B-163082, MAY 3, 1968, 47 COMP. GEN. 616

B-163082: May 3, 1968

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CONTRACTS - MISTAKES - VERIFICATION PRIOR TO ALLEGATION OF ERROR - ADEQUACY OF INFORMATION A CONTRACTING OFFICER WHO INQUIRED IF A LOW BID GREATLY OUT OF LINE WITH THE GOVERNMENT'S ESTIMATE AND THE NEXT LOW BID WAS CONSIDERED SATISFACTORY. AS A SPECIFIC REQUEST FOR BID VERIFICATION IS NOT NECESSARY WHERE THE BIDDER'S ATTENTION HAS BEEN INVITED TO CHECKING THE BID PRICES AND THE CONTRACTING OFFICER IS ADVISED THE BID HAS BEEN VERIFIED AND NO ERROR FOUND. THERE IS NO ENTITLEMENT TO ADDITIONAL COMPENSATION ON THE BASIS OF A MISTAKE IN BID ALLEGED A YEAR AFTER CONTRACT AWARD. WHERE THE BIDDER KNEW HIS BID WAS SUBSTANTIALLY LOWER THAN THE GOVERNMENT'S ESTIMATE AND THE NEXT LOW BID. IS NOT FOR APPLICATION.

B-163082, MAY 3, 1968, 47 COMP. GEN. 616

CONTRACTS - MISTAKES - VERIFICATION PRIOR TO ALLEGATION OF ERROR - ADEQUACY OF INFORMATION A CONTRACTING OFFICER WHO INQUIRED IF A LOW BID GREATLY OUT OF LINE WITH THE GOVERNMENT'S ESTIMATE AND THE NEXT LOW BID WAS CONSIDERED SATISFACTORY, IF THE BID FIGURES HAD BEEN CHECKED, AND IF THE JOB COULD BE PERFORMED AT THE BID PRICE QUOTED, SATISFIED THE VERIFICATION REQUIREMENTS OF PARAGRAPH 2-406.3 (E) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION AND SUFFICIENTLY WARNED THE BIDDER OF THE POSSIBILITY OF A MISTAKE IN BID, AS A SPECIFIC REQUEST FOR BID VERIFICATION IS NOT NECESSARY WHERE THE BIDDER'S ATTENTION HAS BEEN INVITED TO CHECKING THE BID PRICES AND THE CONTRACTING OFFICER IS ADVISED THE BID HAS BEEN VERIFIED AND NO ERROR FOUND. THEREFORE, ACCEPTANCE OF THE BID WITHOUT KNOWLEDGE OF ERROR HAVING CONSUMMATED A VALID AND BINDING CONTRACT, THERE IS NO ENTITLEMENT TO ADDITIONAL COMPENSATION ON THE BASIS OF A MISTAKE IN BID ALLEGED A YEAR AFTER CONTRACT AWARD. BIDS - MISTAKES - VERIFICATION - PRIOR TO ALLEGATION OF ERROR IN THE ABSENCE OF AN ALLEGATION OF MISTAKE IN BID, WHERE THE BIDDER KNEW HIS BID WAS SUBSTANTIALLY LOWER THAN THE GOVERNMENT'S ESTIMATE AND THE NEXT LOW BID, AND HE HAD BEEN FURNISHED AN ABSTRACT OF BIDS, PARAGRAPH 2- 406.3 (E) (1) OF THE ARMED SERVICES PROCUREMENT REGULATION, REQUIRING THAT A BIDDER ALLEGING MISTAKE BE ADVISED TO MAKE A WRITTEN REQUEST FOR MODIFICATION OR WITHDRAWAL OF HIS BID, IS NOT FOR APPLICATION, AS THERE IS NO REQUIREMENT IN THE REGULATION THAT A BIDDER BE ADVISED OF HIS LEGAL RIGHTS IF NO MISTAKE IN BID HAS BEEN ALLEGED, NOR DOES THE CONTRACTING OFFICER HAVE A DUTY TO ADVISE A BIDDER OF ANY ADMINISTRATIVE PROCEDURE UNDER WHICH CONSIDERATION COULD BE GIVEN TO A REQUEST FOR BID CORRECTION OR PERMISSION TO WITHDRAW A BID.

TO HAROLD F. BLASKY, MAY 3, 1968:

REFERENCE IS MADE TO YOUR LETTERS DATED DECEMBER 5, 1967, AND MARCH 4, 1968, CONCERNING THE REQUEST MADE ON BEHALF OF BUCK AND DONOHUE, INCORPORATED, NEWARK, NEW JERSEY, FOR RELIEF ON ACCOUNT OF ALLEGED MISTAKES MADE IN ITS BID ON THE WORK COVERED BY CONTRACT NO. DA 30-023 CIVENG-66-1, DATED JULY 13, 1965, WHICH WAS AWARDED BY THE OFFICE OF THE UNITED STATES DISTRICT ENGINEER, ARMY ENGINEER DISTRICT, CORPS OF ENGINEERS, BUFFALO, NEW YORK, FOR THE COMPLETION OF A PROJECT DESCRIBED AS "LOCAL FLOOD PROTECTION, SMOKES CREEK, LACKAWANNA, NEW YORK, SECTION III.'

