B-167989, DEC. 4, 1969

B-167989, DEC. 4, 1969

MISTAKES--ALLEGATION PRIOR TO AWARD--CONTRACTING OFFICER'S ERROR DETECTION DUTY--NOTICE OF ERROR WHERE BID FOR TEST MOLDS F.O.B. NEW ORLEANS, LA; WAS AWARDED JUNE 13, 1969 AND BIDDER NOTIFIED CONTRACTING OFFICER JUNE 28, 1969 OF MISTAKE ALLEGING QUOTATION PRICE WAS BASED ON SHIPPING GOODS F.O.B. HARTSVILLE, S.C; INSTEAD OF NEW ORLEANS AND SUBMITTED PRICE LIST EFFECTIVE A MONTH LATER, RELIEF IS DENIED BECAUSE WHEN BIDDER MISTAKENLY SUBMITS BID AND THAT BID IS ACCEPTED IN GOOD FAITH, CONTRACTOR MUST BEAR CONSEQUENCES AND RESPONSIBILITIES UNLESS IT CAN BE DETERMINED MISTAKE WAS MUTUAL OR SO APPARENT IT MUST BE PRESUMED CONTRACTING OFFICER KNEW OF MISTAKE AND IN INSTANT CASE BID SUBMITTED WAS ONLY 20 PERCENT LESS THAN NEXT LOWEST BID AND ONLY 18 PERCENT LESS THAN AVERAGE CONTRACT PRICE FOR SIMILAR REQUIREMENTS.

TO SONOCO PRODUCTS COMPANY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 23, 1969, WITH ENCLOSURES, WHEREIN YOU REQUEST RELIEF FROM A MISTAKE ALLEGEDLY MADE BY YOUR CONCERN IN PREPARING THE BID YOU SUBMITTED UNDER SOLICITATION NO. DACW29-69-B- 0136, WHICH WAS ISSUED BY THE NEW ORLEANS DISTRICT, ARMY CORPS OF ENGINEERS, ON MAY 12, 1969, FOR THE PROCUREMENT OF APPROXIMATELY 12,000 TEST MOLDS, F.O.B. U.S. ARMY ENGINEER DISTRICT, NEW ORLEANS. ON JUNE 4, 1969, THE FOLLOWING BIDS WERE RECEIVED:

PROMPT

UNIT TOTAL PAYMENT

BIDDER QUANTITY PRICE PRICE DISCOUNT

------ -------- ----- ----- -------- SONOCO PRODUCTS COMPANY

12,000 $160.00/M $1,920.00 1 PERCENT CONSTRUCTION PRODUCTS DIV.

10 DAYS HARTSVILLE, SOUTH CAROLINA

29550 CLEVEPAK CORPORATION 12,000 ?20333 $2,439.96 1 PERCENT 3980 PREMIER AVENUE 10 DAYS MEMPHIS, TENNESSEE 38118 SOILTEST, INC. 12,000 $0.305 $3,660.00 NET 2205 LEE STREET EVANSTON, ILLINOIS 60202

PURSUANT TO THE REQUIREMENT SET FORTH IN ARMED SERVICES PROCUREMENT REGULATION 2-406.1, THE CONTRACTING OFFICER EXAMINED YOUR OFFER FOR MISTAKES AND FOUND NO INDICATION OF ANY PRICING ERROR THEREIN IN THE LIGHT OF THE OTHER BIDS RECEIVED AND PRICES PAID UNDER CONTRACTS AWARDED FOR THE SAME REQUIREMENT IN FISCAL YEARS 1968 AND 1969. UPON HIS DETERMINATION THAT YOUR CONCERN WAS A RESPONSIBLE BIDDER, AWARD WAS THEREUPON MADE TO YOUR COMPANY ON JUNE 13, 1969.

ON JUNE 28, 1969, YOU NOTIFIED THE CONTRACTING OFFICER OF A MISTAKE IN YOUR BID, ALLEGING THAT THE QUOTED PRICE WAS BASED ON SHIPPING THE GOODS F.O.B. HARTSVILLE, SOUTH CAROLINA, INSTEAD OF F.O.B. NEW ORLEANS, LOUISIANA. IN SUPPORT OF YOUR ALLEGATION YOU SUBMITTED A PRICE LIST, DATED JULY 1, 1969, SHOWING A PRICE OF $160 PER THOUSAND FOR MOLDS, IN LOTS OF 27 TO 99 CARTONS OF 24 MOLDS EACH, TOGETHER WITH A LIST OF FREIGHT RATES WHICH WOULD APPLY TO SHIPMENTS OF THE MOLDS FROM HARTSVILLE TO NEW ORLEANS. THE DEPARTMENT POINTS OUT THAT IF YOUR BID WAS COMPUTED ON THE BASIS YOU SUGGEST, AT $239 PER THOUSAND, IT WOULD EXCEED THE BID QUOTED BY THE NEXT HIGHER BIDDER; ALSO THAT THE PRICE LIST SUBMITTED WAS NOT EFFECTIVE UNTIL A MONTH AFTER YOUR BID.

IT IS WELL SETTLED THAT WHEN A BIDDER MISTAKENLY SUBMITS A BID IN RESPONSE TO AN INVITATION FOR BIDS, AND THAT BID IS ACCEPTED IN GOOD FAITH BY THE CONTRACTING AGENCY, THE CONTRACTOR MUST BEAR THE CONSEQUENCES AND RESPONSIBILITIES OF THE RESULTING CONTRACTUAL RELATIONSHIP UNLESS IT CAN BE DETERMINED THAT THE MISTAKE WAS MUTUAL OR SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 3 COMP. GEN. 821 (1924); 23 ID. 596 (1944). THERE IS NO DATA INDICATING THAT A MUTUAL MISTAKE OCCURRED IN THE SUBJECT CASE.

WHILE A CONTRACTOR'S UNILATERAL BID MISTAKE MAY BE SO OBVIOUS THAT THE CONTRACTING OFFICER SHOULD BE CHARGED WITH NOTICE OF THE MISTAKE, YOUR BID WAS ONLY 20 PERCENT LESS THAN THE NEXT LOWEST BID AND ONLY 18 PERCENT LESS THAN THE AVERAGE OF THE CONTRACT PRICES FOR SIMILAR REQUIREMENTS IN FISCAL YEARS 1968 AND 1969. THE DECISIONS OF THIS OFFICE HAVE CONSISTENTLY HELD THAT SUCH A DISCREPANCY IS NOT SUFFICIENT TO PUT A CONTRACTING OFFICER ON NOTICE THAT A BID IS ERRONEOUS. IN VIEW THEREOF WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER WAS CHARGEABLE WITH NOTICE OF A MISTAKE IN YOUR BID. ACCEPTANCE OF YOUR OFFER THEREFORE CREATED A VALID AND BINDING CONTRACT, AND NO OFFICER OF THE GOVERNMENT MAY WAIVE THE GOVERNMENT'S RIGHTS THEREUNDER.

FOR THE REASONS SET FORTH ABOVE YOUR REQUEST FOR REFORMATION MUST BE DENIED.