B-164354, JUN. 26, 1968

B-164354, JUN. 26, 1968

TO MR. SECRETARY:

WE REFER TO A LETTER, WITH ENCLOSURES, RECEIVED IN OUR OFFICE ON MAY 17, 1968, FROM THE DIRECTOR, DIVISION OF PROCUREMENT AND SUPPLY MANAGEMENT. THE LETTER REQUESTS OUR DECISION AS TO WHETHER PURCHASE ORDER NO. 7330, ISSUED TO THE STAR DENTAL MANUFACTURING COMPANY, INC., PURSUANT TO PUBLIC HEALTH SERVICE CONTRACT NO. PH-87-68-69, MAY BE REFORMED ON THE GROUND OF MISTAKE ALLEGED AFTER AWARD. THE RECORD INDICATES THAT THE AWARD WAS MADE TO STAR DENTAL ON MARCH 19, 1968, FOR FURNISHING 10 ITEMS OF THE 28 ITEMS OF DENTAL SUPPLIES REQUESTED UNDER INVITATION FOR BIDS NO. SSC-49-3-5-68.

BY LETTER DATED MARCH 27, 1968, STAR DENTAL ALLEGED THAT AS A RESULT OF A CLERICAL ERROR THE PRICES QUOTED FOR ITEMS 1 THROUGH 5 WERE ON A "PER PIECE" BASIS RATHER THAN ON A PRICE PER PACKAGE OF SIX BASIS AS REQUESTED IN THE INVITATION.

BOTH THE CONTRACTING OFFICER AND THE DIRECTOR, DIVISION OF PROCUREMENT AND SUPPLY MANAGEMENT, CONSIDER THE EVIDENCE OF MISTAKE TO BE CLEAR AND CONVINCING. FURTHER, THE CONTRACTING OFFICER ADVISES IN A LETTER DATED APRIL 5, 1968, TO FHS HEADQUARTERS, THAT HE SHOULD HAVE REQUESTED VERIFICATION IN VIEW OF THE DISPARITY BETWEEN THE STAR DENTAL PRICES FOR ITEMS 1 THROUGH 5 AND THE PRICES QUOTED BY THE FOUR OTHER BIDDERS FOR THE ITEMS. HE ALSO REFERRED TO THE DISPARITY BETWEEN THE STAR DENTAL BID AND THE AWARD PRICES FOR THE LAST THREE PURCHASES OF ITEMS 1 THROUGH 5. THIS CONNECTION, THE RANGE OF BID PRICES QUOTED FOR THE ITEMS AND THE AWARD PRICES FOR THE PRIOR PROCUREMENTS ARE REPORTED AS FOLLOWS:

A B STAR D E

ITEM 1 2.45 3.65 1.50 2.38 2.35

ITEM 2 2.45 3.65 1.60 2.60 2.35

ITEM 3 2.45 3.65 1.50 2.49 2.35

ITEM 4 2.45 3.65 1.50 2.38 2.35

ITEM 5 2.45 3.65 1.60 2.60 2.35

PURCHASE NO. 1 PURCHASE NO. 2 PURCHASE NO. 3

ITEM 1 2.585 2.585 2.38

ITEM 2 2.58 2.58 2.52

ITEM 3 2.585 2.585 2.585

ITEM 4 2.5852.38 2.38

ITEM 5 2.70 2.16 2.49

WHILE THE EVIDENCE PRESENTED MAY BE ACCEPTED AS ESTABLISHING A BONA FIDE ERROR AS ALLEGED (35 COMP. GEN. 279, 281), THE CONTROLLING QUESTION WHEN A MISTAKE IS ALLEGED AFTER AWARD IS WHETHER UNDER THE CIRCUMSTANCES THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, OF THE PROBABILITY OF ERROR. 37 COMP. GEN. 685, 686. AS THE LETTER FROM THE DIRECTOR, DIVISION OF PROCUREMENT AND SUPPLY MANAGEMENT, POINTS OUT THE STAR DENTAL PRICES ARE APPROXIMATELY 57 PERCENT LOWER THAN THE NEXT LOWEST BID, AND APPROXIMATELY 65 PERCENT LOWER THAN THE LOW BIDS ON THE THREE PRIOR PURCHASES. THESE CIRCUMSTANCES WERE, WE BELIEVE, SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF ERROR. ACCORDINGLY, WE CONCUR IN THE ADMINISTRATIVE RECOMMENDATION THAT CONTRACT NO. PH-87-68-69, AS IMPLEMENTED BY PURCHASE ORDER NO. 7330, BE REFORMED TO DELETE ITEMS 1 THROUGH 5 WITHOUT LIABILITY TO THE CONTRACTOR. CF. 44 COMP. GEN. 383, 386.