B-165405, OCT. 24, 1968

B-165405: Oct 24, 1968

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TRAHERN: REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 9. FIVE BIDS WERE RECEIVED AND OPENED ON AUGUST 22. THE LOWEST AGGREGATE BID ON ITEMS I AND II WAS SUBMITTED BY THE CRAWFORD PLASTICS CORPORATION. IT IS REPORTED THAT BECAUSE THERE WAS A SUBSTANTIAL DIFFERENCE BETWEEN THE BID OF THE CRAWFORD PLASTICS CORPORATION AND THE FOUR OTHER BIDS AND THE GOVERNMENT ESTIMATE. THE CORPORATION WAS REQUESTED BY TELEGRAM DATED AUGUST 23. WE HAVE FOUND TWO SIGNIFICANT ERRORS. ON ITEM 1 WE WERE FORTUNATE ENOUGH TO HAVE RECEIVED A SAMPLE PRIOR TO THE MAILING OF OUR BID AND WE WEIGHED IT AND FOUND IT TO WEIGH 7-1/4 LBS. OUR BID PRICE WOULD HAVE BEEN .168 EACH HIGHER. "ONE OTHER ERROR DID OCCUR IN OUR CALCULATIONS IN ALL ITEMS IN THAT THE PERSON WHO PREPARED THE BID WAS OUR VICE-PRESIDENT IN CHARGE OF MANUFACTURING WHO IS NOT ORIENTED REGARDING FREIGHT COSTS.

B-165405, OCT. 24, 1968

TO MR. TRAHERN:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 9, 1968, WITH ENCLOSURES, REQUESTING A DECISION CONCERNING THE BID OF THE CRAWFORD PLASTICS CORPORATION UNDER SOLICITATION NO. 1070, ISSUED BY THE PROCUREMENT DIVISION, BUREAU OF FACILITIES, POST OFFICE DEPARTMENT.

