B-163355, JAN. 26, 1968

B-163355, JAN. 26, 1968

BIDS - MISTAKES DECISION TO GPO AUTHORIZING CANCELLATION OF CONTRACT WITH T.F.H. PUBLICATIONS, INC., ON BASIS OF MISTAKE ALLEGED AFTER ISSUANCE OF PURCHASE ORDER. WHERE LOW BIDDER AFTER AWARD ALLEGES ERROR IN OMISSION OF ITEM OF WORK AND CONTRACTING OFFICER WHO HAD COMPARED BID WITH GOV-T. ESTIMATE WHICH WAS $800 HIGHER THAN LOW BID REPORTS THAT IF PROCUREMENT REQUIREMENTS HAD BEEN PROPERLY ASSESSED, GOVT. ESTIMATE WOULD HAVE BEEN APPROXIMATELY $800 HIGHER AND HE WOULD THEREFORE HAVE REQUESTED PRE AWARD VERIFICATION. PURCHASE ORDER MAY BE CANCELLED WITHOUT LIABILITY TO CONTRACTOR.

TO MR. HARRISON:

YOUR LETTER OF JANUARY 16, 1968, REQUESTS OUR DECISION WHETHER T.F.H. PUBLICATIONS, INC. (TFH), MAY BE GRANTED RELIEF FROM PERFORMANCE UNDER PURCHASE ORDER NO. 50616, ISSUED DECEMBER 27, 1967, ON THE BASIS OF A MISTAKE IN BID ALLEGED SUBSEQUENT TO THE ISSUANCE OF THE PURCHASE ORDER.

ON DECEMBER 18, 1967, GOVERNMENT PRINTING OFFICE FORM 183 WAS ISSUED TO SEVERAL SOURCES SOLICITING BIDS ON A REQUIREMENT FOR 15,000 COPIES OF A 74 -PAGE PAMPHLET, SIZE 5-3/4 X 9-1/8 INCHES, WITH A TWO PIECE COVER. THE CONTRACTOR WAS REQUIRED TO TRIM 4 SIDES, PUNCH 18 RECTANGULAR HOLES, GATHER TEXT AND COVER AND INSERT INTO WHITE PLASTIC COMBS OF SUITABLE CAPACITY, AND PACK IN SHIPPING CONTAINERS. THE TEXT PRINTS WERE TO BE BLACK INK, AND THE COVER PRINTS FOR PAGES ONE AND FOUR WERE TO BE AN EXACT MATCH OF GP-113-OR, RED INK. IN ADDITION, THE CONTRACTOR WAS TO FURNISH ONE SET (71) OF FILM NEGATIVES, WHITE OFFSET BOOK PAPER (EQUAL TO GPO LOT NO. 21), SHIPPING CONTAINERS AND PLASTIC COMBS, WHILE THE GPO WAS TO FURNISH NEGATIVES FOR COVER AND TITLE PAGES, 71 PIECES OF CAMERA COPY FOR TEXT AND WHITE VELLUM FINISH COVER STOCK. COMPLETE SHIPMENT WAS REQUIRED TO BE MADE F.O.B. DESTINATION ON OR BEFORE JANUARY 26, 1968.

ON DECEMBER 26, 1967, THE FOUR BIDS WHICH WERE RECEIVED IN RESPONSE TO THE SOLICITATION WERE OPENED AS SCHEDULED. THE PRICES RANGED FROM TFH'S BID OF $2,450 TO A HIGH BID OF $3,630. THE TWO INTERMEDIATE BIDS WERE IN THE AMOUNTS OF $3,119 AND $3,439. SINCE TFH'S BID WAS LOWEST AND COMPARED FAVORABLY WITH AN INFORMAL GPO ESTIMATE, AWARD WAS MADE TO TFH BY ISSUANCE OF A PURCHASE ORDER ON DECEMBER 27.

