B-167745, SEP. 2, 1969

B-167745, SEP. 2, 1969

CONTRACTS - MISTAKES DECISION TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION AUTHORIZING RECISSION OF CONTRACT FOR SODIUM CHLORIDE TO T.H. BAYLIS CO., LOW BIDDER. WHERE LOW BIDDER WHO AFTER AWARD OF CONTRACT ALLEGED MISTAKE AND RECORD SHOWS THAT PRICE FOR ITEM WAS 26 PERCENT LOWER PER BAG THAN NEXT LOW BIDDER USING SAME SUPPLIER SO THAT CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF AWARD, RECISSION OF CONTRACT WITHOUT LIABILITY IS AUTHORIZED.

TO MR. KUNZIG:

REFERENCE IS MADE TO LETTER DATED AUGUST 18, 1969, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, SUBMITTING FOR OUR REVIEW AND DECISION THE FINDINGS AND DETERMINATION OF A CONTRACTING OFFICER REGARDING A MISTAKE IN BID ALLEGED AFTER AWARD BY THE T.H. BAYLIS COMPANY (BAYLIS), PROVIDENCE, RHODE ISLAND.

THE BOSTON REGIONAL OFFICE ISSUED SOLICITATION NO. BO-W-I-214-69 ON AUGUST 21, 1968, COVERING THE REQUIREMENTS FOR FSC GROUP 68, SODIUM CHLORIDE, TECHNICAL, FOR THE PERIOD OCTOBER 1, 1968, OR DATE OF AWARD, WHICHEVER WAS LATER, THROUGH SEPTEMBER 30, 1969. ITEM 3 OF THE INVITATION CALLED FOR BIDS FOR AN ESTIMATED 12,000 BAGS OF COMPRESSED EVAPORATED SALT, ON AN F.O.B. ORIGIN AND F.O.B. HINGHAM (DESTINATION) BASIS.

ON SEPTEMBER 12, 1968, THE FOLLOWING BIDS WERE RECEIVED ON ITEM 3:

PRICE PER BAG BIDDER ORIGIN

DESTINATION ------ ------ ----------- T.H. BAYLIS CO. $1.02 $1.49 NYANZA INC. 1.28 1.76 HARDY SALT CO. 1.285 1.915 BOSTON SALT CO., INC. 1.45 1.77 INTERNATIONAL SALT CO. 1.45 1.85 WATKINS SALT CO. 1.45 1.93 MORTON SALT CO. 1.55 2.03 F.A. HERNANDEZ AND SONS

2.99 3.89

BAYLIS WAS THE LOW BIDDER ON ITEM 3 (THE ONLY ITEM ON WHICH IT BID), AND WAS AWARDED A CONTRACT ON SEPTEMBER 26, 1968. IT IS REPORTED THAT SUBSEQUENT TO AWARD, THE CONTRACTING OFFICER RECEIVED A TELEPHONE CALL FROM BAYLIS' SUPPLIER INDICATING THAT BAYLIS DID NOT REALIZE IT WAS BIDDING ON COMPRESSED EVAPORATED SALT. WHILE NO RECORD WAS MADE OF THE DATE OF THIS CALL, THE CONTRACTING OFFICE BY LETTER OF FEBRUARY 3, 1969, ADVISED BAYLIS OF THE NEED TO SUPPORT THE ALLEGED MISTAKE IN BID WITH STATEMENTS, WORKSHEETS, AND OTHER PERTINENT DATA.

THEREAFTER, BAYLIS BY LETTERS DATED FEBRUARY 14, MARCH 19, AND MAY 27, 1969, SUBMITTED EVIDENCE IN SUPPORT OF ITS CLAIM OF ERROR. FROM THE EVIDENCE SUBMITTED IT APPEARS THAT BAYLIS INTENDED TO BID ON ITEM 2 (ROCK SALT), RATHER THAN ON ITEM 3 (COMPRESSED EVAPORATED SALT), AND THAT BAYLIS' COST OF $1.19 PER BAG FROM ITS SUPPLIER FOR ITEM 3 EXCEEDS ITS F.O.B. ORIGIN BID BY 17 CENTS PER BAG. IN THIS RESPECT, IT IS REPORTED THAT THE PREVIOUS CONTRACT PRICE FOR ITEM 3 WAS $1.285 PER BAG, F.O.B. ORIGIN. WE NOTE ALSO THAT THE OTHER BIDS ON ITEM 3 RANGED FROM THE SECOND LOW OF $1.28 TO A HIGH OF $2.99 PER BAG. IT IS STATED THAT NO ORDERS HAVE BEEN PLACED AND THAT NO DELIVERIES HAVE BEEN MADE UNDER THE CONTRACT.

WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF THE CONTRACT, OUR OFFICE WILL GRANT RELIEF IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. B-167031, JUNE 16, 1969; 30 COMP. GEN. 509. IN HER FINDINGS AND DETERMINATION, IN WHICH SHE RECOMMENDED THAT THE AWARD OF ITEM 3 TO BAYLIS BE RESCINDED, THE CONTRACTING OFFICER STATES THAT SHE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD AS BAYLIS' PRICE WAS 26 CENTS LOWER PER BAG THAN THE NEXT LOW BIDDER USING THE SAME SUPPLIER, AND ALSO STATES THAT SHE SHOULD HAVE CONTACTED BAYLIS PRIOR TO AWARD TO VERIFY ITS BID.

IN THE CIRCUMSTANCES, WE AGREE WITH YOUR GENERAL COUNSEL AND THE CONTRACTING OFFICER THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR IN THE BID AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. B-167031, SUPRA; B-165956, JANUARY 31, 1969.

ACCORDINGLY, WE WILL NOT OBJECT TO RESCISSION OF THE CONTRACT WITHOUT LIABILITY TO THE CONTRACTOR.

THE FILE TRANSMITTED WITH THE GENERAL COUNSEL'S LETTER OF AUGUST 18, 1969, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S FINDINGS AND DETERMINATION, IS RETURNED.