THE SOLICITATION REQUESTED BIDS FOR FURNISHING SPECIFIED QUANTITIES OF PLASTIC TRAYS, ITEMS I AND II. FIVE BIDS WERE RECEIVED AND OPENED ON AUGUST 22, 1968. THE LOWEST AGGREGATE BID ON ITEMS I AND II WAS SUBMITTED BY THE CRAWFORD PLASTICS CORPORATION. IT IS REPORTED THAT BECAUSE THERE WAS A SUBSTANTIAL DIFFERENCE BETWEEN THE BID OF THE CRAWFORD PLASTICS CORPORATION AND THE FOUR OTHER BIDS AND THE GOVERNMENT ESTIMATE, THE CORPORATION WAS REQUESTED BY TELEGRAM DATED AUGUST 23, 1968, TO VERIFY ITS BID PRICES. IN A LETTER DATED SEPTEMBER 4, 1968, THE CRAWFORD PLASTICS CORPORATION ADVISED AS FOLLOWS: "REGARDING YOUR REQUEST THAT WE VERIFY THE ACCURACY OF OUR BID, WE HAVE FOUND TWO SIGNIFICANT ERRORS. ERROR ONE REGARDS OUR ESTIMATE OF WEIGHT. ON ITEM 1 WE WERE FORTUNATE ENOUGH TO HAVE RECEIVED A SAMPLE PRIOR TO THE MAILING OF OUR BID AND WE WEIGHED IT AND FOUND IT TO WEIGH 7-1/4 LBS. WHEN WE WENT TO CALCULATE THE WEIGHT ON ITEMS 2 AND 3, WE TRIED TO RAISE OR LOWER THE WEIGHTS USING THE THREE BASIC DIMENSIONS FOR ITEMS 2 AND 3 IN PROPORTION TO THE WEIGHT OF ITEM 1. HEREIN LAYS OUR ERROR BECAUSE THE THREE BASIC DIMENSIONS, LENGTH, WIDTH AND HEIGHT FAILED TO INCLUDE THE OUTSIDE RIM. AS A RESULT OF THIS WE CALCULATED THE WEIGHT OF ITEM 2 AS 9.32 LBS. EACH RATHER THAN 9.82 LBS. EACH. HAD THIS WEIGHT FOR ITEM 2 BEEN CALCULATED PROPERLY, OUR BID PRICE WOULD HAVE BEEN .168 EACH HIGHER. I AM ENCLOSING COPIES OF OUR VARIOUS WORK SHEETS TO VERIFY THIS MISTAKE AS WELL AS COPIES OF OUR REVISED WEIGHT ESTIMATIONS. "ONE OTHER ERROR DID OCCUR IN OUR CALCULATIONS IN ALL ITEMS IN THAT THE PERSON WHO PREPARED THE BID WAS OUR VICE-PRESIDENT IN CHARGE OF MANUFACTURING WHO IS NOT ORIENTED REGARDING FREIGHT COSTS. WHEN HE PREPARED THE BID HE WAS TOLD TO CALCULATE .04 CENTS PER LB. FOR FREIGHT. HOWEVER, WHEN HE PREPARED THE BID HE INCLUDED .04 CENTS PER ITEM RATHER THAN PER LB. MR. STAUBLE'S ORIGINAL WORK SHEETS ARE ALSO INCLUDED TO PROVE THIS. THEREFORE, IN VIEW OF THE ABOVE IT IS RESPECTFULLY REQUESTED THAT WE BE ALLOWED TO RAISE OUR PRICE FOR ITEM 1 FROM $4.91 EACH TO $5.19 EACH. ITEM 1 WITH THE ESCORT MEMORY TABS TO BE RAISED FROM $5.41 EACH TO $5.69 EACH. "ITEM 2 FROM $5.44 EACH TO $6.008 EACH. THIS RESULTS FROM AN ADDITION OF .168 CENTS EACH FOR THE MATERIAL ERROR AND A .40 CENTS EACH FOR THE FREIGHT ERROR. "SHOULD THE POST OFFICE CHOOSE NOT TO ALLOW US THE ABOVE INCREASES, WE ARE FULLY PREPARED TO PERFORM THE CONTRACT AT OUR ORIGINALLY QUOTED PRICES. IN NO EVENT SHOULD THIS LETTER BE CONSTRUED AS A BASIS FOR OUR NOT BEING AWARDED THE CONTRACT.' IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED THE WORKSHEETS UPON WHICH ITS BID PRICES WERE COMPUTED.

AFTER CONSIDERATION OF THE DOCUMENTARY EVIDENCE SUBMITTED IN SUPPORT OF THE ALLEGED ERROR, THE ACTING CHIEF, SUPPLY BRANCH, UNDER DATE OF SEPTEMBER 10, 1968, MADE THE FOLLOWING DETERMINATION REGARDING CRAWFORD'S REQUEST FOR CORRECTION OF ITS BID: "FINDINGS AND DETERMINATIONS UNDER FPR 1-2.406-3 (A) (2) WITH RESPECT TO ALLEGATION OF ERROR IN BID OF CRAWFORD PLASTICS CORP. ON ITEMS I AND II OF SOLICITATION NO. 1070 "FACTS "BIDS RECEIVED AS A RESULT OF SOLICITATION NO. 1070 FOR PLASTIC TRAYS, P.O. ITEMS 1255 AND 1256 UNDER ITEM I AND P.O. ITEM 1259 UNDER ITEM II, OPENED ON AUGUST 22, 1968, WERE:

UNIT TOTAL TOTAL PRICE

"BIDDER PRICE PRICE LESS DISCOUNT CRAWFORD PLASTICS CORP.

I. $4.91

5.41 $201,400.00 $201,400.00

CORRECTED PRICE 5.19

5.69 $212,600.00 $212,600.00

II. $5.44 $ 54,400.00 $ 54,400.00

CORRECTED PRICE $6.008 $ 60,080.00 $ 60,080.00 HOLIDAY MFG. CO.

