B-164628, OCT. 25, 1968

B-164628: Oct 25, 1968

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800 THE COMPANY'S BID JUST BEFORE BIDS WERE OPENED. (2) FOR RECOVERY OF $234.12 WHICH WAS DEDUCTED FROM THE CONTRACT PRICE BY THE SOCIAL SECURITY ADMINISTRATION ON ACCOUNT OF LABOR EXPENSES AND DEPRECIATION CAUSED BY DAMAGE SUFFERED BY THE PROPERTY DURING THE MOVE. WE WILL CONSIDER ONLY THE CLAIM FOR $1. THE COST OF ELEVATOR SERVICE FOR SEVERAL WORKSHIFTS WOULD REPRESENT A SIGNIFICANT AMOUNT WHICH WOULD HAVE TO BE ASSUMED BY THE BIDDERS UNDER THE ABOVE PROVISIONS. AARID ADVISED US THAT THE COST OF ELEVATOR SERVICE WAS ABOUT $600. THE CONTRACTING OFFICER LEARNED THAT THE OWNER OF THE BUILDING INTO WHICH THE MOVE WAS BEING MADE HAD QUOTED DIFFERENT PRICES TO THE VARIOUS PROSPECTIVE BIDDERS FOR THE COST OF ELEVATOR SERVICE.

B-164628, OCT. 25, 1968

TO MR. SECRETARY:

WE REFER TO A LETTER DATED SEPTEMBER 9, 1968, FROM THE DIRECTOR OF GENERAL SERVICES, FORWARDING A REPORT FROM THE SOCIAL SECURITY ADMINISTRATION ON A CLAIM FOR RELIEF ASSERTED BY AARID VAN LINES, INC., UNDER CONTRACT NO. SSA 68-2185, AWARDED TO THAT COMPANY PURSUANT TO INVITATION FOR BIDS (IFB) SSA 68-15.

THE CONTRACT COVERED THE MOVING OF CERTAIN PROPERTY OF THE ADMINISTRATION FROM ONE LOCATION TO ANOTHER WITHIN THE METROPOLITAN BALTIMORE AREA. THE CLAIM OF AARID VAN LINES ORIGINALLY CONSISTED OF THREE PARTS: (1) FOR AN UPWARD REVISION OF THE CONTRACT PRICE ON THE BASIS THAT AN UNAUTHORIZED EMPLOYEE OF THE COMPANY REDUCED BY $1,800 THE COMPANY'S BID JUST BEFORE BIDS WERE OPENED; (2) FOR RECOVERY OF $234.12 WHICH WAS DEDUCTED FROM THE CONTRACT PRICE BY THE SOCIAL SECURITY ADMINISTRATION ON ACCOUNT OF LABOR EXPENSES AND DEPRECIATION CAUSED BY DAMAGE SUFFERED BY THE PROPERTY DURING THE MOVE; (3) FOR CERTAIN UNSPECIFIED LOSSES WHICH AARID SUSTAINED AS THE RESULT OF A RESCHEDULING OF MOVING DATES TO NONSUCCESSIVE WEEKENDS WHEN THE IFB PROVIDED THAT THE MOVE WOULD BE MADE ON THREE SUCCESSIVE WEEKENDS. INASMUCH AS THE COMPANY HAS ADVISED US THAT IT HAS WAIVED THE LATTER TWO SEGMENTS OF ITS CLAIM, WE WILL CONSIDER ONLY THE CLAIM FOR $1,000, REPRESENTING AN UNAUTHORIZED BID PRICE REDUCTION.

THE IFB INCLUDED THE FOLLOWING UNDER "GENERAL REQUIREMENTS" ON PAGE 6: "THE CONTRACTOR SHALL FURNISH ALL EQUIPMENT, DOLLIES, TRUCKS AND FORKLIFTS AND LABOR NECESSARY TO PERFORM ALL THE SERVICES CONTEMPLATED UNDER THIS SOLICITATION IN AN EFFICIENT MANNER.

* * * * * * * "THE CONTRACTOR SHALL FURTHER MAKE ARRANGEMENTS FOR ACCESS TO THE BUILDINGS AND THE USE OF THE FACILITIES AT THE PRESENT AND NEW LOCATIONS FOR THE REMOVAL AND RELOCATION OF THE PROPERTY.' SINCE THE MOVE WOULD REQUIRE THE USE OF ELEVATORS, THE COST OF ELEVATOR SERVICE FOR SEVERAL WORKSHIFTS WOULD REPRESENT A SIGNIFICANT AMOUNT WHICH WOULD HAVE TO BE ASSUMED BY THE BIDDERS UNDER THE ABOVE PROVISIONS. AARID ADVISED US THAT THE COST OF ELEVATOR SERVICE WAS ABOUT $600.