THE CONTRACT WAS AWARDED PURSUANT TO AN INVITATION FOR BIDS ISSUED ON MAY 14, 1965. THE SCHEDULE OF THE INVITATION LISTED 49 ITEMS OF WORK AND MATERIAL FOR WHICH LUMP-SUM PRICES WERE REQUESTED ON 44 ITEMS. FOR THE REMAINING ITEMS, UNIT PRICES WERE REQUIRED TO BE QUOTED ON THE BASIS OF ESTIMATED QUANTITIES. UNDER ITEM NO. 10, THE UNIT AND TOTAL PRICES WERE TO BE BASED ON AN ESTIMATED 79,000 CUBIC YARDS OF CHANNEL EXCAVATION AND, UNDER ITEM NO. 37, THE UNIT AND TOTAL PRICES WERE TO BE BASED ON AN ESTIMATED 16,000 SQUARE YARDS OF RIPRAP PROTECTION.

SEVEN BIDS WERE RECEIVED AND OPENED, AS SCHEDULED, ON JUNE 15, 1965. THE LOW BID IN THE AMOUNT OF $1,037,104 WAS SUBMITTED BY BUCK AND DONOHUE, INCORPORATED, AND THE SIX OTHER BIDS RANGED FROM $1,466,414 TO $1,787,515. REPRESENTATIVES OF THE LOW BIDDER WERE PRESENT AT THE BID OPENING WHEN THE AMOUNTS OF THE SEVEN BIDS AND THE GOVERNMENT'S $1,392,000 ESTIMATE OF A REASONABLE CONTRACT PRICE, WITHOUT PROFIT, WERE DISCLOSED. THE LOW BIDDER WAS SUBSEQUENTLY FURNISHED AN ABSTRACT OF BIDS SHOWING THE TOTAL PRICES OF THE SEVEN BIDS, THE ITEM PRICES OF THE THREE LOWEST BIDDERS AND THE ITEM AND TOTAL AMOUNTS INVOLVED IN THE GOVERNMENT ESTIMATE.

ON JUNE 24, 1965, THE DISTRICT ENGINEER (CONTRACTING OFFICER) PREPARED A MEMORANDUM FOR THE RECORD WHICH STATES AS FOLLOWS:

1. MR. BUCK OF BUCK AND DONAHUE, APPARENT LOW BIDDER ON STAGE III OF SMOKES CREEK, CALLED ME THIS DATE TO INQUIRE INTO THE STATUS OF THE AWARD ON THE SUBJECT BID.

2. I INFORMED HIM THAT I RECENTLY SIGNED A LETTER ADDRESSED TO HIS FIRM REQUESTING FINANCIAL DATA, INFORMATION ON OTHER WORK, ETC., WHICH WE REQUIRE NORMALLY PRIOR TO AWARD. HE STATED THAT HE HAD NOT RECEIVED OUR LETTER AND FELT THAT WE HAD ALL THE BACKGROUND INFORMATION ON HIS FIRM EXCEPT HIS CURRENT FINANCIAL STATEMENT.

3. IN DISCUSSING THE MATTER HE INDICATED THAT HIS FIRM HAD BEEN WORKING FOR BOTH PHILADELPHIA AND PITTSBURGH DISTRICTS FOR A PERIOD OF SOME 18 YEARS. HE STATED THAT THE FIRM WAS CURRENTLY NOT WORKING ON ANY JOB AND WERE ANXIOUS TO LEARN THE STATUS OF THEIR BID HERE. I QUERIED HIM WITH REGARD TO OTHER WORK HE HAD HAD IN THE AREA, ALSO AS TO HIS PLANS FOR FURNISHING PLANT, IF HE IS THE SUCCESSFUL BIDDER ON OUR JOB. HE INDICATED THAT BUCK AND DONAHUE DOES NOT HAVE ENOUGH EQUIPMENT TO PERFORM THIS JOB AND WOULD HAVE TO ACQUIRE SOME EQUIPMENT LOCALLY ON A RENTAL BASIS. ASSURED HIM THAT HE WOULD RECEIVE OUR LETTER IN THE NEAR FUTURE.

