B-163751, APR. 5, 1968

B-163751, APR. 5, 1968

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTER DATED MARCH 5, 1968, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, YOUR REFERENCE: DSAH-G, CONCERNING THE ALLEGATION BY THE SIGNAL MOTOR EQUIPMENT COMPANY, SEATTLE, WASHINGTON, OF MISTAKES IN ITS BIDS AFTER AWARD OF SALES CONTRACT 41-8052-087 AND THE REQUEST, IN EFFECT, FOR CORRECTION OF ITS BIDS.

IT IS REPORTED THAT UPON RECEIPT OF THE NOTICE OF AWARD OF THE CONTRACT, THE CONTRACTOR NOTIFIED THE SALES CONTRACTING OFFICER THAT THE BIDS SUBMITTED ON ALL ITEMS COMPRISING MORE THAN ONE UNIT WERE INTENDED AS TOTAL BIDS FOR THOSE RESPECTIVE ITEMS, RATHER THAN BIDS PER UNIT ON EACH ITEM. THE ALLEGATION OF MISTAKE WAS MADE WITH RESPECT TO ITEMS 28 THROUGH 46, 70, 71, 73, 74, 75, 77 THROUGH 83, 85, AND 88. THE ADMINISTRATIVE REPORT STATES THAT A SUBSEQUENT REVIEW BY THE SALES CONTRACTING OFFICER DISCLOSED THAT THE SUM OF THE UNIT PRICES IN THE BID EQUALED THE TOTAL AMOUNT BID ENTERED ON THE STANDARD FORM 114 A, SALE OF GOVERNMENT PROPERTY, BID AND AWARD, EVEN THOUGH A NUMBER OF ITEMS CONSISTED OF TWO UNITS.

THE SALES CONTRACTING OFFICER STATES, UPON REFLECTION, THAT HE WAS OR SHOULD HAVE BEEN ON ACTUAL OR CONSTRUCTIVE NOTICE OF A MISTAKE WHICH WOULD HAVE REQUIRED BID CONFIRMATION PRIOR TO AWARD.

THE ADMINISTRATIVE REPORT FURTHER STATES:

"THERE IS CLEAR AND CONVINCING EVIDENCE OF MISTAKES IN THE BIDS BY REASON OF THE INCOMPATIBILITY OF THE TOTAL AMOUNT BID AND THE BID DEPOSIT AS SET FORTH ON THE SF 114-A WITH THE UNIT BIDS AS SUBMITTED ON THE ITEM BID PAGE (DLSC FORM 71 (REV), SEPT 67) ). THE INTENDED BIDS ON ITEMS 28, 33, 34, 39, 41, 42, 44, 45, 46, 70, 71, 73, 74, 75, 77 THROUGH 83, AND 85 WOULD RESULT IN PRICES LESS THAN THE NEXT HIGH BIDS ON THOSE ITEMS AND THE INTENDED BID ON ITEM 31 IS TIED WITH THE NEXT HIGH BID. THE BIDS BOTH AS SUBMITTED AND AS INTENDED ON ITEMS 29, 30, 32, 35, 36, 37, 38, 40, 43, AND 88 ARE THE HIGH BIDS RECEIVED ON THESE ITEMS.'

THE REPORT INCLUDES A RECOMMENDATION THAT THE CONTRACT BE REFORMED BY DELETION OF ITEMS 28, 33, 34, 39, 41, 42, 44, 45, 46, 70, 71, 73, 74, 75, 77 THROUGH 83, AND 85 SINCE THE INTENDED UNIT PRICES ON THESE ITEMS ARE NOT THE HIGH BIDS AND BY THE DELETION OF ITEMS 29, 30, 31, 32, AND 88 SINCE THE INTENDED UNIT PRICES ON THESE LATTER ITEMS WOULD NOT PRODUCE A FAIR RETURN TO THE GOVERNMENT. IT IS FURTHER RECOMMENDED THAT REDUCTION OF THE UNIT PRICES ON ITEMS 35, 36, 37, 38, 40 AND 43 BE AUTHORIZED TO CONFORM WITH THE INTENDED BID OF $78 EACH SINCE THE INTENDED BIDS ON THESE ITEMS ARE STILL HIGH AND APPROXIMATE THE CURRENT MARKET APPRAISAL.

THE CONTRACTOR'S WORKPAPERS SUBSTANTIATE HIS EXPLANATION OF THE MANNER IN WHICH THE ERROR OCCURRED, AND WE AGREE THAT THE SALES CONTRACTING OFFICER SHOULD HAVE REQUIRED VERIFICATION OF THE BIDS PRIOR TO AWARD.

ACCORDINGLY, THE CONTRACT MAY BE REFORMED BY DELETING ITEMS 28, 29, 30, 31, 32, 33, 34, 39, 41, 42, 44, 45, 46, 70, 71, 73, 74, 75, 77 THROUGH 83, 85 AND 88, AND THE CONTRACT PRICES ON ITEMS 35, 36, 37, 38, 40 AND 43 MAY BE ADJUSTED TO REFLECT A PRICE OF $78 EACH UNIT OF EACH ITEM, AS ADMINISTRATIVELY RECOMMENDED.