 29,090.00 IHC 26,719.31 26,703.44 28,224.31 28,120.33

THUS, ALL THE BIDS RECEIVED IN RESPONSE TO THE CITED ITEMS WERE IN LINE WITH EACH OTHER AND WERE ALL LESS THAN THE GOVERNMENT ESTIMATES FOR THE CORRESPONDING ITEMS. SPECIFICALLY, IHC'S INDIVIDUAL BIDS FOR ITEMS 5 AND 6 WERE FROM $150.66 TO $515.98 HIGHER THAN CATERPILLAR'S BIDS FOR THE CORRESPONDING ITEMS AND FROM $969.67 TO $1,105.69 LOWER THAN THE CORRESPONDING BIDS OF ALLIS-CHALMERS. IN ADDITION, CATERPILLAR MADE A LUMP-SUM OFFER FOR ITEMS 5, 6, 7 AND 9 WHICH EXCEEDED THE CONTRACT PRICE BY ONLY $6,533.19. THEREFORE, THE LOWER INDIVIDUAL PRICES REVEALED BY IHC AFTER THE BID OPENING COULD REASONABLY BE ATTRIBUTED TO BEING THE RESULT OF THE "ALL-OR-NONE" OFFER WHICH DOES NOT APPEAR TO BE OUT OF LINE WITH THE OTHER "ALL-OR NONE" OFFER RECEIVED.

IN THESE CIRCUMSTANCES, IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE ALLEGED ERRORS IN THE CONTRACTOR'S BID.

THE RECORD INDICATES THAT THE ACCEPTANCE OF IHC'S BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN NOTICED OR ALLEGED UNTIL AFTER AWARD. HENCE, IT MUST BE HELD THAT SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT. COMP. GEN. 700.

FURTHERMORE, THE SOLE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON IHC. FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT. CL. 120, 163. IF IHC OVERLOOKED THE REQUIREMENT FOR CANOPY TOPS ON ITEMS 5 AND 6, SUCH ERROR WAS DUE TO ITS OWN NEGLIGENCE OR OVERSIGHT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--NOT MUTUAL--AND THEREFORE, THE CONTRACTOR IS NOT ENTITLED TO BE RELIEVED FROM ITS OBLIGATION UNDER THE CONTRACT. EDWIN DOUGHERTY AND M. H. OGDEN V. UNITED STATES, 102 CT. CL. 249.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE PRICE OF CONTRACT NO. 13-310.