B-165434, DEC. 2, 1968

B-165434: Dec 2, 1968

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INCORPORATED: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 11. BIDS WERE OPENED AT 3:00 P.M. SIX BIDS WERE RECEIVED. YOU RECEIVED A TELEPHONE CALL FROM A SUPPLIER ALLEGING THAT AN ORAL QUOTATION PREVIOUSLY MADE TO YOU OF $400 PER CORSET WAS IN ERROR AND THAT THE QUOTATION SHOULD HAVE BEEN $700 PER UNIT. (CONFIRMATION IN WRITING FROM THE SUPPLIER WAS RECEIVED ON SEPTEMBER 10. THIS TELEGRAM WAS TRANSMITTED FROM FAIRFIELD. WAS RECEIVED AT THE NAVAL COMMUNICATION CENTER AT 5:40 P.M. HE WOULD HAVE SUSPECTED A MISTAKE IN THE BIDDER'S PRICE. IT IS HEREBY DETERMINED THAT THERE IS CLEAR AND CONVINCING EVIDENCE AS TO THE EXISTENCE OF A MISTAKE. SINCE THE BIDDER WAS NOT ABLE TO EFFECTIVELY MODIFY ITS INTENDED BID UNDER THE TERMS OF INVITATION REGARDING LATE MODIFICATIONS.

B-165434, DEC. 2, 1968

TO GENERAL MACHINE AND INSTRUMENT COMPANY, INCORPORATED:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 11, 1968, WITH ENCLOSURES, PROTESTING THE AWARD OF CONTRACT UNDER INVITATION FOR BIDS NO. N00174-69-B-0046, ISSUED BY THE NAVAL ORDNANCE STATION, INDIAN HEAD, MARYLAND, ON AUGUST 6, 1968, FOR THE FURNISHING OF 40 GAS GENERATOR MOLDS.

BIDS WERE OPENED AT 3:00 P.M. (EASTERN DAYLIGHT SAVING TIME) ON SEPTEMBER 6, 1968, AS SCHEDULED. SIX BIDS WERE RECEIVED, INCLUDING YOUR LOW TOTAL BID OF $98,745, AND THE TWO NEXT LOWEST BIDS OF $119,132 AND $120,132.

YOU STATE THAT AT APPROXIMATELY 1:30 P.M. ON SEPTEMBER 6, 1968, YOU RECEIVED A TELEPHONE CALL FROM A SUPPLIER ALLEGING THAT AN ORAL QUOTATION PREVIOUSLY MADE TO YOU OF $400 PER CORSET WAS IN ERROR AND THAT THE QUOTATION SHOULD HAVE BEEN $700 PER UNIT. (CONFIRMATION IN WRITING FROM THE SUPPLIER WAS RECEIVED ON SEPTEMBER 10, 1968.) YOU IMMEDIATELY ATTEMPTED TO NOTIFY THE CONTRACTING OFFICER BY TWX; HOWEVER, THE INSTALLATION NOT HAVING THIS FACILITY, YOU SENT A TELEGRAPHIC MODIFICATION READING IN PART AS FOLLOWS: "REQUEST YOU CHANGE BID PRICE DUE TO ERROR IN CALCULATION. REVISE COST BY ADDING $300 PER UNIT TO QUOTED COST * * *". THIS TELEGRAM WAS TRANSMITTED FROM FAIRFIELD, NEW JERSEY, AT 2:42 P.M., SEPTEMBER 6, 1968, AND WAS RECEIVED AT THE NAVAL COMMUNICATION CENTER AT 5:40 P.M., THE SAME DAY, TOO LATE TO BE CONSIDERED. BY LETTER DATED SEPTEMBER 10, 1968, YOU ALLEGED A MISTAKE IN BID AND REQUESTED CORRECTION TO ALLOW THE INCREASED AMOUNT.

AFTER CONSIDERATION OF THE DOCUMENTARY EVIDENCE SUBMITTED IN SUPPORT OF THE ALLEGED ERROR, THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, UNDER DATE OF SEPTEMBER 25, 1968, MADE THE FOLLOWING DETERMINATION (QUOTED IN PERTINENT PART) REGARDING YOUR FIRM'S REQUEST FOR CORRECTION: "3. THE CONTRACTING OFFICER STATES BUT FOR THE RECEIPT OF THE LATE MODIFICATION, HE WOULD HAVE SUSPECTED A MISTAKE IN THE BIDDER'S PRICE, AND RECOMMENDED THAT THE BID BE CORRECTED.

DETERMINATION BASED ON THE FOREGOING FACTS AND EVIDENCE, IT IS HEREBY DETERMINED THAT THERE IS CLEAR AND CONVINCING EVIDENCE AS TO THE EXISTENCE OF A MISTAKE. HOWEVER, SINCE THE BIDDER WAS NOT ABLE TO EFFECTIVELY MODIFY ITS INTENDED BID UNDER THE TERMS OF INVITATION REGARDING LATE MODIFICATIONS, IT WOULD BE PREJUDICIAL TO OTHER BONA FIDE BIDDERS AND INCONSISTENT WITH THE MODIFICATION TERMS OF THE INVITATION TO ALLOW THE BIDDER TO CORRECT ITS BID. ACCORDINGLY, THE BID SHALL BE DISREGARDED.'