ON DECEMBER 28, TFH TELEPHONED THE CONTRACTING OFFICER AND CLAIMED THAT IT HAD MADE A MISTAKE IN TYPING ITS BID. PURSUANT TO FEDERAL PROCUREMENT REGULATIONS 1-2.406-4 (F) RELATING TO MISTAKES IN BID DISCLOSED AFTER AWARD, THE CONTRACTING OFFICER REQUESTED THAT TFH DOCUMENT ITS REQUEST FOR RELIEF IN WRITING. ACCORDINGLY, BY LETTER DATED DECEMBER 29 TFH EXPLAINED THAT ITS ORIGINAL BID PRICE SHOULD HAVE BEEN $4,399.40 BUT IN TYPING THE BID FROM ITS WORKSHEET AN ESTIMATE OF $1,949.40 FOR THE PRINTING AND PAPER HAD BEEN OMITTED WITH THE RESULT THAT ONLY AN ESTIMATE OF $2,450 FOR THE BINDING WAS SHOWN. FURTHER, TFH FURNISHED A WORKSHEET DATED DECEMBER 22, 1967, CONSISTING OF TWO IDENTICAL ESTIMATE FORMS LISTING SEVERAL ITEMS, INCLUDING BINDING; ONE FORM SHOWED ONLY THE ITEM "BINDING AND SHIPPING" AT A PRICE OF $2,450 WHILE THE OTHER FORM SHOWED FIVE SEPARATE ITEMS, INCLUDING PAPER AND INK, AT VARIOUS PRICES TOTALLING $1,949.40 BUT NO PRICE FOR ,BINDING.'

A REEXAMINATION BY THE CONTRACTING OFFICER OF ALL OF THE BIDS AND OF THE GPO ESTIMATE REVEALED THAT SUCH ESTIMATE WAS APPROXIMATELY $800 TOO LOW. ACCORDINGLY, THE CONTRACTING OFFICER CONCLUDED THAT PRIOR TO THE AWARD HE SHOULD HAVE MADE A MORE DETAILED COMPARISON OF THE SPECIFICATIONS, THE ESTIMATE, AND THE QUOTATIONS, AND, SPECIFICALLY, HE SHOULD HAVE REQUESTED TFH TO REVIEW THE SPECIFICATIONS AND TO CONFIRM ITS BID PRICE. THEREFORE, AND ON THE BASIS THAT THE CONTRACT PRICE OF $2,450 IS NOT CONSIDERED TO BE A FAIR AND REASONABLE PRICE TO PAY FOR THE WORK REQUIRED BY THE SPECIFICATIONS, THE CONTRACTING OFFICER RECOMMENDS THAT TFH BE RELIEVED OF ITS CONTRACT OBLIGATION.

THE REPORTED FACTS INDICATE THAT HAD THE PROCUREMENT REQUIREMENTS BEEN PROPERLY ASSESSED, THE GOVERNMENT ESTIMATE, TO WHICH THE LOW BID OF $2,450 COMPARED FAVORABLY, WOULD HAVE BEEN APPROXIMATELY $800 HIGHER, AND THE CONTRACTING OFFICER WOULD THEREFORE HAVE REQUESTED PRE AWARD VERIFICATION BY TFH OF ITS LOW BID. IN SUCH CIRCUMSTANCES, IT IS REASONABLE TO ASSUME THAT TFH WOULD HAVE ASSERTED ITS CLAIM OF MISTAKE AND WITHDRAWAL OF THE BID WOULD HAVE BEEN PERMITTED. ACCORDINGLY, AND SINCE THE CONTRACT PRICE APPEARS TO BE UNREASONABLY LOW, THE PURCHASE ORDER MAY BE CANCELLED WITHOUT LIABILITY TO THE CONTRACTOR.

THE FILE FORWARDED WITH YOUR LETTER IS RETURNED EXCEPT THAT THE ORIGINAL CORRESPONDENCE AND ESTIMATE SHEETS FORWARDED BY THE CONTRACTOR ARE BEING RETAINED IN OUR FILES AND THEREFORE HAVE BEEN REPLACED BY COPIES.