B-165267, OCT. 28, 1968

B-165267: Oct 28, 1968

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SECRETARY: REFERENCE IS MADE TO A LETTER OF SEPTEMBER 13. S-362734-68-CST-698 NOTED THAT ONLY TWO BIDS WERE RECEIVED PURSUANT TO THIS SOLICITATION AND THAT AWARD WAS TO BE MADE ON THE BASIS OF ITEM 1. AWARD WAS MADE ON THE BASIS OF ITEM 1 FOR A LABORATORY WITH ALL THE VARIOUS COMPONENTS. THE CONTRACT WAS AWARDED TO B AND K AT THE BID PRICE OF $62. THE CONTRACTOR CONTENDS THE BID INTENDED WAS $73. 621.80 AND THE CONTRACTING OFFICER HAS FOUND THAT THE EVIDENCE SUBMITTED IN SUPPORT OF THE ERROR AND THE INTENDED BID IS CLEAR AND CONVINCING. OUR ADVICE IS REQUESTED ON WHETHER THE CONTRACT PRICE MAY BE INCREASED BY THE AMOUNT OF THE ERROR. WHERE A MISTAKE IS SO APPARENT THAT THE CONTRACTING OFFICER MUST BE ASSUMED TO HAVE KNOWLEDGE OF IT.

B-165267, OCT. 28, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER OF SEPTEMBER 13, 1968, FROM MR. G. A. CAULEY, CONTRACTING OFFICER, NATIONAL BUREAU OF STANDARDS, FORWARDING FOR CONSIDERATION THE REQUEST OF B AND K INSTRUMENTS, INCORPORATED (B AND K), FOR CORRECTION OF A MISTAKE, ALLEGED AFTER CONTRACT AWARD, IN ITS BID SUBMITTED IN RESPONSE TO SOLICITATION NO. B-3051-68.

THE STATEMENT OF FACTS BY THE CONTRACTING OFFICER RESPECTING CONTRACT NO. S-362734-68-CST-698 NOTED THAT ONLY TWO BIDS WERE RECEIVED PURSUANT TO THIS SOLICITATION AND THAT AWARD WAS TO BE MADE ON THE BASIS OF ITEM 1, A COMPLETE ACOUSTICAL MOBILE LABORATORY, OR UNDER EACH OF ITEMS 2 THROUGH 5 WHICH REPRESENTED PROGRESSIVELY SMALLER PACKAGES OR OPTIONS FOR AN ACOUSTICAL MOBILE LABORATORY LESS VARIOUS COMPONENTS INCLUDED IN THE LABORATORY UNDER ITEM 1. AWARD WAS MADE ON THE BASIS OF ITEM 1 FOR A LABORATORY WITH ALL THE VARIOUS COMPONENTS. WHILE NOT REQUIRED BY THE SOLICITATION, B AND K SUBMITTED IN THEIR PROPOSAL A COST BREAKDOWN OF THE INDIVIDUAL COMPONENTS COMPRISING THE COMPLETE ACOUSTICAL MOBILE LABORATORY.

THE CONTRACT WAS AWARDED TO B AND K AT THE BID PRICE OF $62,471 ON JUNE 24, 1968. BY LETTER OF JULY 3, 1968, B AND K ADVISED THE CONTRACTING OFFICER OF SEVERAL CLERICAL ERRORS MADE IN TOTALING WORKSHEETS AND TRANSFERRING THE TOTALS TO THE BID. THE CONTRACTOR CONTENDS THE BID INTENDED WAS $73,621.80 AND THE CONTRACTING OFFICER HAS FOUND THAT THE EVIDENCE SUBMITTED IN SUPPORT OF THE ERROR AND THE INTENDED BID IS CLEAR AND CONVINCING. OUR ADVICE IS REQUESTED ON WHETHER THE CONTRACT PRICE MAY BE INCREASED BY THE AMOUNT OF THE ERROR.

