B-169889, JUN. 23, 1970

B-169889, JUN. 23, 1970

SALES--BIDS--MISTAKES--CONTRACTING OFFICER'S ERROR DETECTION DUTY--ERROR VERIFICATION REQUIREMENT WHERE BID OF $0.1319 PER POUND ALLEGEDLY INTENDED FOR ITEM 36, WEIGHT 30,000 POUNDS, BUT SUBMITTED FOR ITEM 30, WEIGHT 27,862 POUNDS, WAS SUBSTANTIALLY HIGHER THAN NEXT HIGH BID OF $0.02015 AND CURRENT MARKET APPRAISAL OF $0.015, VENDEE'S REQUEST FOR RELIEF BY DELETION OF ITEM 30 IS ALLOWED, NOTWITHSTANDING FACT THAT CONTRACTING OFFICER VERIFIED UNIT PRICE, SINCE GOVERNMENT MAY NOT CONSIDER UNIT PRICE BID WHICH IS SUBSTANTIALLY DIFFERENT FROM TOTAL BID PRICE WITHOUT VERIFICATION OF SAME, ALTHOUGH GENERALLY CONTRACT AWARD PREDICATED UPON BID VERIFICATION RESULTS IN BINDING CONTRACT. SEE COMP. GEN. DECS. CITED.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED MAY 21, 1970, FILE REFERENCE DSAH G, WITH ENCLOSURES, FROM MISS SARAH F. WILLIAMS, ASSISTANT COUNSEL, HEADQUARTERS, FORWARDING FOR OUR DECISION THE REQUEST OF H. KLAFF & CO; INC. (KLAFF), FOR RELIEF FROM A MISTAKE IN BID ON ITEM 30 ALLEGED AFTER AWARD OF SURPLUS SALES CONTRACT NO. 11-0099-074.

IT IS REPORTED THAT THE SUBJECT CONTRACT, COVERING ITEMS NOS. 6 AND 30 OF SALES INVITATION NO. 11-0099, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE PERSONNEL SUPPORT CENTER, PHILADELPHIA, PENNSYLVANIA, WAS AWARDED TO KLAFF ON MARCH 20, 1970. KLAFF CONTENDS THAT ITS BID OF $0.1319 PER POUND WAS INTENDED FOR ITEM 36 AND NOT ITEM 30. ITEMS 30 AND 36 WERE DESCRIBED IN THE INVITATION AS FOLLOWS:

"30. ELECTRONIC SCRAP: INCLUDING SUPPORTS, CASES, HORNS, ARC LIGHTS, DUMMY LOADS, POWER SUPPLIES, MOTOR GENERATORS, GENERATORS, LEVERS, TEST SETS, TRANSFORMERS, TRANSMITTERS, TELEPHONES, DIALS, MODIFICATION KITS, TERMINAL BOARDS, SWITCHES, DYNAMOTORS, TUNERS, FILTERS, GONIDMETERS, POWER SUPPLIES, AMPLIFIERS, ANTENNAS, COILS, KEYERS, POWER PANELS, AND OTHER ITEMS. OUTSIDE - UNDER TARPAULINS, IN WOODEN BOXES AND CARTONS WHICH ARE INCLUDED IN THE TOTAL WEIGHT AND SALE.

27,862 POUND

"36. STAINLESS STEEL, MAGNETIC AND NON-MAGNETIC SCRAP: INCLUDING GALLEY EQUIPMENT, REFRIGERATORS, SODA FOUNTAIN AND OTHER ITEMS. WITH FOREIGN ATTACHMENTS. OUTSIDE

30,000 POUND"

AFTER BIDS WERE OPENED ON MARCH 17, 1970, IT WAS NOTED BY THE SALES CONTRACTING OFFICER PRIOR TO AWARD THAT THE BID ($0.1319) RECEIVED FOR ITEM 30 FROM KLAFF WAS SUBSTANTIALLY HIGHER THAN THE NEXT HIGH BID ($0.02015) AND THE CURRENT MARKET APPRAISAL ($0.015). THEREFORE, THE SALES CONTRACTING OFFICER CALLED KLAFF TO VERIFY ITS BID ON ITEM 30. MR. MORTON PLANT, THE PARTY WHO SIGNED THE BID, STATED KLAFF'S BID ON ITEM 30 WAS $0.1319 PER POUND. THEREAFTER, ON MARCH 20, 1970, ITEM 30 WAS AWARDED TO KLAFF. SUBSEQUENTLY, BY LETTER OF MARCH 25, 1970, KLAFF ALLEGED THAT IT HAD ERRED IN BIDDING ON ITEM 30 AND THE BID WAS INTENDED FOR ITEM 36.

