B-172642, JUN 9, 1971

B-172642, JUN 9, 1971

CONTRACTS - MISTAKE IN BID - DISPARITY BETWEEN UNIT AND EXTENDED PRICES CONCERNING BID BY ROBERTSON COMPANY ON A SALES INVITATION FOR VARIOUS SCRAP METALS, A DISPARITY EXISTED BETWEEN THE UNIT PRICE OF 15[ PER POUND AND THE EXTENDED PRICE OF $600. ASSUMING THE FORMER TO BE CORRECT, THE CONTRACTING OFFICER CHANGED THE EXTENDED PRICE TO $1,212.75 AND AWARDED THE CONTRACT TO ROBERTSON, WHO LATER ADVISED THAT THE BID WAS INTENDED FOR ITEM 64 NOT ITEM 54. AS AN ERROR IN PRICE EXISTED, WHICH WAS SUBSTANTIAL, VERIFICATION SHOULD HAVE BEEN SOUGHT. THEREFORE, ITEM 54 MAY BE DELETED WITHOUT LIABILITY TO ROBERTSON.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER, DSAH-G, DATED APRIL 16, 1971, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, REQUESTING A DECISION WHETHER ITEM 54 OF SALES CONTRACT NO. 27-1102-013 AWARDED TO THE ROBERTSON COMPANY MAY BE CANCELED WITHOUT LIABILITY BECAUSE OF AN ALLEGED ERROR IN THE BID UPON WHICH THE CONTRACT IS BASED.

IN RESPONSE TO SALES INVITATION NO. 27-1102, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, COLUMBUS, OHIO, THE ROBERTSON COMPANY SUBMITTED A BID DATED JANUARY 25, 1971, OFFERING TO PURCHASE VARIOUS ITEMS OF SCRAP MATERIAL. ON ITEM 54, COVERING 8,085 POUNDS OF ALUMINUM SCRAP, ROBERTSON BID A UNIT PRICE OF $0.15 PER POUND AND AN EXTENDED PRICE OF $600. ALTHOUGH HE NOTED THE DISPARITY BETWEEN THE UNIT AND EXTENDED PRICES ON ITEM 54, THE CONTRACTING OFFICER DID NOT REQUEST VERIFICATION BUT ASSUMED THAT THE UNIT PRICE WAS CORRECT AND CHANGED THE EXTENDED PRICE. FEBRUARY 8, 1971, THE CONTRACTING OFFICER AWARDED TO ROBERTSON 8,085 POUNDS OF ALUMINUM SCRAP COVERED BY ITEM 54 AT A TOTAL PRICE OF $1,212.75.

BY LETTERS DATED FEBRUARY 11 AND 22, 1971, ROBERTSON ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT IT HAD INTENDED TO BID ON ITEM 64 INSTEAD OF ITEM 54. THE COMPANY STATED THAT THE EXTENDED PRICE FOR ITEM 54 ESTABLISHED THAT IT WAS ITS INTENT TO MAKE SUCH PRICE APPLICABLE TO ITEM 64, SINCE SUCH TOTAL PRICE DIVIDED BY THE UNIT PRICE SPECIFIED FOR ITEM 64. THE COMPANY SUBMITTED ITS WORKSHEETS, COPIES OF PAGES FROM THE SALES INVITATION, WITH NOTATIONS THEREON OF ITS INTENDED BID PRICES. PRICES ARE SHOWN ON THE WORKSHEETS FOR ITEM 54 BUT THE PRICES NOTED FOR 64 ARE THE SAME AS THE BID PRICES THE COMPANY SUBMITTED FOR ITEM 54. ROBERTSON HAS REQUESTED THAT ITEM 54 OF THE CONTRACT BE CANCELED.

ERROR IS APPARENT ON THE FACE OF THE BID OF THE COMPANY AS TO ITEM 54 SINCE THE UNIT PRICE OF $0.15, WHEN MULTIPLIED BY THE QUANTITY OF 8,085, DOES NOT EQUAL THE AMOUNT OF $600 INSERTED IN THE TOTAL AMOUNT COLUMN. THE UNIT PRICE SPECIFIED FOR ITEM 54 IS MULTIPLIED BY THE QUANTITY FOR ITEM 64, THE ITEM ON WHICH THE COMPANY ALLEGES IT INTENDED BIDDING, THE TOTAL WOULD BE THE SAME AS SHOWN IN ITS BID FOR ITEM 54. IN THE CIRCUMSTANCES, THE COMPANY SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID AS TO ITEM 54 BEFORE ITS ACCEPTANCE.

AS STATED IN 37 COMP. GEN. 829 (1958), ALTHOUGH IT MAY BE THE GENERAL RULE THAT IN CASE OF ERROR IN EXTENSION OF PRICE IN THE BID THE UNIT PRICE WILL GOVERN, THIS RULE SHOULD ONLY BE APPLIED, WITHOUT REQUESTING VERIFICATION, WHERE THE CORRECTION RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. IN THIS CASE, THE CHANGE IN THE TOTAL PRICE WAS SUBSTANTIAL. SEE ALSO B-168212, NOVEMBER 17, 1969, AND B- 169889, JUNE 23, 1970.

ACCORDINGLY, ITEM 54 MAY BE DELETED FROM THE SUBJECT CONTRACT, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO ROBERTSON.