B-163040, JAN. 19, 1968

B-163040, JAN. 19, 1968

BIDS - MISTAKES DECISION TO SECRETARY OF AGRICULTURE CONCERNING ERROR MADE BY PREISER SCIENTIFIC, INC. IN BID FOR FREEZE-DRY CABINET AND FREEZER UNDER A READVERTISEMENT OF A DEFAULTED CONTRACT. WHERE AFTER AWARD OF BID UNDER READVERTISEMENT OF A DEFAULTED CONTRACT THAT WAS ONLY $10 LOWER THAN THAT OF BID OF PRIOR CONTRACTS, CONTRACTOR ALLEGED ERROR IN OMISSION OF PRICE OF COMPONENT, THE CONTRACTOR MAY NOT BE RELIEVED FROM OBLIGATION NOR MAY PRICE INCREASE BE ALLOWED SINCE THERE WAS NOTHING ON FACE OF BID TO PLACE CONTRACTING OFFICER ON NOTICE OF ERROR NOR WAS VARIANCE SUCH AS TO INDICATE ERROR. THE INCLUSION OF A SPECIAL PROVISION PERMITTING DEVIATIONS FROM SPECIFICATIONS OR TO ADVISE BIDDERS OF BASIS FOR EVALUATING NONCOMPLIANCE ASPECTS IS OBJECTIONABLE AND SHOULD BE ELIMINATED OR REWORDED IN FUTURE PROCUREMENTS. 44 CG 529, 43 CG 544.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 4, 1967, WITH ATTACHMENTS, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, REQUESTING A DECISION CONCERNING AN ERROR PREISER SCIENTIFIC, INC., HAS ALLEGED IT MADE IN ITS BID UNDER INVITATION NO. 299-E-ARS-67, UPON WHICH AN AWARD HAS BEEN MADE FOR A FREEZE-DRY CABINET WITH A FREEZER, DRYING CHAMBER, AND ACCESSORIES.

BIDS UNDER THE INVITATION, WHICH WAS A READVERTISEMENT OF A DEFAULTED CONTRACT, WERE OPENED ON JUNE 2, 1967. THE FOUR LOW BIDS RECEIVED UNDER THE ORIGINAL PROCUREMENT WERE $3,700, $4,069, $4,333, AND $4,343. FIVE OTHER BIDS RECEIVED UNDER THE EARLIER INVITATION RANGED FROM $4,879 TO $5,361. IT IS REPORTED THAT UNDER THE REPURCHASE INVITATION NINE BIDS WERE ALSO RECEIVED, THE LOWEST OF WHICH WAS SUBMITTED BY PREISER IN THE AMOUNT OF $3,690. THE NEXT THREE LOW BIDS WERE $4,337.44, $4,521.60, AND $4,957. THE OTHER FIVE BIDS RECEIVED RANGED BETWEEN $5,228.15 AND $5,361.80. SINCE THE LOW BID OF PREISER APPEARED TO BE IN ORDER IN COMPARISON TO THE PREVIOUS PROCUREMENT AND THE RANGE OF BIDS RECEIVED, AWARD WAS MADE TO PREISER ON JUNE 6, 1967, IN THE AMOUNT OF $3,690. LETTER OF JULY 19, 1967, THE CONTRACTOR ADVISED THAT THE COST OF AN ACCESSORY, THE STOPPERING CHAMBER, HAVING A LIST PRICE OF $1,390, HAD BEEN INADVERTENTLY OMITTED FROM ITS TOTAL BID PRICE. THE CONTRACTOR FIRST REQUESTED A PRICE INCREASE OF $1,000 EVEN THOUGH THE SELLING PRICE OF THE ITEM IS $1,390. WHEN ADVISED BY THE CONTRACTING OFFICER THAT SUCH AN INCREASE WOULD CAUSE ITS PRICE TO EXCEED THE SECOND LOW BID, THE CONTRACTOR REQUESTED THAT ITS PRICE BE INCREASED BY $647.44, OR EQUAL TO THE AMOUNT OF THE SECOND LOW BID. THE CHAMBER WAS SPECIFIED IN THE BID SPECIFICATIONS AND WAS LISTED BY CATALOG NUMBER BY THE CONTRACTOR ON PAGE 6 OF THE INVITATION. THERE WERE NO EXCEPTIONS INDICATED IN THE BID AND NO EXCEPTIONS WERE TAKEN BY THE CONTRACTOR TO THE BID SPECIFICATIONS. THE CONTRACTOR DID INDICATE ON PAGE 6 OF THE INVITATION THAT THE ITEM IT WOULD FURNISH APPARENTLY WOULD BE THE PRODUCT OF THE SECOND LOW BIDDER (THE VIRTIS CO.).

