B-171841, MAR 26, 1971

B-171841: Mar 26, 1971

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THE GOVERNMENT ESTIMATE WHICH WAS $60 GREATER THAN PROTESTANT'S BID WAS BASED IN PART. THEREFORE PROTESTANT'S BID SHOULD HAVE BEEN COMPARED WITH THE FOURTH LOWEST BIDDER'S RESPONSIVE PROPOSAL. IT IS THE OPINION OF THE COMP. THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR IN BID AND THE PROTESTANT'S BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. SECRETARY: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 2. TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. 14-06-100-6879 IS BASED. AWARD WAS MADE TO PERINE ON NOVEMBER 6. WHICH ASKED FOR PRICES ON CERTAIN ACCESSORIES WHICH WERE NOT LISTED IN PERINE'S ORDER. 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.

B-171841, MAR 26, 1971

BID PROTEST - MISTAKE IN BID DECISION ALLOWING CANCELLATION OF A CONTRACT FOR TWO CUTOFF SAWS AWARDED TO PERINE MACHINERY & SUPPLY CO., DUE TO A MISTAKE IN BID. THE GOVERNMENT ESTIMATE WHICH WAS $60 GREATER THAN PROTESTANT'S BID WAS BASED IN PART, ON THE NONRESPONSIVE THIRD LOWEST BIDDER'S INFORMAL QUOTATIONS. THEREFORE PROTESTANT'S BID SHOULD HAVE BEEN COMPARED WITH THE FOURTH LOWEST BIDDER'S RESPONSIVE PROPOSAL. IN VIEW OF THE SUBSTANTIAL DIFFERENCE IN BID PRICES, IT IS THE OPINION OF THE COMP. GEN. THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR IN BID AND THE PROTESTANT'S BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. ACCORDINGLY THE CONTRACT MAY BE CANCELLED WITHOUT LIABILITY.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 2, 1971, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY PERINE MACHINERY & SUPPLY CO., INC., TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. 14-06-100-6879 IS BASED.

THE REGIONAL OFFICE, REGION 1, BUREAU OF RECLAMATION, BOISE, IDAHO, BY SOLICITATION NO. 100-1581 REQUESTED BIDS FOR FURNISHING TWO CUTOFF SAWS AND FOR THE PURCHASE OR TRADE-IN OF TWO USED POWERSAWS. THE SPECIFICATIONS FOR THE NEW CUTOFF SAWS REQUIRED THAT A DUST COLLECTOR AND FUME EXHAUSTER, A HOOD, AND 120-VOLT PUSHBUTTON CONTROL BE FURNISHED. RESPONSE, PERINE MACHINERY & SUPPLY CO., INC., THE LOWEST RESPONSIVE BIDDER, SUBMITTED A BID OFFERING TO FURNISH THE TWO CUTOFF SAWS FOR $2,170 EACH OR FOR A TOTAL PRICE OF $4,340. PERINE ALSO OFFERED A DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 30 DAYS AND A TRADE-IN ALLOWANCE OF $375 FOR THE TWO USED POWERSAWS. AWARD WAS MADE TO PERINE ON NOVEMBER 6, 1970, IN THE AMOUNT OF $3,965.

ON DECEMBER 2, 1970, EVERETT INDUSTRIES, INC., THE CUTOFF SAW MANUFACTURER, WROTE TO PERINE REQUESTING IT TO CHECK THE SPECIAL ACCESSORIES REQUIRED BY THE SOLICITATION BECAUSE IT HAD RECEIVED SIMILAR REQUEST FOR QUOTATION DATED OCTOBER 5, 1970, FROM THE BUREAU OF RECLAMATION, WHICH ASKED FOR PRICES ON CERTAIN ACCESSORIES WHICH WERE NOT LISTED IN PERINE'S ORDER. THE SUPPLIER POINTED OUT THAT THE BUREAU HAD ASKED FOR PRICES ON A 120-VOLT PUSHBUTTON CONTROL, A DUST COLLECTOR AND FUME EXHAUSTER, A HOOD, AND VARIOUS TYPES OF ABRASIVE WHEELS.

