B-168895, FEB. 12, 1970

B-168895, FEB. 12, 1970

CONTRACTS--MISTAKES--RECISSION DECISION TO ADMINISTRATOR OF GENERAL SERVICES ADMINISTRATION AUTHORIZING RECISSION OF CONTRACT WITH COBBLEDICK-KIBBE GLASS CO. FOR FURNISHING SHEET GLASS ON BASIS OF MISTAKE. A CONTRACTOR WHO AFTER AWARD ALLEGES THAT BID PRICE WAS BASED ON SINGLE RATHER THAN DOUBLE STRENGTH SHEET GLASS AND EVIDENCE SHOWS THAT THERE WAS 31.5 PERCENT DIFFERENCE BETWEEN SECOND LOW BID AND CONTRACTOR'S AND A 21 PERCENT DIFFERENCE BETWEEN BID AND LOWEST AWARD CONTRACT IN 5 MOST RECENT PURCHASES OF ITEM MAY HAVE CONTRACT RESCINDED. DISPARITY IS SO SIGNIFICANT THAT CONTRACTING OFFICER SHOULD HAVE NOTICED ERROR.

TO MR. KUNZIG:

REFERENCE IS MADE TO A LETTER DATED JANUARY 23, 1970, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, FORWARDING FOR OUR REVIEW AND DECISION THE FINDINGS AND DETERMINATIONS OF A CONTRACTING OFFICER WITH RESPECT TO A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. GS-065 3977 TO COBBLEDICK-KIBBE GLASS COMPANY (COBBLEDICK), OAKLAND, CALIFORNIA.

SOLICITATION NO. K/W/374390/-/TD/AB-F, ISSUED ON SEPTEMBER 22, 1969, BY THE KANSAS CITY, MISSOURI, REGIONAL OFFICE, INVITED BIDS FOR A DEFINITE QUANTITY OF FSC CLASS 5620 FLAT SHEET GLASS, DOUBLE STRENGTH. AWARD OF THE CONTRACT WAS MADE TO COBBLEDICK AS THE LOW BIDDER AT A PRICE OF $8.81 PER BOX, OR FOR A TOTAL CONTRACT PRICE OF $1,762. ON OCTOBER 22, 1969, BY TELEPHONE, AS SUBSEQUENTLY CONFIRMED BY LETTER OF OCTOBER 23, 1969, COBBLEDICK'S SALES SERVICE MANAGER INFORMED THE CONTRACTING OFFICER THAT THE COMPANY HAD MADE AN ERROR IN BID IN THAT IT QUOTED A PRICE FOR SINGLE RATHER THAN DOUBLE STRENGTH SHEET GLASS, AND REQUESTED CANCELLATION OF THE AWARD SINCE IT WOULD SUFFER A NET LOSS OF $350 IF REQUIRED TO COMPLY WITH THE CONTRACT'S TERMS.

BY LETTER DATED NOVEMBER 13, 1969, THE CONTRACTING OFFICER REQUESTED EVIDENCE IN SUPPORT AND SUBSTANTIATION OF THE ALLEGED MISTAKE WITH PERTINENT DOCUMENTATION. COBBLEDICK'S LETTERS OF NOVEMBER 21 AND DECEMBER 2, 1969, FURNISHED FACTORY COST SHEETS, WORKSHEETS AND A FACTORY PRICE SCHEDULE, ALL OF WHICH CLEARLY DISCLOSED THAT THE CONTRACTOR SUBMITTED A BID PRICE BASED ON ITS SUPPLIER'S COST FOR SINGLE STRENGTH GLASS RATHER THAN ON THE BASIS OF THE COST FOR THE REQUIRED DOUBLE STRENGTH GLASS.

OUR OFFICE WILL GRANT APPROPRIATE RELIEF, SUCH AS RESCISSION WITHOUT LIABILITY TO A CONTRACTOR, WHERE A MISTAKE HAS BEEN ALLEGED SUBSEQUENT TO THE AWARD OF A CONTRACT, 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; B-167745, SEPTEMBER 2, 1969; B-167678, AUGUST 21, 1969; B-168057, OCTOBER 28, 1969; B-168016, OCTOBER 30, 1969; 37 COMP. GEN. 685 (1958); 17 ID. 575 (1938).

THE CONTRACTING OFFICER'S FINDINGS REVEALED THAT THE PRICES OF THE NINE BIDS RECEIVED RANGED FROM COBBLEDICK'S LOW BID OF $8.81 PER BOX TO A HIGH BID OF $15.94 PER BOX. THE SECOND LOW BID WAS $11.57 PER BOX AND THE AWARD PRICES OF THE FIVE PREVIOUS PURCHASES OF THE ITEM RANGED FROM $10.608 PER BOX TO $12.56 PER BOX. BASED ON THESE FINDINGS, THE CONTRACTING OFFICER, IN RECOMMENDING THAT THE CONTRACT BE RESCINDED, STATED:

"COBBLEDICK-KIBBE GLASS CO. HAS SUBMITTED CLEAR AND CONVINCING EVIDENCE OF THE ALLEGED MISTAKE IN ITS BID, AND THE DISPARITY IN THE BIDS FOR THIS ITEM WAS SO APPARENT AS TO HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF THE MISTAKE."

IN VIEW OF THIS STATEMENT, THE 31.5-PERCENT DIFFERENCE BETWEEN THE SECOND LOW BID AND COBBLEDICK'S BID AND THE 21-PERCENT DIFFERENCE BETWEEN ITS BID AND THE LOWEST AWARDED CONTRACT PRICE OF THE FIVE MOST RECENT PURCHASES OF THE ITEM, THE CONTRACT MAY BE RESCINDED WITHOUT LIABILITY TO COBBLEDICK, AS ADMINISTRATIVELY RECOMMENDED. AS REQUESTED, THE ENCLOSURES FORWARDED WITH THE SUBMISSION ARE RETURNED HEREWITH.