B-171128, MAR 12, 1971

B-171128, MAR 12, 1971

BID PROTEST - MISTAKE IN BID DECISION DENYING REQUEST BY JOHN EPPLER MACHINE WORKS, INC., TO CORRECT ITS HIGH BIDS OF $38,259.11 AND $37,759.11 TO $28,259.11 AND $27,759.11 INCIDENT TO THE SALE OF GOVERNMENT OWNED INDUSTRIAL PLANT EQUIPMENT BY TELEDYNE RYAN AERONAUTICAL COMPANY, A GOVERNMENT CONTRACTOR. SINCE THE ONLY EVIDENCE OF THE INTENDED BID PRICE CONSISTS OF A SIGNED BID SHEET ON WHICH THE INITIAL FIGURE "2" IN THE BID PRICES OF $28,259.11 AND $27,759.11 APPEAR TO HAVE BEEN INSERTED OVER ERASURES AND SINCE THERE ARE NO WORKSHEETS OR DOCUMENTATION, OTHER THAN A SECRETARY'S STATEMENT THAT THERE WAS A CLERICAL ERROR, TO SUPPORT THE CONCLUSION THAT THE UNERASED BID PRICES WERE NOT, IN FACT, THE INTENDED BID PRICE, THE COMP. GEN. IS UNABLE TO CONCLUDE THAT THE BID PRICES MAY BE CORRECTED TO THE PRICES REQUESTED. HOWEVER, PROTESTANT MAY WITHDRAW ITS BID AND TELEDYNE SHOULD BE DIRECTED TO READVERTISE.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTERS DATED NOVEMBER 24 AND 27, 1970, AND FEBRUARY 8, 1971, WITH ENCLOSURES, REFERENCE DSAH-G, FROM YOUR ASSISTANT COUNSEL RELATIVE TO THE MISTAKE IN BID ALLEGED BY THE JOHN EPPLER MACHINE WORKS, INC. (EPPLER), UNDER PLANT CLEARANCE CASE NO. S0514A-3110E.

THE RECORD SHOWS THAT TELEDYNE RYAN AERONAUTICAL COMPANY (TELEDYNE), A GOVERNMENT CONTRACTOR, ISSUED A SOLICITATION FOR BIDS, NO. 348, ON SEPTEMBER 22, 1970, OFFERING FOR SALE THREE ITEMS OF GOVERNMENT OWNED INDUSTRIAL PLANT EQUIPMENT. EPPLER SUBMITTED BIDS ON TWO BULLARD BORING AND TURNING MACHINES, LISTED IN THE SOLICITATION AS ITEM NOS. 1 AND 2. BIDS WERE OPENED AT TELEDYNE ON OCTOBER 9, 1970, AND TEN BIDS WERE RECEIVED FOR ONE OR BOTH OF THE BULLARD MACHINES, RANGING FROM $3,618.00 TO $38,259.11 FOR ITEM 1 AND $3,618.00 TO $37,759.11 FOR ITEM 2. EPPLER WAS THE HIGH BIDDER FOR ITEMS 1 AND 2. THE NEXT HIGH BIDS FOR THESE ITEMS WERE $24,501.01 FOR ITEM 1 AND $24,601.01 FOR ITEM 2. THE GOVERNMENT'S PLANT CLEARANCE OFFICER PERSONALLY ATTENDED THE BID OPENING AND IN ACCORDANCE WITH USUAL PRACTICE, HE AFFIXED HIS APPROVAL SIGNATURE ON THE BID ABSTRACT, DD FORM 1501, WHICH SHOWED EPPLER TO BE THE HIGH BIDDER.