GENERALLY, THE CONTRACT AS EXECUTED REPRESENTS THE FINAL UNDERSTANDING OF THE PARTIES AND DETERMINES ALL RIGHTS AND LIABILITIES THEREUNDER. THE RIGHT OF THE GOVERNMENT TO RECEIVE PERFORMANCE IN STRICT ACCORDANCE WITH THE CONTRACT TERMS MAY NOT BE WAIVED IN THE ABSENCE OF ADEQUATE CONSIDERATION, AND NO AGENT OF THE GOVERNMENT MAY WAIVE SUCH VESTED RIGHTS BECAUSE OF CONSIDERATIONS OF HARDSHIPS OR EQUITIES IN FAVOR OF THE CONTRACTOR. DAY V UNITED STATES, 245 U.S. 159.

HOWEVER, WHERE A MISTAKE IS SO APPARENT THAT THE CONTRACTING OFFICER MUST BE ASSUMED TO HAVE KNOWLEDGE OF IT, THE GOVERNMENT CANNOT TAKE ADVANTAGE OF THE CONTRACTOR BY HOLDING IT TO A CONTRACT WHICH IT HAD NO INTENTION OF MAKING. SEE 44 COMP. GEN. 383, 386. ACCORDINGLY, A DETERMINATION AS TO WHETHER THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED A MISTAKE MUST BE REACHED ON A CASE-BY-CASE BASIS IN LIGHT OF ALL THE EVIDENCE. A HARD AND FAST RULE CANNOT BE SET FORTH AS TO THE WEIGHT TO BE GIVEN DIFFERENT TYPES OF EVIDENCE OR AS TO WHAT AMOUNT OF EVIDENCE WILL IMPUTE CONSTRUCTIVE KNOWLEDGE OF A MISTAKE TO THE CONTRACTING OFFICER. IN THIS INSTANCE, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF MISTAKE AND EITHER EXAMINED THE COST BREAKDOWN SUBMITTED WITH THE BID OR REQUESTED CONFIRMATION OF THE BID.

THE GOVERNMENT ESTIMATE IN THIS CASE WAS $50,000, ONLY $12,400 LESS THAN THE BID SUBMITTED BY B AND K. THIS OFFICE WAS ADVISED THAT ESTIMATE FIGURE WAS IN FACT THE AMOUNT OF FUNDS AVAILABLE AND THAT AT THE TIME THE FIGURE WAS SUBMITTED IT WAS WITH THE KNOWLEDGE THAT IT WOULD NOT PURCHASE A COMPLETE LABORATORY. BECAUSE OF THE FUND LIMITATION, FIVE OPTIONS FOR LABORATORIES IN VARYING DEGREES OF COMPLETENESS WERE INCLUDED IN THE INVITATION WITH THE HOPE THAT THE GOVERNMENT COULD SECURE A LABORATORY UNDER ONE OF THE OPTIONS WITHIN THE FUNDS AVAILABLE. WE HAVE BEEN ADVISED FURTHER THAT WHEN B AND K'S BID OF $62,400 FOR COMPLETE LABORATORY WAS REVEALED THE REACTION IN THE BUREAU WAS TO PURCHASE THE ENTIRE UNIT AT "BARGAIN BASEMENT PRICES" AS QUICKLY AS POSSIBLE. ADDITIONAL FUNDS WERE SECURED FOR THAT PURPOSE. ADDITIONALLY, THE ONLY OTHER BID SUBMITTED FOR THE COMPLETE LABORATORY WAS IN THE AMOUNT OF $139,500 AND FOR ITEM 4, THE LEAST SOPHISTICATED OPTION BID ON BY THE OTHER BIDDER, $130,200 OR MORE THAN TWICE B AND K'S BID FOR THE COMPLETE LABORATORY.

IN VIEW OF THE DISPARITY IN THE BIDS RECEIVED AND THE INFORMATION THAT CONTRACTING PERSONNEL WERE GREATLY SURPRISED BY THE LOW BID, WE MUST CONCLUDE THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED A MISTAKE AND TAKEN SOME ACTION TO VERIFY THE LOW BID.

ACCORDINGLY, THE CONTRACT MAY BE AMENDED BY SUPPLEMENTAL AGREEMENT TO INCREASE THE PRICE TO $73,621.80. A COPY OF THIS DECISION SHOULD BE PLACED IN THE CONTRACT FILE.