ON MARCH 9, 1967, THE DISTRICT ENGINEER PREPARED AN ADDITIONAL MEMORANDUM FOR THE FILES FOR THE PURPOSE OF SETTING FORTH HIS RECOLLECTION OF THE EVENTS REGARDING THE AWARD OF THE CONTRACT TO BUCK AND DONOHUE, INCORPORATED. THE DISTRICT ENGINEER CONSIDERED THAT THE REFERENCED EVENTS SUPPORT A FINDING OF GOOD FAITH IN MAKING THE AWARD AND A FURTHER FINDING OF SUBSTANTIAL COMPLIANCE WITH THE REGULATIONS HAVING TO DO WITH A PREAWARD BID VERIFICATION. THE MEMORANDUM FIRST INDICATES THAT AN ANALYSIS OF THE LOW BID DISCLOSED THAT IT WAS CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE BUT THAT THERE WERE NO APPARENT CARDINAL OMISSIONS AND THE ITEM BID PRICES, WHEN COMPARED TO THE GOVERNMENT ESTIMATES, WERE LOW FOR VIRTUALLY ALL OF THE ITEMS INVOLVED. THE MEMORANDUM THEN STATES THAT THE PREAWARD SURVEY SHOWED THAT THE CONTRACTOR HAD GAINED WIDE EXPERIENCE AND KNOWLEDGE IN SMALL FLOOD CONTROL JOBS OF THE TYPE INVOLVED IN THIS CASE, AND REFERS TO THE TELEPHONE CONVERSATION OF JUNE 24, 1965. THE MEMORANDUM ALSO CONTAINS THE FOLLOWING ADDITIONAL STATEMENTS:

4. AGAIN ON THE 8TH OF JULY 1965 MR. BUCK OF THE FIRM OF BUCK AND DONOHUE, INC. CONTACTED ME AND MADE FURTHER INQUIRY AS TO WHETHER OR NOT WE WERE GOING TO MAKE AN AWARD TO HIS COMPANY. HE AGAIN STATED THAT THEY WERE VERY ANXIOUS TO PERFORM THE WORK AND WE DISCUSSED AT THAT TIME THE FACT THAT HIS BID WAS CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE. INDICATED TO ME IN A VERY POSITIVE FASHION THAT THE FIRM WAS NOT ENGAGED IN ANY WORK AT THE MOMENT. HENCE, THEY WERE ANXIOUS TO OBTAIN THIS CONTRACT AT THE PRICE BID AND TO PERFORM THE WORK IN ACCORDANCE THEREWITH. IT IS MY FIRM RECOLLECTION THAT MR. HOURIGAN, CHIEF OF THE OPERATIONS DIVISION, INFORMED ME OF SIMILAR CONVERSATIONS HE HAD HAD WITH BUCK AND DONOHUE, INC. JUST PRIOR TO MY CONVERSATION WITH MR. BUCK ON 8 JULY 1965.

5. ON THE BASIS OF THESE EVALUATIONS AND CONTACTS, IT WAS MY DECISION AS CONTRACTING OFFICER TO CONSIDER THAT THERE WAS AN AGREEMENT BETWEEN THE TWO PARTIES ON A CONTRACT PRICE AND THAT THERE WAS NO FURTHER NEED TO PURSUE THE DIFFERENCE BETWEEN THE GOVERNMENT ESTIMATE AND THE LOW BID. THERE WAS NO INDICATION BY THE BONDING COMPANY OF ANY DOUBTS REGARDING THE BID AND NO INDICATION BY THE FIRM OF BUCK AND DONOHUE THAT THEY INTENDED TO BID A DIFFERENT AMOUNT AND PRESENT IT AT THE TIME OF BID OPENING.

THE CONTRACT WAS AWARDED TO BUCK AND DONOHUE, INCORPORATED, ON JULY 13, 1965, AND THE FORMAL CONTRACT DOCUMENTS WERE SIGNED BY THE CONTRACTOR ON THE SAME DATE. ALSO THE CONTRACTOR FURNISHED THE PERFORMANCE AND PAYMENT BONDS, AS REQUIRED.

BY LETTER DATED JUNE 28, 1966, APPROXIMATELY 1 YEAR AFTER THE DATE BILITY THAT PRICING ERRORS WERE MADE IN ITS BID ON THE PROJECT. THE CONTRACTOR SUBSEQUENTLY SUBMITTED EVIDENCE ON THE BASIS OF WHICH THE CONTRACTING OFFICER RECOGNIZED THAT MISTAKES AGGREGATING THE SUM OF $148,234 WERE MADE IN THE BID AS THE RESULT OF OMITTING CERTAIN ELEMENTS OF COST IN THE COMPUTATION OF PRICES ON 16 ITEMS OF THE INVITATION, INCLUDING SEVEN CARE- OF-WATER ITEMS, SEVEN ITEMS FOR EXCAVATION AT BRIDGES, ITEM NO. 10, FOR CHANNEL EXCAVATION, AND ITEM NO. 37, FOR RIPRAP PROTECTION. THE CONTRACTING OFFICER RECOMMENDED THAT THE CONTRACT PRICE BE INCREASED BY THE SUM OF $109,991.92, REPRESENTING THE DIFFERENCE BETWEEN THE ABOVE AMOUNT OF $148,234 AND THE SUM OF $38,242.08 WHICH WAS REQUIRED TO BE WAIVED UNDER THE FORMULA OF THE CLAUSE ENTITLED "MISTAKES IN BIDS," AS SET FORTH AT PAGES 2 AND 3 OF THE INVITATION FOR BIDS.