THE CONTRACTOR STATED THAT THE ERROR OCCURRED WHEN THE PRICE OF THE STOPPERING CHAMBER WAS OMITTED FROM THE ADDING MACHINE TAPE TOTALLING THE COST OF THE VARIOUS ITEMS COMPRISING THE COMPLETE UNIT. THE CONTRACTING OFFICER CHECKED THE COMPONENTS OFFERED BY PREISER AND IT WAS ASCERTAINED THAT ALL ITEMS COMPRISING THE FREEZE-DRY CABINET WOULD BE FURNISHED. WAS NOTED THAT THE PRICE BID BY PREISER WAS ONLY $10 LOWER THAN THAT BID BY THE DEFAULTED CONTRACTOR. DELIVERY OF THE EQUIPMENT IS EXPECTED SHORTLY ACCORDING TO INFORMATION RECEIVED FROM THE CONTRACTOR. THE CLAIM OF ERROR IS SUPPORTED BY THE QUOTATION WORKSHEET AND ADDING MACHINE TAPE FURNISHED BY PREISER. WE ARE INFORMALLY ADVISED BY THE OFFICE OF PLANT AND OPERATIONS THAT THE PRIOR CONTRACT FOR THIS ITEM WAS DEFAULTED BECAUSE THE CONTRACTOR COULD NOT MEET THE SPECIFICATIONS.

ALTHOUGH THE RECORD WOULD SEEM TO ESTABLISH THE FACT THAT THE ERROR, AS ALLEGED, WAS MADE BY PREISER IN THE PREPARATION OF ITS BID, WE FIND NO LEGAL BASIS FOR RELIEVING THE CONTRACTOR FROM THE OBLIGATIONS OF ITS CONTRACT OR FOR INCREASING THE PRICE THEREOF.

IN ORDER FOR AN ERROR IN BID ALLEGED AFTER AWARD TO BE CORRECTED, IT MUST BE ESTABLISHED THAT THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR IN THE BID AT THE TIME OF AWARD. THE BID WAS A LUMP-SUM BID AND THERE WAS NOTHING ON THE FACE OF THE BID TO PUT THE CONTRACTING OFFICER ON NOTICE OF AN ERROR. THE VARIANCE IN THE AMOUNT BETWEEN THE BID SUBMITTED AND THE OTHER BIDS RECEIVED BOTH UNDER THE PRIOR INVITATION AND THE INSTANT INVITATION WAS NOT SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE ERROR IN BID AND WE MUST, THEREFORE, CONCLUDE THAT THE MISTAKE WAS UNILATERAL. THE ACCEPTANCE OF THE BID APPEARS TO HAVE BEEN IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V PURCELL ENVELOPE COMPANY, 249 U.S. 13; AND AMERICAN SMELTING AND REFINING COMPANY V UNITED STATES, 259 U.S. 75. ANY ERROR WHICH WAS MADE IN THE BID WAS UNILATERAL AND THEREFORE DOES NOT ENTITLE THE CLAIMANT TO RELIEF. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249, 259; AND SALIGMAN ET AL. V UNITED STATES, 56 F.SUPP. 505, 507; 40 COMP. GEN. 326.

SINCE THE CONTRACT WAS AWARDED BEFORE ANY ALLEGATION OF ERROR, THERE IS NO LEGAL BASIS FOR RELIEVING PREISER FROM THE OBLIGATION IMPOSED ON IT BY THE ACCEPTANCE OF THE BID OR FOR INCREASING THE CONTRACT PRICE.