I. $5.2255

5.8132 $214,897.00 $213,822.52

II. $6.4878 $ 64,878.00 $ 64,553.61 PHILLIPS PRODUCTS CO.

I. $5.46

5.85 $222,300.00 $222,300.00

II. $6.45 $ 64,500.00 $ 64,500.00 GENERAL TIRE AND RUBBER CO.

I. $5.90

7.49 $251,900.00 $251,900.00

II. $8.19 $ 81,900.00 $ 81,900.00 U.S.S. CHEMICALS

I. NO BID

II. $8.27 $ 82,700.00 $ 82,700.00 "THE GOVERNMENT'S ESTIMATE OF $280,000 FOR ITEM I AND $70,000 FOR ITEM II WAS BASED ON PRICES PAID IN THE INITIAL, AND ONLY, PROCUREMENT OF THESE SPECIAL TRAYS SEVERAL YEARS AGO. "DUE TO THE VARIANCE BETWEEN THE BID OF CRAWFORD PLASTICS CORP., OTHER BIDS RECEIVED, AND THE GOVERNMENT'S ESTIMATE, AN ERROR WAS SUSPECTED. A WIRE OF AUGUST 23, WE REQUESTED THE FIRM TO VERIFY ITS CALCULATIONS AND CONFIRM ITS BID ON ITEMS I AND II. THE FIRM IN ITS LETTER OF SEPTEMBER 4 CLAIMED AN ERROR IN CALCULATING THE WEIGHT OF THE TRAYS UNDER ITEM II AND AN ERROR IN THE COST OF FREIGHT ON BOTH ITEM I AND II. WORKSHEETS WERE FURNISHED TO SUBSTANTIATE THE CLAIMS OF ERROR. THE FIRM STATES IN ITS LETTER OF SEPTEMBER 4, THAT IT DESIRES AWARD OF CONTRACT AT THE PRICE QUOTED ON ITS BID, IN THE EVENT THE DEPARTMENT CANNOT PERMIT CORRECTION OF THE BID. "TIME OF ACCEPTANCE ON BIDS EXPIRES OCTOBER 21, 1968. "FINDINGS OTHER BIDS RECEIVED, THE GOVERNMENT'S ESTIMATE, AND THE EVIDENCE SUBMITTED BY CRAWFORD PLASTICS CORP. REASONABLY SUPPORT THE CLAIM OF ERROR BUT THE EVIDENCE IS NOT CLEAR AND CONVINCING AS TO THE INTENDED BID. "RECOMMENDATION IT IS RECOMMENDED THAT CRAWFORD PLASTICS CORP. NOT BE PERMITTED TO CORRECT ITS BID ON ITEMS I AND II, AND THAT ITS BID NOT BE CONSIDERED FOR AWARD ON THOSE ITEMS.' ON SEPTEMBER 16, 1968, YOU CONCURRED IN THE ABOVE RECOMMENDATION. IT APPEARS THAT THE RECOMMENDATION AND CONCURRENCE ARE BASED ON DECISIONS OF OUR OFFICE REPORTED IN 37 COMP. GEN. 579; ID. 851. IT IS REPORTED THAT THE CONTRACTING OFFICER CONTEMPLATES DISREGARDING THE BID OF CRAWFORD ON ITEMS I AND II AND AWARDING THOSE ITEMS TO TWO OTHER BIDDERS.