THE DIVISION ENGINEER CONCURRED IN THE CONTRACTING OFFICER'S RECOMMENDATION BUT IT APPEARS THAT HE RECOGNIZED THE FACT THAT THE CONTRACTOR WOULD NOT BE ENTITLED TO ADDITIONAL COMPENSATION ON ACCOUNT OF MISTAKES IN BID UNLESS IT WAS DETERMINED THAT THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE ERRORS WHEN THE BID WAS ACCEPTED. MICHAEL CHERNICK V UNITED STATES, 178 CT. CL. 498. THE DIVISION ENGINEER EXPRESSED THE OPINION THAT, SINCE THE LOW BID WAS APPROXIMATELY 25-1/2 PERCENT BELOW THE GOVERNMENT'S COST ESTIMATE AND APPROXIMATELY 29 PERCENT BELOW THE NEXT LOWEST BID, THE CONTRACTING OFFICER SHOULD HAVE BEEN ALERTED TO THE LIKELIHOOD OF MISTAKE IN THE BID, AND THAT HE SHOULD ALSO HAVE SOUGHT A VERIFICATION OF THE BID IN THE MANNER PRESCRIBED IN PARAGRAPH 2-406.3 (E) (1), ARMED SERVICES PROCUREMENT REGULATION (ASPR). HOWEVER, ALLOWANCE OF THE RECOMMENDED CONTRACT PRICE INCREASE WAS DISAPPROVED IN A MEMORANDUM OF DECISION DATED SEPTEMBER 18, 1967, SIGNED BY THE ACTING CHIEF OF ENGINEERS, WHICH IS, IN PERTINENT PART, AS FOLLOWS:

3. * * * RECORDS OF THE DISTRICT OFFICE REVEAL THAT REPRESENTATIVES OF THE LOW BIDDER WERE PRESENT WHEN BIDS WERE OPENED AND THE GOVERNMENT ESTIMATE WAS DISCLOSED. FURTHERMORE, THE CONTRACTING OFFICER STATES THAT ON 8 JULY 1965, WHICH WAS DURING THE PERIOD BETWEEN OPENING OF BIDS AND CONTRACT AWARD, HE DISCUSSED WITH THE LOW BIDDER THE FACT THAT THE BID WAS CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE. THE LOW BIDDER, HOWEVER, INFORMED THE CONTRACTING OFFICER THAT IT WAS ANXIOUS TO OBTAIN THE CONTRACT AT THE PRICE BID.

4. A REVIEW OF THE ABSTRACT OF BIDS INDICATES THAT ALTHOUGH THE LOW BID WAS 25-1/2 PERCENT BELOW THE GOVERNMENT ESTIMATE, NO CARDINAL OMISSIONS WERE APPARENT SINCE THE ITEM PRICES WHEN COMPARED TO THE GOVERNMENT ESTIMATE WERE LOW FOR VIRTUALLY ALL OF THE ITEMS INVOLVED. THE PREAWARD SURVEY INDICATED THAT THE CONTRACTOR HAD GAINED WIDE EXPERIENCE AND KNOWLEDGE IN SMALL FLOOD CONTROL JOBS OF THE TYPE INVOLVED UNDER THE INVITATION.

5. AFTER CONSIDERING ALL THE EVIDENCE I FIND (A) THAT ANY ERROR MADE IN THE PREPARATION OF THE LOW BID WAS UNILATERAL; (B) THAT AFTER BID OPENING AND PRIOR TO AWARD, THE CONTRACTING OFFICER PUT THE BIDDER ON NOTICE THAT ITS BID WAS CONSIDERABLY BELOW THE GOVERNMENT ESTIMATE; (C) THAT DESPITE SUCH NOTICE, THE LOW BIDDER INSISTED UPON AWARD OF THE CONTRACT AT THE PRICE BID; AND (D) THAT THE AWARD RESULTED IN A BINDING CONTRACT. * * *

