B-168607, JAN. 14, 1970

B-168607: Jan 14, 1970

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SINCE HIGH BID WAS CONSIDERABLY HIGHER THAN NEXT HIGH BID AND CONTRACTING OFFICER KNEW MISTAKE WAS INVOLVED. THE VERIFICATION WAS INADEQUATE AND ACCEPTANCE DID NOT RESULT IN BINDING CONTRACT. SECRETARY: REFERENCE IS MADE TO LETTER DATED DECEMBER 11. TWO BIDS WERE RECEIVED IN THE AMOUNTS OF 1 PIASTER PER POUND AND 28 PIASTERS PER POUND SUBMITTED BY MADAME QUAN-THI-HIEN. SHE WAS QUESTIONED BY THE CONTRACTING OFFICER IMMEDIATELY AFTER BID OPENING AND REQUESTED TO VERIFY HER BID AS SUBMITTED. IT IS REPORTED THAT THE BID WAS ACCEPTED BY THE SALES CONTRACTING OFFICER. ALTHOUGH "KNOWING IN HIS OWN MIND THAT THIS WAS A MISTAKE IN BID.". STATING: "OUR FIRM HAVE THE HONOR TO INFORM YOUR OFFICE THAT WE MAKE A GREAT MISTAKE ON THE PRICE IN OUR BID FOR GARBAGE.

B-168607, JAN. 14, 1970

CONTRACTS--MISTAKES--CORRECTION DECISION TO SECRETARY OF THE ARMY AUTHORIZING AMENDMENT OF GARBAGE COLLECTION CONTRACT AWARDED TO MADAME QUAN-THI-HIEN, VIETNAM, ON BASIS OF MISTAKE. SINCE HIGH BID WAS CONSIDERABLY HIGHER THAN NEXT HIGH BID AND CONTRACTING OFFICER KNEW MISTAKE WAS INVOLVED, DESPITE VERIFICATION IMMEDIATELY AFTER BID OPENING, THE VERIFICATION WAS INADEQUATE AND ACCEPTANCE DID NOT RESULT IN BINDING CONTRACT. SINCE CLERICAL ERROR HAS BEEN SUBSTANTIATED CONTRACT MAY BE AMENDED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 11, 1969, WITH ENCLOSURE, FROM COUNSEL, OFFICE OF THE CHIEF OF SUPPORT SERVICES, SUBMITTING FOR DECISION THE CLAIM OF MISTAKE IN BID ALLEGED AFTER AWARD BY MADAME QUAN-THI-HIEN, CHOLON, REPUBLIC OF VIETNAM, UNDER ARMY SURPLUS SALES CONTRACT NO. 92-112- 0001-2, ISSUED BY THE SALES CONTRACTING OFFICER, SALES AND DISPOSAL DIVISION, HEADQUARTERS, 1ST LOGISTICAL COMMAND, VIETNAM.

TERM SALE NO. 92-112-0001 REQUESTED BIDS TO BE OPENED ON JULY 1, 1969, FOR A 1-YEAR GARBAGE CONTRACT AT TAN SON NHUT AIR BASE, VIETNAM. ITEM 1 DESCRIBED THE PROPERTY AS THE SOLID OR SEMI-SOLID WASTES GENERATED IN THE PREPARATION, HANDLING, AND DISPENSING OF FOOD, INCLUDING BUT NOT LIMITED TO WASTE FOOD, NONEDIBLE PORTIONS OF FOOD STUFFS AND FOOD WRAPPINGS AND CONTAINERS.

TWO BIDS WERE RECEIVED IN THE AMOUNTS OF 1 PIASTER PER POUND AND 28 PIASTERS PER POUND SUBMITTED BY MADAME QUAN-THI-HIEN. SHE WAS QUESTIONED BY THE CONTRACTING OFFICER IMMEDIATELY AFTER BID OPENING AND REQUESTED TO VERIFY HER BID AS SUBMITTED. SHE VERIFIED HER BID AS CORRECT AT 28 PIASTERS PER POUND. IT IS REPORTED THAT THE BID WAS ACCEPTED BY THE SALES CONTRACTING OFFICER, ALTHOUGH "KNOWING IN HIS OWN MIND THAT THIS WAS A MISTAKE IN BID."