THE ABOVE-QUOTED DETERMINATION WAS MADE PURSUANT TO THE PROVISIONS OF PARAGRAPH 2-406.3 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR). SAID PARAGRAPH PROVIDES THAT IN THE CASE OF OTHER THAN APPARENT CLERICAL MISTAKES ALLEGED AFTER OPENING OF BIDS AND PRIOR TO AWARD, THE DEPARTMENTS MAY MAKE THE FOLLOWING ADMINISTRATIVE DETERMINATION: "/3) WHERE THE BIDDER REQUESTS PERMISSION TO CORRECT A MISTAKE IN HIS BID AND CLEAR AND CONVINCING EVIDENCE ESTABLISHES BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED, A DETERMINATION PERMITTING THE BIDDER TO CORRECT THE MISTAKE MAY BE MADE; PROVIDED THAT, IN THE EVENT SUCH CORRECTION WOULD RESULT IN DISPLACING ONE OR MORE LOWER BIDS, THE DETERMINATION SHALL NOT BE MADE UNLESS THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED ARE ASCERTAINABLE SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. IF THE EVIDENCE IS CLEAR AND CONVINCING ONLY AS TO THE MISTAKE, BUT NOT AS TO THE INTENDED BID, A DETERMINATION PERMITTING THE BIDDER TO WITHDRAW HIS BID MAY BE MADE.'

IN YOUR LETTER OF PROTEST YOU CONTEND THAT ALL REASONABLE AND POSSIBLE EFFORT WAS MADE TO NOTIFY THE NAVY OF THE ERROR AND CORRECTION PRIOR TO BID OPENING TIME AS EVIDENCED BY YOUR DOCUMENTATION. YOU ALSO POINT OUT THAT YOU WERE LOW BIDDER WITH OR WITHOUT THE MODIFICATION. THEREFORE, YOU CONTEND THAT THE CONTRACT SHOULD BE AWARDED TO YOUR FIRM. SINCE YOUR TELEGRAM WAS NOT RECEIVED ON TIME TO BE CONSIDERED AS A BID MODIFICATION, THE MATTER SHOULD BE CONSIDERED UNDER THE RULES APPLICABLE TO MISTAKES IN BIDS.

IN TREATING YOUR PROTEST AS A MISTAKE IN BID CASE, THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND, PURSUANT TO AUTHORITY DELEGATED TO HIM UNDER ASPR 2-406.3 (B) (2) HAS CONCLUDED THAT THE INFORMATION SUBMITTED IN SUPPORT OF YOUR FIRM'S REQUEST FOR BID CORRECTION CONSTITUTED CLEAR AND CONVINCING EVIDENCE OF A MISTAKE IN BID. HOWEVER, THE JUSTIFICATION FOR REJECTING YOUR BID IS THAT SINCE YOUR TELEGRAM WAS RECEIVED TOO LATE TO BE CONSIDERED AS A MODIFICATION, ANY CORRECTION ON THE BASIS OF MISTAKE IN BID WOULD BE PREJUDICIAL TO OTHER BIDDERS AND INCONSISTENT WITH THE TERMS OF THE INVITATION.

WE DO NOT AGREE THAT BECAUSE A TELEGRAM WAS RECEIVED TOO LATE TO BE CONSIDERED AS A BID MODIFICATION IT CANNOT BE CONSIDERED AS EVIDENCE IN ESTABLISHING THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. THE WEIGHT TO BE GIVEN EVIDENCE SUBMITTED IN SUPPORT OF A REQUESTED CORRECTION OF A BID PRIMARILY IS A QUESTION OF FACT TO BE CONSIDERED BY THE EVALUATOR AUTHORIZED BY THE REGULATIONS TO MAKE SUCH DETERMINATIONS, IN THIS CASE THE DEPUTY COMMANDER, PURCHASING, NAVAL SUPPLY SYSTEMS COMMAND. FROM THE RECORD, THE LATE MODIFICATION OF PRICE SENT PRIOR TO BID OPENING SHOULD HAVE BEEN EVALUATED AS THE BEST AVAILABLE EVIDENCE TO SUPPORT THE QUANTUM OF PROOF NEEDED TO SHOW WHAT THE BIDDER STATED, PRIOR TO AWARD, WAS THE INTENDED BID.

THE GENERAL RULE IS THAT A BIDDER MAY NOT CHANGE HIS BID AFTER THE DATE OF OPENING, TO THE PREJUDICE OF OTHER BIDDERS. NEVERTHELESS, THE STATUTES REQUIRING ADVERTISING FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IT HAS CONSISTENTLY BEEN HELD, THEREFORE, THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER OPENING OF BIDS AND THERE IS PRESENTED CONVINCING EVIDENCE SHOWING THAT A MISTAKE WAS MADE, IN WHAT IT CONSISTS, HOW IT OCCURRED, AND WHAT THE BID WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF IT, PROVIDED, OF COURSE, CORRECTION WOULD NOT RESULT IN EXCEEDING THE NEXT LOW CORRECT BID.

IN THE INSTANT CASE, WE THINK THE EVALUATOR FAILED TO APPLY THE TESTS ENUNCIATED IN THE GENERAL RULE AND REQUIRED BY THE REGULATIONS, SPECIFICALLY THE DETERMINATION AND APPLICATION OF EVIDENCE SUBMITTED TO ESTABLISH AN INTENDED BID. HOWEVER, WE HAVE BEEN ADVISED THAT THE CONTRACT IS NOW 65 PERCENT COMPLETE AND IT DOES NOT APPEAR TO BE IN THE GOVERNMENT'S INTEREST TO CANCEL THE CONTRACT DUE TO THE URGENCY OF THE PROCUREMENT. NEVERTHELESS, WE ARE BRINGING THIS MATTER TO THE ATTENTION OF THE DEPARTMENT OF THE NAVY IN ORDER TO PRECLUDE A RECURRENCE OF THIS SITUATION.