IN A TELEGRAM DATED OCTOBER 9, 1968, TO OUR OFFICE, THE CRAWFORD PLASTICS CORPORATION PROTESTED THE PROPOSED AWARD OF ITEMS I AND II TO ANY OTHER BIDDER AND AGAINST ANY POSSIBLE CANCELLATION OF THE SOLICITATION. LETTER DATED OCTOBER 14, 1968, THE CORPORATION'S ATTORNEY SUBMITTED A BRIEF IN SUPPORT OF THE CORPORATION'S REQUEST THAT ITS BID PRICES FOR ITEMS I AND II BE CORRECTED AS SHOWN ON THE ABOVE-QUOTED FINDINGS AND DETERMINATION AND THAT, IF CORRECTION IS NOT PERMITTED, AWARD BE MADE TO IT ON THE BASIS OF ITS SUBMITTED BID PRICES. WE HAVE CONSIDERED THE AUTHORITIES CITED IN THE BRIEF IN SUPPORT OF CRAWFORD'S REQUEST FOR BID CORRECTION, BUT UNDER THE FACTS OF THIS CASE WE CANNOT APPLY THE RATIONALE OF THOSE AUTHORITIES TO ALLOW CORRECTION OF THE CRAWFORD BID.

UNDER THE AUTHORITY OF FEDERAL PROCUREMENT REGULATIONS (FPR) 1 2.406-3 (A) (2) IT WAS DETERMINED THAT CRAWFORD HAD CLEARLY ESTABLISHED THE MAKING OF A MISTAKE IN THE SUBMISSION OF ITS BID BUT HAD NOT PRESENTED CONVINCING EVIDENCE OF THE BID ACTUALLY INTENDED AND WAS ENTITLED, THEREFORE, ONLY TO WITHDRAWAL OF ITS BID BUT NOT TO CORRECTION OF THE ERRORS.

ORDINARILY A BID SUBMITTED IN RESPONSE TO AN INVITATION ISSUED BY AN AGENCY OF THE GOVERNMENT MAY NOT BE WITHDRAWN OR MODIFIED UNTIL EXPIRATION OF THE TIME SPECIFIED IN THE INVITATION FOR ACCEPTANCE. REFINING ASSOCIATES, INC. V UNITED STATES, 124 CT. CL. 115; UNITED STATES V LIPMAN, 122 F.SUPP. 284. A BIDDER WHO, AFTER OPENING AND PRIOR TO AWARD, ALLEGES A MISTAKE IN BID AND ADDUCES CLEAR AND CONVINCING EVIDENCE IN SUPPORT THEREOF, MAY, IF SUCH EVIDENCE ESTABLISHES THE MAKING OF A BONA FIDE ERROR, BE ALLOWED TO WITHDRAW. UNITED STATES V LIPMAN, SUPRA, P. 288. AGREE THAT THE RECORD BEFORE US ESTABLISHES THE EXISTENCE OF AN HONEST MISTAKE ON THE PART OF THE CORPORATION.

WE AGREE ALSO THAT THE RECORD DOES NOT SUPPORT A DETERMINATION TO ALLOW THE BIDDER TO CORRECT ITS BID TO ACCORD WITH THE REVISED AMOUNTS SHOWN IN ITS LETTER OF SEPTEMBER 4, 1968. WE HAVE HELD THE DEGREE OF PROOF REQUIRED TO JUSTIFY WITHDRAWAL OF A BID BEFORE AWARD TO BE IN NO WAY COMPARABLE TO THAT NECESSARY TO ALLOW CORRECTION OF AN ERRONEOUS BID. COMP. GEN. 441. AS IN NOT THE CASE HERE, THE EVIDENCE OF THE BID ORIGINALLY INTENDED MUST ITSELF HAVE BEEN IN EXISTENCE PRIOR TO BID OPENING IN ORDER TO ENTITLE THE BIDDER TO CORRECTION. B-153651, APRIL 2, 1964. FURTHERMORE, THE RULE PERMITTING A BID TO BE CORRECTED UPON THE SUBMISSION OF EVIDENCE ESTABLISHING THAT THE BIDDER INTENDED TO BID AN AMOUNT OTHER THAN THE AMOUNT SET FORTH ON THE FACE OF ITS BID DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE A NEGLIGENTLY FORMULATED BID TO INCLUDE FACTORS WHICH WERE NOT IN MIND WHEN THE BID WAS PREPARED AND SUBMITTED. 41 COMP. GEN. 289; 17 ID. 575, 577.