BY LETTER OF AUGUST 4, 1969, THE CONTRACTOR SUBMITTED A CLAIM OF MISTAKE IN BID, STATING:

"OUR FIRM HAVE THE HONOR TO INFORM YOUR OFFICE THAT WE MAKE A GREAT MISTAKE ON THE PRICE IN OUR BID FOR GARBAGE,

INSTEAD OF: 28$00VN PER POUND

IT SHOULD BE: 2$80VN PER POUND

"OUR FIRM REALLY NEED GARBAGE TO FEED OUR PIGS INSTEAD OF TO SELL IT, SO THAT WE AFRAID TO MAKE IMMEDIATELY COMPLAINT ABOUT THAT.

"WE MEANT TO BID 2$80 (VN) FOR EACH POUND WHICH IS ?0023 (US). OUR CLERK MAKE MISTAKE AND PUT 28$00 (VN) PER POUND. * * *"

THE EXCHANGE RATE APPLICABLE AT THE TIME OF BIDDING WAS 118 VIETNAMPIASTERS TO ONE UNITED STATES DOLLAR. THE CONTRACTOR'S BID OF 28 VIETNAM PIASTERS PER POUND WAS THEREFORE EQUIVALENT TO $0.237 PER POUND. IT IS REPORTED FURTHER THAT ON ALL OTHER GARBAGE CONTRACTS AWARDED IN THE PAST THE HIGH BIDDER WAS GENERALLY IN THE 2 TO 3 PIASTER PER POUND RANGE OR APPROXIMATELY $0.015 TO $0.025 PER POUND. IT IS CONCEDED BY THE SALES CONTRACTING OFFICER THAT HE KNEW AT THE TIME OF BID OPENING THAT THE GARBAGE WAS TO BE USED AS FEED FOR HOGS; THAT THE PRICE OF PORK ON THE SAIGON MARKET HAD BEEN $0.25 PER POUND; AND THAT THE BID PRICE FOR THE GARBAGE WAS VERY CLOSE TO THE MARKET PRICE PER POUND OF THE ANIMAL WHICH WOULD CONSUME THE GARBAGE. IF THE BID IS CORRECTED, AS REQUESTED, TO 2.8 VIETNAM PIASTERS PER POUND, IT WOULD COMPARE FAVORABLY WITH OTHER RECENT BID PRICES FOR GARBAGE AND IT WOULD STILL REMAIN THE HIGHEST BID.

GENERALLY, AWARD OF A CONTRACT FOLLOWING VERIFICATION OF THE BID UPON REQUEST OF THE CONTRACTING OFFICER RESULTS IN A BINDING CONTRACT. COMP. GEN. 942, 947 (1939); 27 ID. 17 (1947). NEVERTHELESS, THE CONTRACTING OFFICER CANNOT DISCHARGE HIS VERIFICATION DUTY MERELY BY REQUESTING CONFIRMATION OF THE BID PRICE--THE GOVERNMENT MUST APPRISE THE BIDDER OF THE MISTAKE WHICH IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION. SEE B-154955, AUGUST 26, 1964; B-144238, OCTOBER 28, 1960; 35 COMP. GEN. 136 (1955); 39 ID. 405, 407 (1959). SEE ALSO UNITED STATES V. METRO NOVELTY MANUFACTURING CO; 125 F. SUPP. 713 (1954).

THE CONTRACTING OFFICER'S VERBAL REQUEST TO THE CONTRACTOR AT BID OPENING TO VERIFY HER HIGH BID DID NOT FULLY INFORM HER OF THE REASON THAT A MISTAKE WAS SUSPECTED. SINCE THE HIGH BID WAS CONSIDERABLY HIGHER THAN THE NEXT HIGHEST BID AND THE CONTRACTING OFFICER STATES THAT HE KNEW A MISTAKE WAS INVOLVED DESPITE THE CONFIRMATION OF THE BID, THERE WAS AN INADEQUATE VERIFICATION REQUEST AND THE ACCEPTANCE OF THE BID DID NOT RESULT IN A BINDING AND VALID CONTRACT. 37 COMP. GEN. 786, 788 (1958). SEE ALSO B-158207, JANUARY 14, 1966; B-134428, JANUARY 16, 1958.

SINCE THE CLERICAL ERROR ALLEGED BY MADAME QUAN-THI-HIEN HAS BEEN SUBSTANTIATED BY THE RECORD AS BONA FIDE, THE CONTRACT MAY BE AMENDED TO SHOW THE INTENDED PRICE OF 2.8 VIETNAM PIASTERS PER POUND AND THE CONTRACTOR MAY BE PAID ACCORDINGLY AS ADMINISTRATIVELY RECOMMENDED. CHERNICK V. UNITED STATES, 372 F. 2D 492, 495 (1967); 37 COMP. GEN. 706 (1958).

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO THE CONTRACT.