YOU WERE ADVISED INFORMALLY OF THE SUBSTANCE OF THE ADMINISTRATIVE REPORT ON THE ALLEGED BIDDING MISTAKES AND THE MATTER WAS DISCUSSED WITH YOU AND MR. HORACE M. BUCK, PRESIDENT OF BUCK AND DONOHUE, INCORPORATED, AT A MEETING IN OUR OFFICE ON MARCH 1, 1968. MR. BUCK AMENDED HIS AFFIDAVIT OF OCTOBER 16, 1967, WHICH WAS SUBMITTED WITH YOUR LETTER OF DECEMBER 5, 1967, CONTENDING THAT THE CONTRACTOR IS ENTITLED TO ADDITIONAL COMPENSATION IN THE AMOUNT OF $178,428. THE AFFIDAVIT, AS AMENDED, INCLUDES THE STATEMENT THAT, DURING THE TELEPHONE CONVERSATION OF JULY 8, 1965, THE CONTRACTING OFFICER ASKED MR. BUCK WHETHER HIS COMPANY WAS SATISFIED WITH THE BID, WHETHER THE BID FIGURES HAD BEEN CHECKED AND WHETHER MR. BUCK BELIEVED THAT THE JOB COULD BE PERFORMED FOR THE BID PRICE. MR. BUCK STATED THAT, IN RESPONSE TO THOSE INQUIRIES, HE ADVISED THE CONTRACTING OFFICER THAT HE WAS AWARE OF THE SPREAD BETWEEN THE LOW BID AND THE NEXT LOWEST AND ,WAS VERY UNHAPPY WITH THE BID; " THAT HE HAD GONE OVER THE ABSTRACT OF BIDS AND FOUND NO ERRORS, BUT THE PRICES WERE, IN GENERAL, VERY LOW AND THAT HE THOUGHT THAT THE COMPANY COULD PERFORM THE JOB FOR THE BID PRICE.

THE AFFIDAVIT CONTAINS ADDITIONAL STATEMENTS TO THE EFFECT THAT MR. BUCK HAD NOT RECOVERED FULLY FROM A SERIOUS ILLNESS WHEN THE BID OF HIS COMPANY WAS UNDER CONSIDERATION; THAT NOTHING WAS SAID IN THE TELEPHONE CONVERSATION OF JULY 8, 1965, WITH RESPECT TO ANY RIGHT WHICH THE COMPANY MIGHT HAVE TO SEEK TO HAVE THE BID CORRECTED IF MISTAKES IN BID HAD OCCURRED; AND THAT, IF THE CONTRACTING OFFICER HAD ADVISED MR. BUCK THAT THERE WAS A POSSIBILITY THAT THE BID COULD BE CORRECTED OR THAT HIS COMPANY COULD BE RELIEVED OF THE RESPONSIBILITY FOR PERFORMANCE OF THE WORK ON THE BASIS OF A SHOWING THAT MISTAKES HAD BEEN MADE IN THE BID, MR. BUCK WOULD HAVE ACCOMPLISHED A MUCH MORE THOROUGH ANALYSIS OF THE BID ITEMS AND WOULD HAVE DISCOVERED BEFORE AWARD OF THE CONTRACT "THE ERRORS OF OMISSION THAT NOW EXPLAIN TO A GREAT EXTENT THE DISPARITY OF THE BID.'

BEFORE CONSIDERING THE SPECIFIC CONTENTIONS MADE IN THE MATTER, IT MUST BE EMPHASIZED THAT THE SOLE QUESTION HERE FOR CONSIDERATION IS NOT WHETHER MISTAKES WERE MADE IN THE BID OF BUCK AND DONOHUE, INCORPORATED, AS HAVE BEEN ALLEGED, BUT WHETHER, A BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THAT COMPANY'S BID. ALLIED CONTRACTORS, INC. V UNITED STATES, 159 CT.CL. 548, 310 F.2D 945.

MR. BUCK HAS DENIED THAT HIS COMPANY INSISTED UPON RECEIVING A CONTRACT AWARD OR THAT THE CONTRACTING OFFICER WAS INFORMED THAT THE COMPANY WAS ANXIOUS TO OBTAIN THE CONTRACT AT THE BID PRICE. HOWEVER, SINCE MR. BUCK WAS AFFORDED AN OPPORTUNITY TO VERIFY THE BID AND HIS RESPONSE WAS TO THE EFFECT THAT HE HAD FOUND NO ERRORS AND BELIEVED THAT THE JOB COULD BE PERFORMED FOR THE BID PRICE, IT APPEARS TO BE IMMATERIAL WHETHER MR. BUCK ALSO INDICATED THAT HE "WAS VERY UNHAPPY WITH THE BID.' A STATEMENT THAT HE WAS VERY UNHAPPY WITH THE BID COULD BE REGARDED AS MEANING THAT THE COMPANY REALIZED THAT IT WAS TAKING A CHANCE THAT THE JOB COULD BE PERFORMED AT A REASONABLE PROFIT, AND THAT THE COMPANY REGRETTED ONLY THAT IT HAD NOT SUBMITTED A HIGHER BID WHICH WOULD NOT HAVE CHANGED ITS STANDING AS THE LOW BIDDER.