THE RECORD INDICATES THAT IN COMPUTING ITS BID PRICES FOR ITEMS I AND II, CRAWFORD MADE TWO ERRORS IN ITS BID. THE FIRST ERROR WAS MADE IN CALCULATING THE WEIGHT OF PLASTIC RECEPTACLES REQUIRED UNDER ITEM II AND THE SECOND ERROR OCCURRED IN COMPUTING THE COST OF THE FREIGHT FOR BOTH ITEMS I AND II ON THESE RECEPTACLES. IN SUPPORT OF ITS REQUEST FOR AN INCREASE IN THE CONTRACT PRICE TO COVER THE ERROR IN CALCULATING THE WEIGHT, THE CORPORATION'S ATTORNEY HAS CITED TWO DECISIONS OF OUR OFFICE REPORTED IN 40 COMP. GEN. 321 AND 41 ID. 160. IT IS OUR OPINION THAT THE DECISIONS REPORTED IN 40 COMP. GEN. 321 AND 41 ID. 160 ARE NOT APPLICABLE TO THE PRESENT CASE BECAUSE THE MISTAKES INVOLVED IN THOSE DECISIONS WERE EITHER OBVIOUS CLERICAL ERRORS OR OTHER ERRORS CLEARLY FOR CORRECTION UNDER THE PROCUREMENT REGULATIONS. HERE, THE MISTAKES ARE ERRORS OF OMISSION, THAT IS, FAILURE TO CONSIDER AND INCLUDE CERTAIN COST ITEMS RELATING TO WEIGHT AND FREIGHT.

WITH SPECIAL REFERENCE TO THE FREIGHT COSTS, OUR DECISIONS OF OCTOBER 11, 1962, B-150043, AND MAY 4, 1966, B-158730, ARE CITED AS AUTHORITY FOR CORRECTION. IN B-158730 THE BIDDER'S WORKSHEETS ESTABLISHED THE BIDDER'S INTENDED PRICE; WHEREAS, IN THE PRESENT CASE IT IS NECESSARY TO MAKE CERTAIN ASSUMPTIONS AND COMPUTATIONS IN ORDER TO ARRIVE AT CRAWFORD'S ALLEGED INTENDED BID PRICE. CONCERNING B-150043, IT MIGHT APPEAR SUPERFICIALLY THAT THE COMMON DENOMINATOR IN THAT CASE AND THE ONE HERE -- COMMON INDUSTRY PRACTICE -- WOULD SUFFICE TO ESTABLISH THE INTENDED BID PRICE. BUT IN THE EARLIER CASE, THE FACT OF COMMON INDUSTRIAL PRACTICE WAS CONCURRED IN BY THE CONTRACTING OFFICER. SUCH IS NOT THE CASE HERE SINCE IT HAS BEEN AUTHORITATIVELY DETERMINED THAT ,THE EVIDENCE IS NOT CLEAR AND CONVINCING AS TO THE INTENDED BID.' SEE GENERALLY FPR 1-2.406- 3.

THERE IS NEXT FOR CONSIDERATION THE QUESTION WHETHER ONCE HAVING ALLEGED AND ESTABLISHED THAT AN ERROR HAS BEEN MADE IN ITS BID, AND PERMISSION HAS BEEN GRANTED TO WITHDRAW BUT NOT CORRECT THE BID,CRAWFORD MAY UPON ITS REQUEST RECEIVE AWARD ON THE BASIS OF ITS ORIGINAL BID. YOUR GENERAL COUNSEL HAS STATED IN HIS MEMORANDUM OF SEPTEMBER 23, 1968, TO YOU, THAT IT IS HIS OPINION THAT THE DECISIONS OF OUR OFFICE REPORTED IN 37 COMP. GEN. 579 AND ID. 851 PRECLUDE THE CONTRACTING OFFICER FROM KAING AN AWARD TO CRAWFORD ON THE BASIS OF ITS ORIGINAL BID PRICES.

