B-172596, MAY 11, 1971

B-172596: May 11, 1971

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THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A POSSIBLE ERROR AND VERIFICATION SHOULD HAVE BEEN REQUESTED BEFORE AWARD. POSTMASTER GENERAL: REFERENCE IS MADE TO THE LETTER DATED APRIL 9. WHICH OCCURRED WHEN THE TWO ITEMS WERE INADVERTENTLY OMITTED FROM THE OFFER PRICE WORKSHEET. THE TWO ITEMS ARE INCLUDED AND PRICED ON THE MATERIAL COST SHEET. IT IS STATED THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR BECAUSE OF THE DIFFERENCE OF 34 PERCENT BETWEEN BETCO'S LOW PROPOSAL OF $4. 500 AND HE SHOULD HAVE REQUESTED VERIFICATION OF THE PROPOSAL SUBMITTED BY BETCO BEFORE AWARD. THE ONLY OTHER PROPOSAL SUBMITTED WAS IN THE AMOUNT OF $14. IT WAS STATED THAT A BIDDER WHO MAKES A MISTAKE IN BID WHICH HAS BEEN ACCEPTED IN GOOD FAITH MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF MISTAKE PRIOR TO AWARD.

B-172596, MAY 11, 1971

BID PROTEST - MISTAKE IN BID DECISION ALLOWING ADJUSTMENT TO A CONTRACT AWARDED TO BETCO ELECTRONICS FOR FIRE ALARM UNITS, DUE TO A MISTAKE IN BID OF $1,022.77. BECAUSE SUCCESSFUL BIDDER SUBMITTED A BID 34 PERCENT LOWER THAN THE NEXT LOW BID, THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A POSSIBLE ERROR AND VERIFICATION SHOULD HAVE BEEN REQUESTED BEFORE AWARD. THE PRICE OF THE CONTRACT MAY THEREFORE BE ADJUSTED TO PROVIDE FOR THE INCREASE REQUESTED.

TO MR. POSTMASTER GENERAL:

REFERENCE IS MADE TO THE LETTER DATED APRIL 9, 1971, FROM THE ASSISTANT GENERAL COUNSEL, REAL PROPERTY AND PROCUREMENT DIVISION, CONCERNING A MISTAKE IN AN OFFER ALLEGED BY BETCO ELECTRONICS AFTER AWARD ON NOVEMBER 10, 1970, OF CONTRACT 71-1-00489 FOR FIRE ALARM UNITS BY THE BUREAU OF FACILITIES, OFFICE OF PROCUREMENT, PURSUANT TO REQUEST FOR PROPOSAL NC-13- 71.

BY LETTER OF NOVEMBER 17, 1970, BETCO ALLEGED AN ERROR ON THE BASIS THAT IT OMITTED TWO ITEMS VALUED AT $1,022.77, NOT INCLUDING G&A AND PROFIT, FROM THE COMPANY'S PROPOSAL. TO SUBSTANTIATE THE ERROR, WHICH OCCURRED WHEN THE TWO ITEMS WERE INADVERTENTLY OMITTED FROM THE OFFER PRICE WORKSHEET, THE CONTRACTOR ENCLOSED WITH THE LETTER ITS MATERIAL COST SHEET AND OFFER PRICE WORKSHEET. THE TWO ITEMS ARE INCLUDED AND PRICED ON THE MATERIAL COST SHEET.

IN THE APRIL 9 LETTER, IT IS STATED THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR BECAUSE OF THE DIFFERENCE OF 34 PERCENT BETWEEN BETCO'S LOW PROPOSAL OF $4,930 AND THE NEXT LOW PROPOSAL OF $7,500 AND HE SHOULD HAVE REQUESTED VERIFICATION OF THE PROPOSAL SUBMITTED BY BETCO BEFORE AWARD. THE ONLY OTHER PROPOSAL SUBMITTED WAS IN THE AMOUNT OF $14,174.

SECTION 1-3.104 OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES FOR THE DISPOSITION OF MISTAKES IN CONTRACTORS' PROPOSALS DISCOVERED AFTER AWARD IN ACCORDANCE WITH THE MISTAKE IN BID LIMITATIONS AND PROCEDURES IN FPR SEC. 1-2.406-4. FURTHER, OUR OFFICE HAS CONSIDERED A REQUESTED INCREASE IN CONTRACT PRICE FOR MISTAKE ALLEGED AFTER AWARD OF A NEGOTIATED CONTRACT IN ACCORDANCE WITH PRINCIPLES APPLYING TO ERRORS IN BIDS. COMP. GEN. 672 (1969). IN THE LATTER DECISION, IT WAS STATED THAT A BIDDER WHO MAKES A MISTAKE IN BID WHICH HAS BEEN ACCEPTED IN GOOD FAITH MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF MISTAKE PRIOR TO AWARD.

WE AGREE THAT THE CONTRACTING OFFICER IN THE IMMEDIATE CASE WAS ON CONSTRUCTIVE NOTICE OF A POSSIBLE ERROR BECAUSE OF THE 34-PERCENT DIFFERENCE BETWEEN THE TWO LOW OFFERS AND VERIFICATION SHOULD HAVE BEEN REQUESTED OF BETCO BEFORE AWARD.

IN VIEW THEREOF, AND CONSIDERING THE EVIDENCE SUBMITTED, THE CONTRACT PRICE SHOULD BE ADJUSTED TO PROVIDE FOR THE INCREASE REQUESTED.