IN YOUR LETTER DATED MARCH 4, 1968, YOU INDICATED THAT THE CONTRACTOR HAS AGREED TO ACCEPT THE SUM OF $109,991.92 AS THE CORRECT AMOUNT DUE ON ACCOUNT OF THE ALLEGED BIDDING MISTAKES. YOU STATED THAT IT IS YOUR CLIENT'S BASIC POSITION THAT, UNDER THE LAW AND THE DECISIONS OF OUR OFFICE, WHEN AN ERROR IS SUSPECTED, OR BECAUSE OF THE SPREAD IN BIDS SHOULD BE SUSPECTED, THE CONTRACTING OFFICER OWES THE BIDDER AN AFFIRMATIVE DUTY, NOT ONLY TO PLACE THE BIDDER ON NOTICE THAT THE BID IS BELOW THE GOVERNMENT ESTIMATE, BUT ALSO TO POINT OUT TO THE BIDDER THE POSSIBILITY OF AN ERROR AND TO ADVISE THE BIDDER THAT, IF IN FACT AN ERROR WAS MADE, ESTABLISHED PROCEDURES EXIST THAT WOULD PERMIT EITHER CORRECTION OR WITHDRAWING THE BID, DEPENDENT UPON THE PARTICULAR CIRCUMSTANCES INVOLVED. YOU REFERRED TO THE HOLDING IN UNITED STATES V METRO NOVELTY MANUFACTURING CO., 125 F.SUPP. 713, THAT REAFFIRMATION OF A BID, WHERE THE PLAINTIFF WAS NOT PLACED ON NOTICE OF THE MISTAKE WHICH THE GOVERNMENT SURMISED, DID NOT BAR THE DEFENSE OF RESCISSION; TO A DECISION OF OUR OFFICE WHICH RECOGNIZED AND FOLLOWED THAT PRINCIPLE (44 COMP. GEN. 383); TO A DECISION OF OUR OFFICE IN WHICH IT WAS DETERMINED THAT THE CONTRACTING OFFICER WOULD HAVE KNOWN THAT A MISTAKE IN BID HAD OCCURRED IF HE HAD CONSULTED THE RECORD OF A PREVIOUS PROCUREMENT (45 COMP. GEN. 305); AND TO THE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION CONCERNING THE MATTER OF BID VERIFICATIONS IN CASES OF APPARENT MISTAKES OR WHERE THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE IN BID HAS BEEN MADE.

SO FAR AS CONCERNS THE CITED PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATION, PARAGRAPH ASPR 2-406.3 (E) (1) ESTABLISHES THE BASIC PROCEDURES TO BE FOLLOWED BY CONTRACTING OFFICERS OF THE MILITARY DEPARTMENTS IN REQUESTING BID VERIFICATIONS. THAT PARAGRAPH STATES IN PART AS FOLLOWS:

(1) IN THE CASE OF ANY SUSPECTED MISTAKE IN BID, THE CONTRACTING OFFICER WILL IMMEDIATELY CONTACT THE BIDDER IN QUESTION CALLING ATTENTION TO THE SUSPECTED MISTAKE, AND REQUEST VERIFICATION OF HIS BID. THE ACTION TAKEN TO VERIFY BIDS MUST BE SUFFICIENT TO EITHER REASONABLY ASSURE THE CONTRACTING OFFICER THAT THE BID AS CONFIRMED IS WITHOUT ERROR OR ELICIT THE ANTICIPATED ALLEGATION OF A MISTAKE BY THE BIDDER. TO INSURE THAT THE BIDDER CONCERNED WILL BE PUT ON NOTICE OF A MISTAKE SUSPECTED BY THE CONTRACTING OFFICER, THE BIDDER SHOULD BE ADVISED, AS IS APPROPRIATE, OF (I) THE FACT THAT HIS BID IS SO MUCH LOWER THAN THE OTHER BID OR BIDS AS TO INDICATE A POSSIBILITY OF ERROR, (II) IMPORTANT OR UNUSUAL CHARACTERISTICS OF THE SPECIFICATIONS, (III) CHANGES IN REQUIREMENTS FROM PREVIOUS PURCHASES OF A SIMILAR ITEM, OR (IV) SUCH OTHER DATA PROPER FOR DISCLOSURE TO THE BIDDER AS WILL GIVE HIM NOTICE OF THE SUSPECTED MISTAKE. IF THE BID IS VERIFIED, THE CONTRACTING OFFICER WILL CONSIDER THE BID AS ORIGINALLY SUBMITTED. * * * IF A BIDDER ALLEGES A MISTAKE, THE CONTRACTING OFFICER WILL ADVISE THE BIDDER TO MAKE A WRITTEN REQUEST INDICATING HIS DESIRE TO WITHDRAW OR MODIFY THE BID. * * *