WE HELD IN 37 COMP. GEN. 579 THAT TO PERMIT CONSIDERATION OF A LOW BID SUBMITTED BY A BIDDER WHO, AFTER THE OPENING OF THE BIDS, ALLEGED AN ERROR IN HIS BID BUT WHO LATER REQUESTED THAT THE ALLEGATION OF ERROR BE WITHDRAWN WOULD BE TANTAMOUNT TO ALLOWING THE OSTENSIBLE LOW BIDDER TO ELECT, AFTER BID OPENING, WHETHER TO STAND ON THE BID, OR TO WITHDRAW IT ON GROUNDS OF MISTAKE, DEPENDING UPON WHICH COURSE OF ACTION APPEARED TO BE IN ITS BEST INTEREST. IN CASES WHERE SUCH A BID, IF CORRECTED, WOULD NO LONGER BE THE LOWEST BID, THIS OBVIOUSLY WOULD NOT BE FAIR TO THE OTHER BIDDERS, WHOSE BIDS HAD BEEN DISCLOSED, AND IT WOULD BE DETRIMENTAL TO THE PURPOSES SOUGHT TO BE ACCOMPLISHED BY THE STATUTES RELATING TO COMPETITIVE BIDDING. THE FOREGOING PRINCIPLES WERE ALSO APPLIED IN OUR DECISION OF JUNE 25, 1958, B 136508, REPORTED IN 37 COMP. GEN. 851, IN WHICH WE HELD THAT A LOW BIDDER MAY NOT FOREGO PART OF ITS CLAIM OF ERROR IN ORDER TO REMAIN THE LOW BIDDER.

HOWEVER, THESE DECISIONS ARE NOT FOR APPLICATION TO THE PRESENT CASE SINCE CRAWFORD IS NOT ATTEMPTING TO FOREGO A CLAIM OF ERROR IN ORDER TO REMAIN THE LOW BIDDER, AS WAS THE SITUATION IN THE CITED DECISIONS. EVEN IF THE BID ERRORS WERE CORRECTED, CRAWFORD WOULD STILL REMAIN THE LOW BIDDER. IN THIS REGARD, FPR 1-2.406-3 (D) (5) PROVIDES AS FOLLOWS: "/5) WHERE THE BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE, OR THERE ARE OTHER INDICATIONS OF ERROR SO CLEAR, AS REASONABLY TO JUSTIFY THE CONCLUSION THAT ACCEPTANCE OF THE BID WOULD BE UNFAIR TO THE BIDDER OR TO OTHER BONA FIDE BIDDERS, IN WHICH CASE IT MAY BE REJECTED * * *.'

IN 42 COMP. GEN. 723, WE HELD THAT, ALTHOUGH CORRECTION OF A LOW BID COULD NOT BE PERMITTED BECAUSE THE AMOUNT OF THE INTENDED BID WAS NOT ESTABLISHED WITH THE CERTAINTY REQUIRED BY THE RULES APPLICABLE TO CORRECTION OF MISTAKES IN BIDS, THE ACCEPTANCE OF SUCH A LOW BID WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS IF THE EVIDENCE CLEARLY INDICATED THAT THE BID WOULD HAVE BEEN LOWEST EVEN IF CORRECTED. SEE, ALSO, B 155432, DECEMBER 1, 1964. ACCORDINGLY, THE BID OF CRAWFORD PLASTICS CORPORATION MAY BE CONSIDERED FOR AWARD AT ITS ORIGINAL BID PRICES FOR ITEMS I AND II, IF PROPER IN OTHER RESPECTS.