B-169853, MAY 27, 1970

B-169853: May 27, 1970

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WHOSE BIDS WERE SUSTANTIALLY HIGHER THAN APPRAISED PRICES AND OTHER BIDS. TO GENERAL HEDLUND: REFERENCE IS MADE TO A LETTER DATED MAY 12. BROWN WAS MAILED A NOTICE OF AWARD AS HIGH BIDDER FOR ITEM 193 AT $800 AND ITEM 244 AT $1. SHE SUSPECTED THAT BROWN HAD SUBMITTED ERRONEOUS BIDS ON ITEMS 193 AND 244 SINCE ITS BID PRICES WERE SUBSTANTIALLY HIGHER THAN THE OTHER BIDS RECEIVED ON THE ITEMS WHICH WERE WITHIN THE ACCEPTABLE RANGE OF CURRENT MARKET APPRAISALS. THE AWARD NOTICE TO BROWN WAS MAILED ALONG WITH THE AWARD NOTICES TO THE OTHER AWARDEES. OUR OFFICE WILL GRANT APPROPRIATE RELIEF. IF THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED OR HAD REASON TO KNOW OF THE EXISTENCE OF THE ERROR PRIOR TO AWARD.

B-169853, MAY 27, 1970

SALES--BIDS--MISTAKES--CONTRACT CANCELLATION--ERROR SUSPECTED BUT NOT VERIFIED WHERE HIGH BIDDER ON SALE OF SURPLUS MACHINE TOOLS, WHOSE BIDS WERE SUSTANTIALLY HIGHER THAN APPRAISED PRICES AND OTHER BIDS, SUBMITTED DOCUMENTS IN SUPPORT OF ASSERTION OF ERROR AND GOVERNMENT CONTRACTING OFFICER ADMITS SHE SUSPECTED ERROR BUT FAILED TO REQUEST VERIFICATION THROUGH UNINTENTIONAL OVERSIGHT, CONTRACTS AWARDED MAY BE RESCINDED WITHOUT LIABILITY TO BIDDER SINCE ACCEPTANCE OF BID BY CONTRACTING OFFICER WITH KNOWLEDGE OR SUSPICION OF ERROR DOES NOT RESULT IN BINDING CONTRACT. SEE COMP. GEN. DECS. CITED.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED MAY 12, 1970, RECEIVED ON MAY 20, 1970, FROM THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY, HEADQUARTERS, CAMERON STATION, ALEXANDRIA, VIRGINIA, RECOMMENDING RESCISSION OF CONTRACT NO. 11-0083-184 AWARDED TO L.H. BROWN CO. (BROWN) UNDER SURPLUS SALE NO. 11-0083, BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA.

THE RECORD DISCLOSES THAT THE INVITATION COVERED THE SALE OF VARIOUS ITEMS OF GOVERNMENT SURPLUS PROPERTY, CONSISTING OF MACHINE TOOLS AND SHOP EQUIPMENT. SUBSEQUENT TO BID OPENING ON JANUARY 20, 1970, BROWN WAS MAILED A NOTICE OF AWARD AS HIGH BIDDER FOR ITEM 193 AT $800 AND ITEM 244 AT $1,000, A POSITIONER AND GRINDING MACHINE, RESPECTIVELY. ON JANUARY 29, 1970, OR SUBSEQUENT TO AWARD, A REPRESENTATIVE OF BROWN INFORMED THE CONTRACTING OFFICER, BY TELEPHONE, THAT THE COMPANY HAD MADE AN ERROR IN BID. SPECIFICALLY, BROWN ADVISED THAT ITS BIDS ON ITEMS 193 AND 244 HAD BEEN INTENDED FOR ITEMS 194 AND 295 RESPECTIVELY, BOTH LATHE ENGINES.

BROWN FORWARDED ITS CATALOGUE AND WORKSHEETS TO THE CONTRACTING OFFICER AS DOCUMENTARY EVIDENCE IN SUPPORT OF THE ERROR. THIS EVIDENCE SUBSTANTIATED THE ACTUAL INTENTIONS OF THE BIDDER AS ALLEGED AND CONFIRMED THE MISTAKE WHICH OCCURRED BY REASON OF ERRORS IN TRANSCRIPTION OF PRICES FROM THE WORKSHEETS AND CATALOGUE TO THE BID FORM.

THE SALES CONTRACTING OFFICER REPORTS THAT, SUBSEQUENT TO BID OPENING, SHE SUSPECTED THAT BROWN HAD SUBMITTED ERRONEOUS BIDS ON ITEMS 193 AND 244 SINCE ITS BID PRICES WERE SUBSTANTIALLY HIGHER THAN THE OTHER BIDS RECEIVED ON THE ITEMS WHICH WERE WITHIN THE ACCEPTABLE RANGE OF CURRENT MARKET APPRAISALS. IN FACT, SHE HAD MADE A NOTATION ON THE BID ABSTRACT TO REQUEST VERIFICATION OF BROWN'S BIDS ON THE TWO ITEMS. APPARENTLY, DUE TO AN UNINTENTIONAL OVERSIGHT, THE CONTRACTING OFFICER DID NOT REQUEST VERIFICATION FROM BROWN, AND THE AWARD NOTICE TO BROWN WAS MAILED ALONG WITH THE AWARD NOTICES TO THE OTHER AWARDEES. CURRENT MARKET APPRAISALS OF $250 FOR ITEM 193 AND $150 FOR ITEM 244, $1,000 FOR ITEM 194 AND $1,500 FOR ITEM 295 HAD BEEN ESTABLISHED PRIOR TO INVITATION ISSUANCE. ALSO, THE BID ABSTRACT REVEALS THAT THE OTHER BIDS SUBMITTED ON ITEM 193 RANGED FROM $387 TO $150 WHILE OTHER BIDS ON ITEM 244 VARIED FROM $410 TO $51.99.

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 CONTRACTING OFFICER SHOULD HAVE SUSPECTED OR HAD REASON TO KNOW OF THE EXISTENCE OF THE ERROR PRIOR TO AWARD. COMP. GEN. 685, 686 (1958), AND CASES CITED THEREIN. IN THESE CIRCUMSTANCES, ACCEPTANCE OF THE BID BY A CONTRACTING OFFICER WITH KNOWLEDGE OR SUSPICION OF A BIDDER'S ERROR DOES NOT RESULT IN A VALID AND BINDING CONTRACT. B-167816, SEPTEMBER 19, 1969, AND CASES CITED THEREIN; 37 COMP. GEN. 706 (1958). SEE PARTICULARLY, B-144843, MARCH 9, 1961, WHERE AT BID OPENING ON A SALE, THE CONTRACTING OFFICER HAD DOUBTS ABOUT THE ACCURACY OF THE EXCESSIVELY HIGH BID PRICE SUBMITTED BY A BIDDER, BUT DID NOT VERIFY THE BID PRICE PRIOR TO AWARD.

IN VIEW OF THE CONTRACTING OFFICER'S STATEMENT THAT SHE SUSPECTED AN ERROR IN THE BID PRICES SUBMITTED BY BROWN ON ITEMS 193 AND 244 AND THAT SHE INTENDED TO REQUEST PRICE VERIFICATION PRIOR TO AWARD, TOGETHER WITH THE BIDDER'S EVIDENCE OF ERROR, THE CONTRACT MAY BE RESCINDED WITHOUT LIABILITY TO BROWN, AS ADMINISTRATIVELY RECOMMENDED.