YOU CONTENDED IN YOUR LETTER OF MARCH 4, 1968, THAT THE ADMINISTRATIVE REPORT INDICATES A CLEAR FAILURE ON THE PART OF THE CONTRACTING OFFICER TO COMPLY EITHER WITH THE LETTER OR THE INTENT OF THE REGULATION. YOU STATED THAT THE ONLY COMMUNICATION BETWEEN THE CONTRACTING OFFICER AND THE LOW BIDDER DEALT WITH THE FACT THAT THERE WAS A WIDE SPREAD BETWEEN THE GOVERNMENT ESTIMATE AND THE LOW BID, A FACT WHICH WAS EQUALLY EVIDENT TO THE LOW BIDDER FROM THE ABSTRACT OF BIDS; THAT AT NO TIME DID THE CONTRACTING OFFICER INDICATE TO THE LOW BIDDER THAT HE SUSPECTED THAT A MISTAKE HAD OCCURRED AND AT NO TIME DID THE CONTRACTING OFFICER SUGGEST TO THE LOW BIDDER THAT THE LOW BIDDER CHECK TO ASSURE ITSELF THAT IN FACT A MISTAKE HAD NOT BEEN MADE; AND THAT AT NO TIME DID THE CONTRACTING OFFICER INDICATE IN ANY WAY TO THE LOW BIDDER THAT, IN THE EVENT THE BID DID CONTAIN MISTAKES, A PROCEDURE WAS PROVIDED IN THE REGULATIONS WHICH WOULD AFFORD AN AVENUE FOR CORRECTING THE BID, OR RELIEVING THE BIDDER FROM THE CONSEQUENCES OF HIS ERRONEOUS BID. YOU ALSO STATED THAT IT IS DIFFICULT TO UNDERSTAND HOW A CONTRACTING OFFICER EXPERIENCED IN THE PARTICULAR TYPE OF CONSTRUCTION COULD HAVE FAILED TO SUSPECT ERROR WHEN THE BID WAS 25-1/2 PERCENT BELOW THE GOVERNMENT ESTIMATE WITHOUT PROFIT, APPROXIMATELY 30 PERCENT BELOW THE NEXT LOWEST BID, AND ALMOST 40 PERCENT BELOW THE AVERAGE OF ALL THE BIDS RECEIVED. YOU CONTENDED THAT THE CONTRACTING OFFICER WAS PARTICULARLY ON NOTICE OF THE POSSIBILITY OF ERROR IN THE UNIT PRICES QUOTED BY THE LOW BIDDER ON ITEMS NOS. 10 AND 37 OF THE INVITATION FOR BIDS, SINCE THE PRICES OF $1.35 PER CUBIC YARD AND $6 PER SQUARE YARD WERE MUCH LOWER THAN THE GOVERNMENT'S ESTIMATES OF $1.97 AND $10.40 AND THE PRICES OF $2 AND $14 WHICH WERE QUOTED ON THOSE ITEMS BY THE BIDDER WHO SUBMITTED THE SECOND LOWEST BID IN THE TOTAL AMOUNT OF $1,466,414.

IN A PARENTHETICAL STATEMENT OF YOUR LETTER DATED MARCH 4, 1968, IT IS CONTENDED THAT THE CONTRACTOR WAS PLACED ON NOTICE ONLY WITH RESPECT TO THE FACT THAT ITS BID WAS BELOW THE GOVERNMENT'S TOTAL COST ESTIMATE WITHOUT PROFIT. HOWEVER, MR. BUCK'S AFFIDAVIT OF OCTOBER 16, 1967, AS AMENDED, CLEARLY SHOWS THAT THE DISPARITY BETWEEN THE LOW BID AND THE OTHER BIDS WAS RECOGNIZED DURING THE TELEPHONE CONVERSATION OF JULY 8, 1965, SINCE HE PURPORTEDLY ADVISED THE CONTRACTING OFFICER THAT HE HAD GONE OVER THE ABSTRACT OF BIDS AND THAT HE WAS AWARE OF THE SPREAD BETWEEN THE LOW BID AND THE NEXT LOWEST. IN OUR OPINION, IT MAKES NO DIFFERENCE WHETHER THE DISPARITY BETWEEN THE LOW BID AND THE NEXT LOWEST WAS FIRST MENTIONED BY THE CONTRACTING OFFICER. MR. BUCK KNEW THAT THE COMPANY'S BID WAS OUT OF LINE WITH THE OTHER BIDS AND THE CONTRACTING OFFICER, UPON BEING ADVISED OF SUCH RECOGNITION, CERTAINLY WAS NOT THEN UNDER ANY DUTY TO INFORM MR. BUCK THAT A DISPARITY BETWEEN THE BIDS EXISTED.

EVEN IF THE MATTER SHOULD BE CONSIDERED AS INVOLVING A SITUATION UNDER WHICH THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE POSSIBILITY THAT A MISTAKE WAS MADE IN THE BID, WE BELIEVE THAT A SUFFICIENT WARNING WAS GIVEN BY THE CONTRACTING OFFICER TO THE CONTRACTOR THAT THERE EXISTED THE POSSIBILITY OF A MISTAKE IN THE BID WHEN MR. BUCK WAS ASKED WHETHER HIS COMPANY WAS SATISFIED WTH THE BID, WHETHER THE BID FIGURES HAD BEEN CHECKED AND WHETHER MR. BUCK BELIEVED THAT THE JOB COULD BE PERFORMED AT THE BID PRICE. SEE ALABAMA SHIRT AND TROUSER CO. V UNITED STATES, 121 CT. CL. 313, WHEREIN THE COURT OF CLAIMS CONCLUDED THAT THE GOVERNMENT'S AGENTS DID ALL THAT COULD HAVE BEEN EXPECTED TO PROTECT THE PLAINTIFF FROM ITS OWN IMPRUDENCE, AND THAT THE PLAINTIFF COULD NOT CHARGE THE GOVERNMENT "WITH HAVING SNAPPED UP AN ADVANTAGEOUS OFFER MADE BY MISTAKE.'