THE RECORD SHOWS THAT ON OCTOBER 13, 1970, MR. BARRY OF RYAN, ACTING ON BEHALF OF THE GOVERNMENT, CALLED MR. SCHNABL, PRESIDENT OF EPPLER, AND ADVISED HIM THAT HE WAS THE "HIGH BIDDER." MR. BARRY HAS STATED THAT A DISCUSSION THEN ENSUED AS TO THE PRICE DIFFERENTIAL BETWEEN THE EPPLER BIDS AND THE SECOND HIGH BIDS FOR THE ITEMS. MR. SCHNABL STATED TO MR. BARRY THAT THE SECOND HIGH BIDDER HAD CALLED HIM AND ADVISED, IN PART, THAT HE WAS PAYING TOO MUCH FOR THE MACHINES. THEREAFTER MR. SCHNABL ALLEGED THAT IN PREPARING THE BID ON OCTOBER 2 HIS SECRETARY ENTERED INCORRECT PRICES ON THE BID FORM FOR EACH ITEM, MAKING EACH EXACTLY $10,000 HIGHER THAN HE ACTUALLY INTENDED TO BID. IN A LETTER TO THIS OFFICE, DATED OCTOBER 22, MR. SCHNABL STATES THAT AFTER SIGNING THE ERRONEOUSLY PREPARED BID FORM AND REQUESTING HIS SECRETARY TO MAKE PHOTOCOPIES OF THE BID, HE BECAME CONSCIOUS OF THE ERROR AND HE IMMEDIATELY DIRECTED HER TO MAKE THE NECESSARY CORRECTIONS, BUT NOT BEFORE SHE HAD ALREADY MADE PHOTOCOPIES OF THE ERRONEOUS BID. HE STATES THAT HIS SECRETARY THEN CORRECTED THE BID FORM WHICH MR. SCHNABL HAD ACTUALLY SIGNED BUT PLACED A PHOTOCOPY OF THE ERRONEOUSLY PREPARED BID IN THE ENVELOPE FOR MAILING TO TELEDYNE. MR. SCHNABL'S SECRETARY HAS SUBMITTED A DULY SWORN STATEMENT THAT THE ERROR WAS MADE AS DESCRIBED IN THE LETTER OF OCTOBER 22. MR. SCHNABL'S LETTER ALSO EXPLAINS THAT HE BELIEVED THAT THE BID WAS REQUIRED TO BE PLACED IN THE MAILS BY NOON ON OCTOBER 2 AND THEREFORE WAS PRESSED FOR TIME. WHILE THE EVIDENCE SHOWS THAT HIS BID WAS ACTUALLY MAILED ON THAT DATE, THERE IS NO APPARENT REASON WHY MR. SCHNABL SHOULD HAVE FELT PRESSURED SINCE THE UNAMENDED BID FORM IN MR. SCHNABL'S POSSESSION REQUIRED RECEIPT OF THE BID BY TELEDYNE BEFORE NOON ON OCTOBER 2 AND THERE WAS NO WAY HIS BID COULD HAVE BEEN TIMELY DELIVERED BY MAIL. (THE RECORD SHOWS THAT EPPLER WAS NOT ON THE BIDDERS LIST FOR THIS SOLICITATION AND MR. SCHNABL STATES THAT, HAVING OBTAINED A COPY FROM ANOTHER SOURCE, HE WAS NOT AWARE AT THE TIME HE SUBMITTED HIS BID THAT THE BIDDING TIME HAD BEEN EXTENDED TO OCTOBER 9).

AT THE OUTSET IT SHOULD BE NOTED THAT THE EVIDENCE OF RECORD DOES NOT CLEARLY SUPPORT A CONCLUSION THAT THE EPPLER BID WAS ACCEPTED PRIOR TO THE ALLEGATION OF ERROR BY MR. SCHNABL. ACCORDINGLY, ALL FACTS SUBSEQUENTLY DEVELOPED SHOULD BE CONSIDERED IN THIS RESOLUTION OF THE MATTER. RUGGIERO V UNITED STATES, 420 F 2D 709 (1970).

THE FACT THAT MR. SCHNABL'S SECRETARY PREPARED FOR MAILING A COPY OF THE BID WHICH SHOULD NOT HAVE BEEN SENT IS, WE BELIEVE, CLEARLY ESTABLISHED SINCE THE BID RECEIVED BY TELEDYNE WAS A PHOTOCOPY RATHER THAN THE ONE BEARING MR. SCHNABL'S PEN AND INK SIGNATURE. WE BELIEVE THIS FACT AND THE SECRETARY'S SWORN STATEMENT OF HER CLERICAL ERROR IN THE BID PRICE, SUPPORT A CONCLUSION THAT THE BID SUBMITTED WAS IN ERROR.

MR. SCHNABL'S LETTER OF OCTOBER 22 REQUESTS THAT THE GOVERNMENT ACCEPT HIS CORRECTED BIDS FOR THE MACHINERY SINCE HE BELIEVES THE PRICES AS SUBMITTED ARE GROSSLY AND OBVIOUSLY IN ERROR AND, IN ANY EVENT, THE ALTERED BIDS LEAVE THE GOVERNMENT WITH A MARGIN OF NEARLY $7,000 ABOVE THE NEXT HIGHEST BIDDER FOR THE MACHINERY. IN THIS CONNECTION, IT HAS CONSISTENTLY BEEN THE POSITION OF THIS OFFICE THAT CORRECTION OF AN ERRONEOUS BID PRICE SHOULD NOT BE PERMITTED UNLESS THERE IS CLEAR AND CONVINCING EVIDENCE AS TO THE INTENDED BID PRICE. TO THE SAME EFFECT, SEE ASPR 2-406.3(A)(4). SINCE THE ONLY EVIDENCE OF THE INTENDED BID PRICE IN THE INSTANT CASE CONSISTS OF A SIGNED BID SHEET ON WHICH THE INITIAL FIGURE "2" IN THE BID PRICES OF $28,259.11 AND $27,759.11 APPEAR TO HAVE BEEN INSERTED OVER ERASURES, AND SINCE THERE ARE NO WORKSHEETS OR DOCUMENTATION, OTHER THAN THE STATEMENTS OF MR. SCHNABL AND HIS SECRETARY, TO SUPPORT A CONCLUSION THAT THE UNERASED BID PRICES WERE NOT, IN FACT, THE INTENDED BID PRICES, WE ARE UNABLE TO CONCLUDE THAT THE BID PRICES MAY BE CORRECTED TO THE PRICES REQUESTED BY THE BIDDER.

FOR THE REASONS STATED WE AGREE WITH THE RECOMMENDATION OF YOUR ASSISTANT COUNSEL THAT EPPLER SHOULD NOT BE PERMITTED TO CORRECT ITS BID, BUT SHOULD BE PERMITTED TO WITHDRAW ITS BID, AND THAT TELEDYNE SHOULD BE DIRECTED TO READVERTISE FOR BIDS ON THE TWO MACHINES.