IN A LETTER DATED DECEMBER 7, 1970, PERINE ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD FAILED TO INCLUDE THE COST OF TWO 120-VOLT PUSHBUTTON CONTROLS, TWO DUST COLLECTORS AND FUME EXHAUSTERS, AND TWO HOODS, OTHERWISE REQUIRED BY THE SOLICITATION. THE CORPORATION REQUESTED THAT THE CONTRACT PRICE BE INCREASED BY $1,150 TO COVER THE COST OF THE OMITTED ACCESSORIES, OR IN THE ALTERNATIVE, THAT THE CONTRACT BE CANCELED WITHOUT LIABILITY.

IN SUPPORT OF ITS ALLEGATION OF ERROR, PERINE SUBMITTED BY LETTER DATED DECEMBER 16, 1970, A COPY OF EVERETT'S PRINTED PRICE LIST AND A COPY OF A LETTER DATED DECEMBER 2, 1970, WHICH IT HAD RECEIVED FROM EVERETT.

WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF THE 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. B-170941, DECEMBER 15, 1970; B-168895, FEBRUARY 12, 1970; B 167745, SEPTEMBER 2, 1969; B-167031, JUNE 16, 1969; 37 COMP. GEN. 685 (1958).

THE ABSTRACT OF BIDS SHOWS THAT SEVEN BIDS, AFTER CONSIDERATION OF DISCOUNT, TRADE-IN ALLOWANCES, AND CASH BIDS FOR THE USED POWERSAWS, RANGED FROM $3,279 TO $7,062.60 AND THAT THE LOWEST BID WAS REJECTED BECAUSE IT FAILED TO MEET THE ADVERTISED SPECIFICATIONS. IT ALSO SHOWS THAT PERINE SUBMITTED THE NEXT LOWEST BID IN THE NET AMOUNT OF $3,921.60 (AFTER DEDUCTION OF DISCOUNT). IN HIS REPORT THE CONTRACTING OFFICER DOES NOT ADMIT THAT HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF PERINE. THE CONTRACTING OFFICER STATES THAT HE DID NOT SUSPECT AN ERROR IN PERINE'S BID PRIOR TO AWARD BECAUSE THE BID, WITHOUT TRADE-IN ALLOWANCE, WAS ONLY $60 LESS THAN THE AMOUNT OF THE GOVERNMENT ESTIMATE ($4,400) AND ONLY 12.5 PERCENT LOWER THAN THE THIRD LOWEST BID. HOWEVER, THE ABSTRACT OF BIDS ALSO SHOWS THAT NORTHWEST OXYGEN CO., THE THIRD LOWEST BIDDER, DEVIATED FROM THE SPECIFICATIONS IN CERTAIN RESPECTS AND WE HAVE BEEN INFORMALLY ADVISED BY THE CONTRACTING OFFICER THAT SUCH DEVIATIONS RENDERED THE BID NONRESPONSIVE.

THE CONTRACTING OFFICER HAS FURTHER ADVISED THAT THE GOVERNMENT ESTIMATE OF $4,400 WAS BASED, IN PART, ON AN INFORMAL QUOTATION RECEIVED FROM NORTHWEST OXYGEN, THE NONRESPONSIVE BIDDER, PRIOR TO THE ISSUANCE OF THE SOLICITATION. WE BELIEVE, THEREFORE, THAT THE BID OF PERINE SHOULD HAVE BEEN COMPARED WITH THE BID OF THE FOURTH LOWEST RESPONSIVE BIDDER, STAR MACHINERY CO., WHICH QUOTED A NET PRICE OF $5,190 FOR THE CUTOFF SAWS. VIEW OF THE SUBSTANTIAL PRICE DIFFERENCE BETWEEN THE RESPONSIVE BID OF STAR MACHINERY CO. AND PERINE'S NET BID, IT IS OUR OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR IN BID AND, CONSEQUENTLY, THE BID OF PERINE SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. B-170780, OCTOBER 5, 1970.