WE FIND NO BASIS FOR YOUR APPARENT CONTENTION THAT THE ESSENTIAL REQUIREMENTS OF ASPR 2-406.3 (E) (1) CANNOT BE MET OTHER THAN BY THE MAKING OF A SPECIFIC REQUEST FOR THE VERIFICATION OF A BID. APPARENTLY A SPECIFIC REQUEST FOR VERIFICATION WOULD NOT BE NECESSARY WHERE, AS HERE, THE BIDDER'S ATTENTION HAS BEEN INVITED TO THE MATTER OF CHECKING HIS BID PRICES AND THE CONTRACTING OFFICER IS ADVISED THAT THE BIDDER HAD GONE OVER HIS BID AND FOUND NO ERRORS.

SINCE NO ALLEGATION OF MISTAKE WAS MADE BY THE CONTRACTOR DURING THE TELEPHONE CONVERSATION OF JULY 8, 1965, OR AT ANY OTHER TIME PRIOR TO THE MAKING OF THE CONTRACT AWARD, THE PROVISION OF ASPR 2-406.3 (E) (1), REQUIRING THAT A BIDDER WHO ALLEGES A MISTAKE BE ADVISED TO MAKE A WRITTEN REQUEST FOR MODIFICATION OR WITHDRAWAL OF THE BID, WAS NOT APPLICABLE. NEITHER DO WE AGREE THAT, IN THE ABSENCE OF AN ALLEGATION OF MISTAKE, IT WAS THE DUTY OF THE CONTRACTING OFFICER TO ADVISE THE CONTRACTOR OF ANY ADMINISTRATIVE PROCEDURE UNDER WHICH CONSIDERATION COULD BE GIVEN TO A REQUEST FOR CORRECTION OF THE BID OR TO A REQUEST FOR PERMISSION TO WITHDRAW THE BID. THERE IS NO REQUIREMENT IN THE ARMED SERVICES PROCUREMENT REGULATION THAT A BIDDER BE ADVISED WITH RESPECT TO HIS LEGAL RIGHTS IF HE HAS MADE A MISTAKE, WHERE NO MISTAKE HAS BEEN ALLEGED. COMP. GEN. 679; SALIGMAN, ET AL. V UNITED STATES, 56 F.SUPP. 505.

IT IS UNFORTUNATE THAT MR. BUCK MAY NOT HAVE RECOVERED FULLY FROM A SERIOUS ILLNESS WHEN THE BID OF HIS COMPANY WAS UNDER CONSIDERATION. HOWEVER, THE RECORD REASONABLY INDICATES THAT THE BID OF BUCK AND DONOHUE, INCORPORATED, WAS ACCEPTED IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL LONG AFTER AWARD OF THE CONTRACT; AND THAT THE GOVERNMENT FULFILLED ITS RESPONSIBILITY FOR VERTIFICATION OF THE BID EVEN IF IT BE CONSIDERED THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THAT A MISTAKE HAD BEEN MADE IN THE BID EITHER DURING OR PRIOR TO THE TELEPHONE CONSERVATION WITH MR. BUCK ON JULY 8, 1965. CONSEQUENTLY, IT MUST BE HELD THAT ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V UNITED STATES, 259 U.S. 75.

IT WAS THE RESPONSIBILITY OF BUCK AND DONOHUE, INCORPORATED, TO ESTIMATE THE PRICES AT WHICH IT COULD PERFORM THE PROPOSED CONTRACT AT A REASONABLE PROFIT AND, IF MISTAKES WERE MADE IN ITS PRICING ESTIMATES, THE GOVERNMENT CANNOT BE HELD RESPONSIBLE FOR THE RESULTING LOSS. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V UNITED STATES, 100 CT. CL. 120, 163; EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249; AND SALIGMAN, ET AL. V UNITED STATES, SUPRA. FURTHERMORE, WE ARE REQUIRED TO APPLY THE RULE THAT AGENTS AND OFFICERS OF THE UNITED STATES HAVE NO AUTHORITY, WITHOUT A COMPENSATING BENEFIT TO THE GOVERNMENT, TO MODIFY EXISTING CONTRACTS, OR TO WAIVE CONTRACT RIGHTS WHICH HAVE VESTED IN THE UNITED STATES. SEE 40 COMP. GEN. 684, 688.

ACCORDINGLY, THE REQUEST FOR RELIEF IN THE MATTER, WHICH IS BASED ON MISTAKES IN BID NOT ALLEGED UNTIL SEVERAL MONTHS AFTER THE AWARD OF CONTRACT NO. DA 30-023-CIVENG-66-1, IS HEREBY DENIED.