B-168212, NOV. 17, 1969

B-168212: Nov 17, 1969

Additional Materials:

Contact:

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

 

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

EXTENSION DIFFERENCE UNDER SURPLUS SALES CONTRACT WHERE UNIT BID PRICES QUOTED WERE NOT COMPATIBLE WITH TOTAL BID PRICES QUOTED AND 20 PERCENT BID DEPOSIT AND BID WAS ACCEPTED AT UNIT PRICES QUOTED. RELIEF FROM MISTAKE IN BID ALLEGED AFTER AWARD IS GRANTED. AS SUCCESSOR SALES CONTRACTING OFFICER BELIEVES BIDDER INTENDED UNIT BID PRICES TO BE $0.0237 AND $0.02321 (RATHER THAN $0.237 AND $0.2321 AS SHOWN ON BID) WHICH WOULD BE COMPATIBLE WITH TOTAL BID PRICE SHOWN AND 20 PERCENT DEPOSIT AND WHICH IS SUBSTANTIATED BY MARKET PRICES AND BY OTHER BIDS RECEIVED. SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT MISTAKE EXISTED. MAY NOT CONSIDER UNIT PRICE BID WHICH IS SUBSTANTIALLY DIFFERENT FROM TOTAL BID PRICE WITHOUT VERIFICATION.

B-168212, NOV. 17, 1969

SALES--BIDS--MISTAKES--UNIT PRICE V. EXTENSION DIFFERENCE UNDER SURPLUS SALES CONTRACT WHERE UNIT BID PRICES QUOTED WERE NOT COMPATIBLE WITH TOTAL BID PRICES QUOTED AND 20 PERCENT BID DEPOSIT AND BID WAS ACCEPTED AT UNIT PRICES QUOTED, RELIEF FROM MISTAKE IN BID ALLEGED AFTER AWARD IS GRANTED, AS SUCCESSOR SALES CONTRACTING OFFICER BELIEVES BIDDER INTENDED UNIT BID PRICES TO BE $0.0237 AND $0.02321 (RATHER THAN $0.237 AND $0.2321 AS SHOWN ON BID) WHICH WOULD BE COMPATIBLE WITH TOTAL BID PRICE SHOWN AND 20 PERCENT DEPOSIT AND WHICH IS SUBSTANTIATED BY MARKET PRICES AND BY OTHER BIDS RECEIVED; SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT MISTAKE EXISTED; GOVT. MAY NOT CONSIDER UNIT PRICE BID WHICH IS SUBSTANTIALLY DIFFERENT FROM TOTAL BID PRICE WITHOUT VERIFICATION; AND ACCEPTANCE OF BID WITH CONSTRUCTIVE OR ACTUAL KNOWLEDGE OF ERROR THEREIN DOES NOT CONSUMMATE VALID AND BINDING CONTRACT.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 23, 1969, FILE REFERENCE DSAH -G, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, FORWARDING FOR OUR DECISION THE REQUEST OF MR. M. BRISKMAN FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF SURPLUS SALES CONTRACT 23 0017-112.

IT IS REPORTED THAT ITEMS NOS. 70, 72 AND 73 OF SALES INVITATION NO. 23- 0017, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, JACKSONVILLE, FLORIDA, WERE AWARDED TO MR. BRISKMAN ON CONTRACT 23-0017-112 DATED SEPTEMBER 9, 1969, FOR A TOTAL CONTRACT PRICE OF $4,860.52. ITEM 72 COVERED 9,415 STAINLESS STEEL SCREWS AND ITEM 73 COVERED 11,273 STEEL CADMIUM-PLATED SCREWS. BIDDERS HAD BEEN REQUESTED TO SUBMIT UNIT PRICES PER HUNDRED AND TOTAL BID PRICES.