AS WAS STATED, THE SALES CONTRACTING OFFICER SOUGHT VERIFICATION WHEN HE NOTED THAT KLAFF'S HIGH BID ON ITEM 30 SUBSTANTIALLY EXCEEDED THE NEXT HIGH BID AND THE CURRENT MARKET APPRAISAL. HOWEVER, KLAFF'S BID ON ITEM 30, AS SUBMITTED, CONSISTED OF A UNIT PRICE OF $0.1319 AND A TOTAL EXTENDED PRICE OF $3,957. THE EXTENDED PRICE WAS COMPUTED ON THE BASIS OF AN ITEM CONTAINING 30,000 POUNDS, WHEREAS ITEM 30 WAS DESCRIBED AS CONTAINING 27,862 POUNDS. ITEM 36 WAS LISTED AS CONTAINING 30,000 POUNDS.

WHILE THE CONTRACTING OFFICER VERIFIED THE KLAFF BID WITH MR. PLANT REGARDING THE UNIT PRICE OF ITEM 30 WHICH HE SUSPECTED WAS IN ERROR, HE DID NOT INFORM THE BIDDER OF THE DISPARITY IN THE EXTENSION OF THE UNIT PRICE. IN THIS RESPECT, THE SALES CONTRACTING OFFICER STATES THAT HE DID NOT DISCUSS THE DISCREPANCY BETWEEN THE UNIT PRICE BID AND THE TOTAL PRICE BID ON ITEM 30 BECAUSE HE DID NOT NOTE SUCH OBVIOUS ERROR UNTIL AFTER THE AWARD WAS MADE AND MAILED TO KLAFF. IN VIEW OF THE DISPARITY BETWEEN THE UNIT PRICE AND THE TOTAL PRICE AND THE SALES CONTRACTING OFFICER'S FAILURE TO BRING SUCH ERROR TO THE ATTENTION OF THE BIDDER WHEN REQUESTING VERIFICATION, IT IS ADMINISTRATIVELY RECOMMENDED THAT ITEM 30 BE DELETED FROM CONTRACT 11-0099-074.

GENERALLY, THE AWARD OF A CONTRACT PREDICATED UPON A VERIFICATION OF THE BID BY THE CONTRACTING OFFICER RESULTS IN A BINDING CONTRACT. 18 COMP. GEN. 942 (1939); 27 ID. 17 (1947). BUT SEE, 44 COMP. GEN. 383 (1965) WHERE IT WAS HELD THAT:

" *** WHERE, AS HERE, THE BIDDER HAS NOT BEEN PLACED ON NOTICE OF THE NATURE AND EXTENT OF THE MISTAKE WHICH IS SUSPECTED, OUR OFFICE HAS RECOGNIZED AND FOLLOWED THE RULING IN UNITED STATES V METRO NOVELTY MANUFACTURING CO; 125 F. SUPP. 713, THAT REAFFIRMATION OF A BID, WHERE THE PLAINTIFF WAS NOT PLACED ON NOTICE OF THE MISTAKE WHICH THE GOVERNMENT SURMISED, DID NOT BAR THE DEFENSE OF RESCISSION." MOREOVER, OUR OFFICE WILL GRANT APPROPRIATE RELIEF, SUCH AS RESCISSION WITHOUT LIABILITY TO THE CONTRACTOR, WHERE A MISTAKE HAS BEEN ALLEGED SUBSEQUENT TO 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. 37 COMP. GEN. 685, 686 (1958).

WE AGREE WITH THE SALES CONTRACTING OFFICER AND YOUR ASSISTANT COUNSEL THAT THE EXISTENCE OF A MISTAKE WAS STILL APPARENT EVEN AFTER VERIFICATION OF THE BID BECAUSE THE DISPARITY BETWEEN THE UNIT AND TOTAL PRICES FOR ITEM 30 WAS NOT CALLED TO THE BIDDER'S ATTENTION WHEN THE REQUEST FOR VERIFICATION WAS MADE. SEE B-158207, JANUARY 14, 1966, AND CASES CITED THEREIN. IN THIS RESPECT, WE HAVE HELD THAT THE GOVERNMENT MAY NOT CONSIDER A UNIT PRICE BID WHICH IS SUBSTANTIALLY DIFFERENT FROM THE TOTAL BID PRICE WITHOUT VERIFICATION. 37 COMP. GEN. 829 (1958); B-168212, NOVEMBER 17, 1969. THEREFORE, THE BIDDER'S ATTENTION SHOULD HAVE BEEN CALLED TO THIS OBVIOUS ELEMENT OF ERROR IN ITS BID WHEN VERIFICATION WAS REQUESTED.

ACCORDINGLY, ITEM 30 MAY BE DELETED FROM THE SUBJECT CONTRACT, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO KLAFF.