HOWEVER, ON THE MORNING OF THE DAY SET FOR OPENING OF BIDS, THE CONTRACTING OFFICER LEARNED THAT THE OWNER OF THE BUILDING INTO WHICH THE MOVE WAS BEING MADE HAD QUOTED DIFFERENT PRICES TO THE VARIOUS PROSPECTIVE BIDDERS FOR THE COST OF ELEVATOR SERVICE. TO ASSURE THAT ONE BIDDER WOULD NOT BE PLACED IN A MORE FAVORABLE POSITION OVER OTHER BIDDERS, THE CONTRACTING OFFICER, IN THE INTEREST OF MAINTAINING THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM, DETERMINED THAT THE COST OF ELEVATOR SERVICE SHOULD BE EXCLUDED FROM THE BID PRICES. PRIOR TO THE OPENING OF BIDS, ALL BIDDERS IN ATTENDANCE WERE ORALLY INFORMED BY THE CONTRACTING OFFICER OF THIS DECISION AND WERE GIVEN TIME TO MAKE WHATEVER BID DEDUCTIONS WERE DESIRED.

UPON OPENING OF BIDS, THE FOLLOWING EIGHT BIDS WERE RECEIVED AND IT WAS NOTED THAT ONLY THREE BIDDERS REDUCED THEIR PRICES TO REFLECT SAVINGS TO BE REALIZED FROM THE EXCLUSION OF ELEVATOR SERVICE COSTS: AARID VAN LINE $13,594 (LESS $1,800) BALTIMORE SECURITY $14,774 (LESS $350) ADVANCE STORAGE $15,000 FIDELITY STORAGE $17,635 DAVIDSON TRANSFER $19,450 J. H. HOFFMAN $21,375 B. VON PARIS$24,995 KANE TRANSFER $31,680 (LESS $1,000) IT SHOULD BE NOTED THAT, EVEN WITHOUT THE $1,800 REDUCTION, AARID WOULD HAVE STILL REMAINED THE LOWEST BIDDER. ALSO, IT APPEARS THAT WHILE AARID REDUCED ITS BID BY 13.24 PERCENT, KANE (THE HIGHEST BIDDER) REDUCED ITS BID BY ONLY 3.16 PERCENT AND BALTIMORE SECURITY (THE SECOND LOW BIDDER) REDUCED ITS BID BY ONLY 2.37 PERCENT.

ON THE DAY FOLLOWING BID OPENING, AARID ALLEGED THAT ITS BID PRICE REDUCTION WAS IN ERROR AND UNAUTHORIZED AND THAT IT INTENDED TO REDUCE ITS BID BY ONLY $800 RATHER THAN BY $1,800. NOTWITHSTANDING THE ALLEGATION OF ERROR, AWARD WAS MADE TO AARID ON OCTOBER 20, 1967, IN THE AMOUNT OF $11,794. THE CONTRACT HAS BEEN FULLY PERFORMED.

THE ACCEPTANCE OF A BID WITH KNOWLEDGE OR SUSPICION OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT AND RESCISSION OF THE CONTRACT IS ALLOWED. SEE 37 COMP. GEN. 706 AND COURT CASES CITED THEREIN. IF, WHEN THE CONTRACT IS RESCINDED, THE INTENDED GOODS HAVE BEEN DELIVERED, RESTITUTION IS MADE ON THE BASIS OF THE REASONABLE VALUE OF THE FULL PERFORMANCE, LIMITED TO THE NEXT LOWEST CORRECT BID. C.N. MONROE MANUFACTURING COMPANY V UNITED STATES, 143 F.SUPP. 449 (E.D. MICH. 1956); M. L. SHEPARD V UNITED STATES, 95 CT. CL. 407 (1942); 37 COMP. GEN. 685.

WHILE WE ARE INFORMED THAT FUTURE AMENDMENTS TO INVITATIONS FOR BIDS WILL BE MADE IN STRICT ACCORDANCE WITH FPR SEC. 1-2.207, WE BELIEVE THAT THE CONTRACTING OFFICER'S FAILURE TO FOLLOW THE REGULATION CONTRIBUTED IN SOME DEGREE TO THE CONTRACTOR'S ERROR IN OFFERING AN UNREASONABLE PRICE REDUCTION. HAD SUFFICIENT TIME BEEN ALLOWED TO CONSIDER THE DOLLAR IMPACT IN ELIMINATING THE COST OF ELEVATOR SERVICE, REALISTIC BID MODIFICATIONS MAY HAVE BEEN OFFERED BY A MORE REPRESENTATIVE NUMBER OF BIDDERS.

ACCORDINGLY, SINCE THE ADDITIONAL AMOUNT OF $1,000 CLAIMED BY AARID WOULD NOT RESULT IN A PAYMENT IN EXCESS OF THE NEXT LOWEST BID, PAYMENT MAY BE MADE IN THAT AMOUNT IN FULL SETTLEMENT OF AARID'S CLAIMS UNDER THE CONTRACT. A COPY OF THIS DECISION SHOULD BE ATTACHED TO THE VOUCHER WHEREUNDER PAYMENT IS EFFECTED.