BY LETTER DATED SEPTEMBER 16, 1969, THE CONTRACTOR STATED THAT THE UNIT PRICE FOR ITEM 72 SHOULD HAVE BEEN $0.0237 AND NOT $0.237; AND FOR ITEM 73 THE UNIT PRICE SHOULD HAVE BEEN $0.02321 AND NOT $0.2321. IN THIS RESPECT THE RECORD SHOWS THAT OTHER BIDS RECEIVED FOR ITEMS 72 AND 73 RANGED FROM $0.002667 TO $0.1066 PER HUNDRED FOR ITEM 72 AND FROM $0.0024 TO $0.11 PER HUNDRED FOR ITEM 73.

THE SALES OFFICE, WITHOUT REQUESTING CONFIRMATION OF THE UNIT PRICES ON ITEMS 72 AND 73, ACCEPTED MR. BRISKMAN'S BID AT THE UNIT PRICES QUOTED, NOTWITHSTANDING THAT THE TOTAL BID PRICE COLUMN FOR ITEMS 72 AND 73 CLEARLY INDICATED A PRICE ONE-TENTH OF THAT ACTUALLY AWARDED. ALSO, THE FACE OF THE BID SHOWS THAT A BID DEPOSIT ($113.17) WAS FURNISHED WHICH WAS INSUFFICIENT TO COVER 20 PERCENT OF THE AWARD BASED ON THE TOTAL BID PRICE FOR ALL ITEMS BID UPON. IT IS REPORTED THAT THE MARKET APPRAISAL FOR ITEM 72 WAS $0.055 PER HUNDRED AND FOR ITEM 73 $0.033 PER HUNDRED.

THE SUCCESSOR SALES CONTRACTING OFFICER IS OF THE OPINION THAT MR. BRISKMAN MADE A BONA FIDE MISTAKE IN BID AND THAT HE INTENDED HIS UNIT BID PRICES TO BE $0.0237 AND $0.02321, WHICH WOULD BE COMPATIBLE WITH HIS TOTAL BID PRICE AND HIS 20 PERCENT BID DEPOSIT. THIS IS ALSO SUBSTANTIATED BY THE ESTABLISHED MARKET APPRAISAL PRICES AND BY THE OTHER BIDS RECEIVED ON THESE ITEMS. IT IS FURTHER REPORTED THAT THE SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT A MISTAKE IN BID EXISTED. HOWEVER, INADVERTENTLY THIS WAS NOT DETECTED PRIOR TO AWARD OF THESE ITEMS AND IN VIEW THEREOF IT IS ADMINISTRATIVELY RECOMMENDED THAT ITEMS 72 AND 73 BE DELETED FROM THE CONTRACT.

AS WAS STATED IN CHERNICK V UNITED STATES, 372 F.2D 492, 495 (1967) -

"* * * IT IS COMMON KNOWLEDGE THAT THE MOST ORDINARY KIND OF ARITHMETICAL OR CLERICAL MISTAKE INVOLVES THE MISPLACING OF A DECIMAL. ANY INSTANCE OF A MONETARY FIGURE ONE-TENTH OR TEN TIMES WHAT IT MIGHT NATURALLY BE EXPECTED TO BE, IS A WARNING FLAG. * * *" MOREOVER, WE HAVE HELD THAT THE GOVERNMENT MAY NOT CONSIDER A UNIT PRICE BID WHICH IS SUBSTANTIALLY DIFFERENT FROM THE TOTAL PRICE BID WITHOUT VERIFICATION. 37 COMP. GEN. 829 (1958).

AFTER REVIEWING THE RECORD, WE AGREE WITH THE SUCCESSOR CONTRACTING OFFICER AND YOUR ASSISTANT COUNSEL THAT AN HONEST MISTAKE HAS BEEN MADE BY MR. BRISKMAN AS CLAIMED AND THAT THE SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF A PROBABLE MISTAKE REQUIRING BID CONFIRMATION PRIOR TO AWARD. SEE B-165930, JANUARY 27, 1969, AND DECISIONS CITED THEREIN.

SINCE ACCEPTANCE OF A BID WITH KNOWLEDGE, EITHER CONSTRUCTIVE OR ACTUAL, OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT, THE CONTRACT MAY BE AMENDED BY DELETING ITEMS 72 AND 73, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO MR. BRISKMAN.