B-169849, JUN. 9, 1970

B-169849, JUN. 9, 1970

CONTRACTS--MISTAKES--UNILATERAL NEGLIGENCE CONTRACTOR ALLEGING MISTAKE IN BID AFTER AWARD OF CONTRACT FOR STORAGE TANKS AND SUBMITTING WORKSHEETS IN SUPPORT OF ERROR, IS NOT ENTITLED TO CANCELLATION OF CONTRACT NOR TO INCREASED CONSIDERATION SINCE ERROR WAS UNILATERAL, BEING SOLELY ATTRIBUTABLE TO BIDDER'S OWN OVERSIGHT OR NEGLIGENCE AND WAS NOT CONTRIBUTED TO BY GOVERNMENT. BECAUSE BIDDER HAS PRIMARY RESPONSIBILITY FOR BID PREPARATION, UNLESS ERROR IS APPARENT ON FACE OF BID, PLACING CONTRACTING OFFICER ON NOTICE OF ERROR, GOVERNMENT ACCEPTANCE OF BID FIXES RIGHTS AND LIABILITIES OF PARTIES TO CONTRACT. SEE COMP. GEN. DECS. AND CT. CASES CITED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED MAY 18, 1970, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, SUBMITTING FOR OUR DECISION A REQUEST BY THE RAPID TANK AND SUPPLY COMPANY (RAPID) FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. 52500-CTO-232 (SOLICITATION NO. DSC-70-209) BY THE BUREAU OF LAND MANAGEMENT, DENVER SERVICE CENTER, ON APRIL 1, 1970.

THE SUBJECT SOLICITATION CALLED FOR BIDS ON TWO ITEMS WHICH RESULTED IN TWO CONTRACTS. ITEM 1, WHICH WAS AWARDED TO RAPID, CALLED FOR THE FURNISHING OF THREE SKID-MOUNTED 7,519-GALLON WATER STORAGE TANKS. TWELVE BIDS WERE RECEIVED AND OPENED ON MARCH 25, 1970. THE LOW BID WAS SUBMITTED BY RAPID IN THE SUM OF $1,615 PER TANK FOR A TOTAL AMOUNT OF $4,845. THE BIDS ON ITEM 1 REFLECTED A LARGE SPREAD IN UNIT PRICES RANGING FROM THE LOW OF $1,615 EACH TO A HIGH OF $3,648; THE AVERAGE BID PER TANK WAS $2,338.73. COMPARING THE BID OF RAPID WITH THOSE OF THE SECOND AND THIRD LOW BIDDERS FOR THE TANKS IN ITEM 1 REVEALS A UNIT PRICE DIFFERENCE OF $235 ($1,850 PER UNIT) AND $371.73 ($1,986.73 PER UNIT), RESPECTIVELY.

BY LETTER OF APRIL 8, 1970, RAPID NOTIFIED THE DENVER SERVICE CENTER THAT AN ERROR HAD BEEN MADE IN ITS BID AND REQUESTED CANCELLATION OF THE CONTRACT. IN ITS LETTER, RAPID STATED THAT IT HAD NEGLECTED TO ADD THE LAST TWO COLUMNS IN ITS WORKSHEET TO OBTAIN A GRAND TOTAL FOR EACH TANK WHICH WOULD HAVE INCLUDED A TOTAL PRICE FOR "BUY OUT" AND A TOTAL PRICE FOR FABRICATION. WITH ITS LETTER, RAPID SUBMITTED ITS ORIGINAL WORKSHEET INDICATING HOW THE ERROR OCCURRED.

WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF A CONTRACT, OUR OFFICE WILL GRANT RELIEF ONLY IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID IS DEPENDENT UPON WHETHER THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE MISTAKE.

THE RECORD ESTABLISHES THAT THERE WAS NO ERROR APPARENT ON THE FACE OF RAPID'S BID AT THE TIME OF THE BID OPENING. THE CONTRACTING OFFICER HAS REPORTED THAT THE BID DID NOT APPEAR TO BE EXCESSIVELY LOW AT THE TIME OF OPENING AND RAPID'S BID DID NOT SEEM UNREASONABLE IN COMPARISON WITH THE SECOND AND THIRD LOWEST BIDS RECEIVED. IN VIEW OF THIS, AND THE FACT THAT THERE WAS ONLY A 15-PERCENT DIFFERENCE BETWEEN THE LOW BID AND THE SECOND LOWEST AND THE CLOSE RANGE IN THE PRICES RECEIVED, WE CANNOT SAY THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE LIKELIHOOD OF ERROR IN RAPID'S BID. ACCORDINGLY, WE MUST CONCUR IN THE CONTRACTING OFFICER'S DETERMINATION THAT RAPID'S BID DID NOT APPEAR TO BE EXCESSIVELY LOW SO AS TO HAVE REQUIRED VERIFICATION BEFORE AWARD. THE ACCEPTANCE OF RAPID'S BID, IN THESE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THEREUNDER. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313 (1919); AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75 (1922); B- 165288, NOVEMBER 15, 1968; 45 COMP. GEN. 700 (1966).

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. ALTHOUGH AN ERROR MAY HAVE BEEN MADE IN THE BID, IT IS CLEAR THAT SUCH ERROR WAS ATTRIBUTABLE TO THE BIDDER'S OWN OVERSIGHT OR NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL, NOT MUTUAL, AND, THEREFORE, DOES NOT ENTITLE RAPID TO RELIEF. B-159619, AUGUST 2, 1966.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR RELIEVING RAPID FROM ITS OBLIGATION TO FURNISH ITEM 1 AT THE CONTRACT PRICE OR FOR INCREASING THE CONSIDERATION UNDER THE CONTRACT.