WE NOTE THAT THE SPECIAL PROVISIONS OF THE INSTANT INVITATION READ, IN PERTINENT PART, AS FOLLOWS: "CONSIDERATION WILL BE GIVEN TO ITEMS OFFERED WHICH MAY DEVIATE FROM THE SPECIFICATION PARTICULARS, PROVIDED SUCH DEVIATION IS SPECIFICALLY NOTED, AND THAT THE DEVIATION FROM THE SPECIFICATION IS OF MINOR IMPORTANCE AND WILL NOT AFFECT THE ABILITY OF THE UNIT TO PERFORM UPON AN EQUAL BASIS WITH COMPETITIVE UNITS IN ITS CLASS AND OTHERWISE FULFILL THE SERVICE REQUIREMENTS. FAILURE TO ENTER EXCEPTIONS BELOW OR SPECIFICALLY NOTE DEVIATIONS FROM THE SPECIFICATION REQUIREMENTS WILL BE CONSTRUED AS ACCEPTANCE OF THE PROVISIONS AND THE GOVERNMENT WILL DEMAND FULL AND COMPLETE COMPLIANCE WITH THE REQUIREMENTS THEREOF. "BIDDER SHALL FILL IN THE FOLLOWING: THE EQUIPMENT OR MATERIAL TO BE FURNISHED UNDER THIS INVITATION TO BID DEVIATES FROM THE SPECIFICATION REQUIREMENTS IN THE FOLLOWING PARTICULARS: * * * THE BIDDER AGREES THAT IN THE EVENT DEVIATIONS ARE NOT LISTED OR FILED, THE RIGHT IS RESERVED BY THE GOVERNMENT TO DEMAND FULL AND COMPLETE COMPLIANCE WITH THE SPECIFICATION REQUIREMENTS.'

IN 44 COMP. GEN. 529, WE CONSIDERED A SUBSTANTIALLY SIMILAR SPECIAL CONDITION AND HELD AT PAGE 532 THAT:

"* * * THIS PROVISION MAY WELL BE VIOLATIVE OF A FUNDAMENTAL OF THE COMPETITIVE BIDDING STATUTE (41 U.S.C. 253) THAT THE INVITATION MUST BE SUFFICIENTLY DEFINITE TO PERMIT THE PREPARATION AND EVALUATION OF BIDS ON A COMMON BASIS. WHILE IT WAS PROPER FOR THE PROCURING ACTIVITY TO INCLUDE THE REQUIREMENT OF THIS PROVISION IN THE INVITATION TO ENABLE IT TO DETERMINE WHETHER THE EQUIPMENT OFFERED MET THE SPECIFICATIONS AND TO ESTABLISH EXACTLY WHAT THE BIDDER PROPOSED TO FURNISH, FAILURE EITHER TO ADHERE STRICTLY TO ITS REQUIREMENTS OR TO ADVISE BIDDERS OF THE BASIS UPON WHICH PARTICULAR POINTS OF NONCOMPLIANCE WOULD BE EVALUATED, OR WHETHER PARTICULAR DEVIATIONS FROM CERTAIN SPECIFICATIONS WOULD RESULT IN REJECTION OF THEIR BID WOULD, IN EFFECT, PERMIT BIDDERS TO DRAFT THEIR OWN SPECIFICATIONS FROM WHICH THE CONTRACTING OFFICER COULD SELECT THE EQUIPMENT CONSIDERED MOST PREFERABLE. SUCH PROCEDURE, WHICH APPEARS TO BE THE ONLY BASIS FOR THE PROPOSED AWARD, WOULD PERMIT EACH BIDDER TO BID ON THE BASIS OF, AND TO HAVE HIS BID EVALUATED ON, THE PARTICULAR FEATURES OF HIS OWN MACHINE RATHER THAN ON A COMMON BASIS IN STRICT COMPLIANCE WITH THE SPECIFICATIONS. SEE 43 COMP. GEN. 544.'

WE THEREFORE RECOMMEND THAT SUCH A SPECIAL PROVISION BE DELETED FROM FUTURE INVITATIONS OR BE REWORDED TO ELIMINATE ITS OBJECTIONABLE FEATURES. AS REQUESTED, THE DOCUMENTS ACCOMPANYING THE DECEMBER 4, 1967, LETTER ARE RETURNED.