B-170563, AUG. 24, 1970

B-170563: Aug 24, 1970

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ALLEGED THAT HE HAD BID ON DESSERT FORKS ON BASIS OF 12 TO A BOX RATHER THAN 24 AND REVIEW OF BIDS INDICATES THAT BID WAS UNUSUALLY LOW WHEN COMPARED TO THE NEXT LOW BID AND PRICE ON PREVIOUS PROCUREMENT MAY HAVE CONTRACT RESCINDED AND DEFAULT TERMINATION CANCELLED SINCE RECORD SUPPORTS THAT CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR AND REQUESTED VERIFICATION. KUNZIG: REFERENCE IS MADE TO LETTER DATED AUGUST 10. REQUESTING A DECISION REGARDING AN ERROR JANOSKO FOOD EQUIPMENT CORPORATION ALLEGES IT MADE IN ITS BID ON WHICH REQUIREMENTS CONTRACT GS- 07S-13750 IS BASED. THE BIDS PER BOX FROM THE OTHER BIDDERS WERE IN THE AMOUNTS OF $5.69 AND $7.34. AWARD WAS MADE TO JANOSKO ON JUNE 30.

B-170563, AUG. 24, 1970

CONTRACTS -- MISTAKES CONTRACTOR WHO, AFTER AWARD OF CONTRACT, ALLEGED THAT HE HAD BID ON DESSERT FORKS ON BASIS OF 12 TO A BOX RATHER THAN 24 AND REVIEW OF BIDS INDICATES THAT BID WAS UNUSUALLY LOW WHEN COMPARED TO THE NEXT LOW BID AND PRICE ON PREVIOUS PROCUREMENT MAY HAVE CONTRACT RESCINDED AND DEFAULT TERMINATION CANCELLED SINCE RECORD SUPPORTS THAT CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR AND REQUESTED VERIFICATION.

TO MR. KUNZIG:

REFERENCE IS MADE TO LETTER DATED AUGUST 10, 1970, FROM THE GENERAL COUNSEL, REQUESTING A DECISION REGARDING AN ERROR JANOSKO FOOD EQUIPMENT CORPORATION ALLEGES IT MADE IN ITS BID ON WHICH REQUIREMENTS CONTRACT GS- 07S-13750 IS BASED.

IN RESPONSE TO AN INVITATION FOR BIDS COVERING DESSERT FORKS PACKED 24 TO A BOX, JANOSKO BID $2.89 PER BOX. THE BIDS PER BOX FROM THE OTHER BIDDERS WERE IN THE AMOUNTS OF $5.69 AND $7.34. AWARD WAS MADE TO JANOSKO ON JUNE 30, 1969, AS THE LOWEST BIDDER.

SUBSEQUENTLY, PURCHASE ORDERS WERE ISSUED TO THE CONTRACTOR FOR VARIOUS NUMBERS OF BOXES OF FORKS. HOWEVER, THE CONTRACTOR DECLINED TO PERFORM AT ITS BID PRICE AND THE PURCHASE ORDERS WERE TERMINATED FOR DEFAULT.

THE CONTRACTOR REFUSED TO DELIVER THE FORKS BECAUSE IT CONTENDS THAT IT MADE AN ERROR IN ITS BID IN THAT IT BASED ITS BID PRICE ON 12 FORKS TO A BOX INSTEAD OF 24.

THE CONTRACTING OFFICER AND THE GENERAL COUNSEL BOTH RECOMMEND THAT THE CONTRACT BE RESCINDED ON THE BASIS THAT THERE WAS CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THAT THE NEXT LOW BID WAS ABOUT 97 PERCENT HIGHER THAN THE LOW BID AND THE PREVIOUS CONTRACT PRICE WAS ABOUT 85 PERCENT HIGHER THAN THE LOW BID.

WHERE A MISTAKE IN BID IS ALLEGED AFTER AWARD OF A CONTRACT, OUR OFFICE WILL GRANT RELIEF IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. INASMUCH AS THE JANOSKO BID IS UNUSUALLY LOW WHEN COMPARED WITH THE NEXT LOW BID AND THE PRICE ON THE PREVIOUS PROCUREMENT, THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE LOW BID BEFORE ACCEPTING IT.

ACCORDINGLY, THE CONTRACT AND THE DEFAULT TERMINATIONS SHOULD BE CANCELED WITHOUT LIABILITY TO JANOSKO.

THE ENCLOSURES ACCOMPANYING THE AUGUST 10 LETTER ARE RETURNED AS REQUESTED.