B-171230, JAN 4, 1971

B-171230: Jan 4, 1971

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WHERE THE MISTAKE IN BID IS ESTABLISHED BY CLEAR AND CONVENCING EVIDENCE AND WAS APPARENTLY THE RESULT OF AN ERROR BY WESTERN UNION IN TRANSMITTING PROTESTANT'S TELEGRAPHIC MODIFICATION. THE CONTRACTING OFFICER SHOULD HAVE REQUESTED A BID VERIFICATION AND IN VIEW OF A TELEPHONE CONVERSATION BETWEEN PROTESTANT AND THE CONTRACTING OFFICER. HE WAS ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID. BIDS WERE OPENED ON AUGUST 13. IT WAS FOUND THAT BIDS SUBMITTED BY JACK LUBIN (FORMERLY CALIFORNIA TRUCK PARTS) CONSISTED OF THREE PAGES OF BIDS AND INCLUDED A TELEGRAPHIC CHANGE WHICH READS. THE CONTRACTING OFFICER REPORTS THAT WHEN THE BIDS WERE BEING READ HE INTERPRETED THE TELEGRAPHIC CHANGE TO READ "RAISE ITEMS 230 THROUGH 236 TO $.761 EACH" BECAUSE THE BID RECORDING SERVICES BOTH RECORDED IT AS $.761 EACH.

B-171230, JAN 4, 1971

BID PROTEST - MISTAKE IN BID DECISION ACCEPTING MISTAKE IN BID BY JACK LUBIN (FORMERLY CALIFORNIA TRUCK PARTS) ON SALES INVITATION FOR QUANTITIES OF "SHAFT, STARTER DRIVE - LIGHTS" ADVERTISED BY THE DEFENSE SUPPLY AGENCY. WHERE THE MISTAKE IN BID IS ESTABLISHED BY CLEAR AND CONVENCING EVIDENCE AND WAS APPARENTLY THE RESULT OF AN ERROR BY WESTERN UNION IN TRANSMITTING PROTESTANT'S TELEGRAPHIC MODIFICATION, THE CONTRACTING OFFICER SHOULD HAVE REQUESTED A BID VERIFICATION AND IN VIEW OF A TELEPHONE CONVERSATION BETWEEN PROTESTANT AND THE CONTRACTING OFFICER, HE WAS ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID. THEREFORE GAO HAS NO OBJECTION TO THE CORRECTION OF THE BID TO EQUAL THE RETURN FROM THE HIGH ALL-OR-NONE BID.

TO GENERAL HEDLUND:

WE REFER TO A LETTER DATED NOVEMBER 3, 1970, FROM MISS SARAH F. WILLIAMS, ASSISTANT GENERAL COUNSEL, TRANSMITTING FOR OUR DECISION A CLAIM OF MISTAKE IN BID AFTER AWARD BY MR. JACK LUBIN ON ITEMS 231 THROUGH 236 OF SALES CONTRACT 41-1007-078.

ITEMS 230 THROUGH 236 OF THE SALES INVITATION COVERED VARIOUS QUANTITIES OF "SHAFT, STARTER DRIVE: AUTO-LIGHT P/N EBA 4611." BIDS WERE OPENED ON AUGUST 13, 1970, AND IT WAS FOUND THAT BIDS SUBMITTED BY JACK LUBIN (FORMERLY CALIFORNIA TRUCK PARTS) CONSISTED OF THREE PAGES OF BIDS AND INCLUDED A TELEGRAPHIC CHANGE WHICH READS, IN PERTINENT PART, AS FOLLOWS:

"SALE 1007 AUGUST 12 1970 RAISE ITEMS 223 THR 229 TO 2.79 EACH ANY OR ALL RAISE ITEMS 230 THRU 236 $.76 AND ONE MILL EACH ANY OR ALL." IN HIS ORIGINAL BID MR. LUBIN HAD BID $.689 EACH FOR ITEMS 230 THROUGH 232 AND $.568 EACH FOR ITEMS 233 THROUGH 236.

THE CONTRACTING OFFICER REPORTS THAT WHEN THE BIDS WERE BEING READ HE INTERPRETED THE TELEGRAPHIC CHANGE TO READ "RAISE ITEMS 230 THROUGH 236 TO $.761 EACH" BECAUSE THE BID RECORDING SERVICES BOTH RECORDED IT AS $.761 EACH. (THIS INTERPRETATION WAS ALSO IN ACCORDANCE WITH MR. LUBIN'S INTENT). HOWEVER, THE CONTRACT CLERK REVIEWING THE BIDS IN PREPARATION FOR KEY PUNCHING MADE THE CHANGE WITHOUT THE PREPOSITION "TO" JUST AS IT WAS RECEIVED. THIS RESULTED IN THE BIDS FOR ITEMS 230 THROUGH 232 BEING RAISED TO $1.45 AND ITEMS 233 THROUGH 236 BEING RAISED TO $1.329. ON THIS BASIS, MR. LUBIN WAS HIGH BIDDER ON ALL ITEMS 230 THROUGH 236. THE BID ABSTRACT SHOWS THE FOLLOWING UNIT BIDS ON THE ITEMS INVOLVED:

ITEM 230 ITEM 231 ITEM 232ITEM 233 ITEM 234 ITEM 235 ITEM 236

$1.45 $1.45 $1.45 $1.329 $1.329 $1.329 $1.329

1.026 .72 .72 .72 .72 .72 .72

.72 .636 .636 .636 .636 .636 .636

.55 .535 .555 .585 .535 .535 .585

.43 .43 .43 .43 .43 .43 .431

.42 .42 .42 .42 .381 .43

.026 .048 .381

.10

.018

IT IS FURTHER REPORTED BY THE CONTRACTING OFFICER THAT WHEN THE ABSTRACT AND NOTICES OF AWARDS WERE RECEIVED FROM THE COMPUTER, IT WAS FOUND THAT MR. LUBIN'S BID DEPOSIT WAS SHORT BY MORE THAN $600. THIS RESULTED IN ELIMINATING SEVERAL ITEMS FROM THE CONTRACT BEFORE THE AWARDS WERE MADE. PRIOR TO A DETERMINATION AS TO THE SPECIFIC ITEMS WHICH WOULD BE ELIMINATED FROM THE CONTRACT, THE CONTRACTING OFFICER CALLED MR. LUBIN ON ANOTHER SUBJECT. DURING THIS TELEPHONE CONVERSATION, THE CONTRACTING OFFICER MENTIONED THAT MR. LUBIN'S BID DEPOSIT WAS "SHORT" AND HE WOULD NOT BE AWARDED SEVERAL ITEMS. MR. LUBIN STATED THAT HIS BID DEPOSIT COULD NOT BE LACKING VERY MUCH BECAUSE HE WAS NOT AWARDED THE "BIG" ITEMS. THAT TIME, STATES THE CONTRACTING OFFICER, HE WAS AWARE THAT THERE WOULD BE SEVERAL ITEMS DENIED MR. LUBIN OF THE MANY ON WHICH HE HAD MADE BIDS BECAUSE OF THE DEFICIENCY IN THE DEPOSIT AND THIS SHOULD HAVE INDICATED TO HIM THAT SOMETHING WAS AMISS AND NEEDED CLARIFICATION.

THEREAFTER, ON AUGUST 20, 1970, MR. LUBIN ADVISED THE CONTRACTING OFFICER THAT HE HAD MADE AN ERROR IN AWARDING HIM ITEMS 231 THROUGH 236 (ITEM 230 HAVING BEEN DELETED BECAUSE OF THE INSUFFICIENT BID DEPOSIT), AT THE PRICES INDICATED IN THE NOTICE OF AWARD. MR. LUBIN STATED THAT HIS PRICES ON ITEMS 230 THROUGH 236 WERE CHANGED FROM THE ORIGINAL BID TO $.761 EACH BY THE TELEGRAPHIC CHANGE.

IT IS REPORTED THAT IF MR. LUBIN'S BIDS HAD BEEN CONSIDERED AS HE IS CLAIMING (I.E. $.761 EACH) AN ALL-OR-NONE BID OF $7,566.14 BY ANOTHER BIDDER WOULD HAVE BEEN HIGH BY $144.38. HOWEVER, UNDER THE PRICES ACTUALLY AWARDED TO MR. LUBIN THE ALL-OR-NONE BID WAS NOT HIGH. CORRECTION OF THE BID TO EQUAL THE RETURN FROM THE HIGH ALL-OR-NONE BID WOULD INCREASE THE PRICE OF ITEMS 231 THROUGH 236 TO $.7762 EACH OR $144.38. WE ARE ADVISED THAT MR. LUBIN WILL PAY THIS HIGHER PRICE IF THE CORRECTION IS ALLOWED.

THE ESTABLISHED RULE REGARDING THE CORRECTION OF MISTAKES IN BIDS AFTER AN AWARD HAS BEEN MADE IS THAT THE BIDDER MUST BEAR THE CONSEQUENCES OF THE ERROR UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER ACCEPTING THE BID WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. B-160226, NOVEMBER 3, 1966. FROM THE EVIDENCE PRESENTED, WE AGREE WITH THE CONTRACTING OFFICER'S CONCLUSION THAT A MISTAKE WAS, IN FACT, MADE. THE EVIDENCE OF ERROR AND THE BID INTENDED IS CLEAR AND CONVINCING. THIS MISTAKE WAS APPARENTLY THE RESULT OF AN ERROR BY WESTERN UNION IN TRANSMITTING MR. LUBIN'S TELEGRAPHIC MODIFICATION. WE ARE ALSO IN AGREEMENT WITH THE CONTRACTING OFFICER'S CONCLUSION THAT HE SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO MAKING AWARD IN VIEW OF THE TELEPHONE CONVERSATION HE HAD WITH MR. LUBIN AFTER BID OPENING BUT PRIOR TO AWARD. UNDER THESE CIRCUMSTANCES THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE ERROR IN BID AND WE WOULD NOT OBJECT TO CORRECTION OF THE BID TO EQUAL THE RETURN FROM THE HIGH ALL-OR-NONE BID ON ITEMS 231 THROUGH 236.