B-173417, JUL 29, 1971

B-173417: Jul 29, 1971

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CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN ROGAY'S LOW BID OF $16. THE BID WAS ACCEPTED IN GOOD FAITH. NO ERROR WAS ALLEGED UNTIL AFTER AWARD. SECRETARY: REFERENCE IS MADE TO A LETTER DATED JUNE 24. TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DOT-FH-11-7469 IS BASED. THE LOW BID OF ROGAY WAS ACCEPTED ON OCTOBER 12. IT IS REPORTED THAT ROGAY DELIVERED THE RECRUITMENT EXHIBITS PRIOR TO THE CONTRACT DELIVERY DATE. THAT IT WAS PAID FOR THEM AT THE CONTRACT PRICE ON OR ABOUT JANUARY 14. WAS MADE BY THE CORPORATION IN COMPUTING ITS MATERIAL COSTS. THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE.

B-173417, JUL 29, 1971

CONTRACTS - MISTAKE IN BID - REQUEST FOR INCREASED CONSIDERATION DECISION THAT NO LEGAL BASIS EXISTS FOR INCREASING THE CONSIDERATION UNDER A CONTRACT BETWEEN THE FEDERAL HIGHWAY ADMINISTRATION AND ROGAY, INC. FOR THE FABRICATION OF NINE RECRUITMENT EXHIBITS. BECAUSE OF THE WIDE RANGE OF BIDS, $16,056 TO $31,279.23 AND THE GOVERNMENT'S ESTIMATE OF $17,000, THE COMP. GEN. CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN ROGAY'S LOW BID OF $16,056. THE BID WAS ACCEPTED IN GOOD FAITH, AND NO ERROR WAS ALLEGED UNTIL AFTER AWARD. UNDER THE CIRCUMSTANCES THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT, THE RIGHTS AND LIABILITIES OF THE PARTIES BECAME FIXED, AND THE CONSIDERATION MAY NOT BE INCREASED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED JUNE 24, 1971, WITH ENCLOSURES, FROM THE ASSOCIATE ADMINISTRATOR FOR ADMINISTRATION, FEDERAL HIGHWAY ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY ROGAY, INCORPORATED, TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DOT-FH-11-7469 IS BASED.

INVITATION FOR BIDS NO. 71-6 REQUESTED BIDS FOR THE FABRICATION OF NINE COMPLETE FEDERAL HIGHWAY RECRUITMENT EXHIBITS. IN RESPONSE, ROGAY, INCORPORATED, SUBMITTED A BID DATED SEPTEMBER 10, 1970, OFFERING TO FURNISH THE EXHIBITS AT A UNIT PRICE OF $1,784 OR FOR A TOTAL PRICE OF $16,056. THE LOW BID OF ROGAY WAS ACCEPTED ON OCTOBER 12, 1970, AND IT IS REPORTED THAT ROGAY DELIVERED THE RECRUITMENT EXHIBITS PRIOR TO THE CONTRACT DELIVERY DATE, DECEMBER 14, 1970, AND THAT IT WAS PAID FOR THEM AT THE CONTRACT PRICE ON OR ABOUT JANUARY 14, 1971.

ROGAY'S REPRESENTATIVE ADVISED THE CONTRACTING OFFICER BY TELEPHONE ON OCTOBER 13, 1970, THAT THE CORPORATION HAD MADE A MISTAKE IN ITS BID. A LETTER DATED OCTOBER 19, 1970, ROGAY THROUGH ITS ATTORNEY ADVISED THE CONTRACTING OFFICER THAT THE ERROR RESULTED FROM A FAILURE TO INCLUDE IN ITS BID PRICE THE AMOUNT OF $3,300 TO COVER THE COST OF THE SHIPPING CRATES FOR THE EXHIBITS. ROGAY ALSO STATED THAT ANOTHER ERROR, IN THE AMOUNT OF $80, WAS MADE BY THE CORPORATION IN COMPUTING ITS MATERIAL COSTS. THE CORPORATION REQUESTED THAT THE CONTRACT PRICE OF THE EXHIBITS BE INCREASED BY $2,880. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION BY LETTER OF JANUARY 6, 1971, SUBMITTED ITS ORIGINAL WORKSHEETS. IN A LETTER DATED MAY 18, 1971, ROGAY REQUESTED THAT THE CONTRACT PRICE OF THE EXHIBITS BE INCREASED BY $2,610 INSTEAD OF $2,880.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE. THE CONTRACTING OFFICER HAS ADVISED THAT HE HAD NO REASON TO SUSPECT AN ERROR IN THE BID. THE RECORD INDICATES THAT THE SIX OTHER BIDS RECEIVED RANGED FROM $20,619 TO $31,279.23 AND THAT THE GOVERNMENT'S REVISED ESTIMATE WAS IN THE AMOUNT OF $17,000. IN VIEW OF THE WIDE RANGE OF BIDS RECEIVED AND THE GOVERNMENT'S ESTIMATE, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. ALTHOUGH, AFTER AWARD, THE CORPORATION FURNISHED EVIDENCE TO SUPPORT ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT PRIOR TO AWARD THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE DIFFERENT FACTORS USED BY THE CORPORATION IN COMPUTING THE BID PRICE. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED BY THE CORPORATION UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE EDWIN DOUGHERTY AND M. H. OGDEN V UNITED STATES, 102 CT. CL. 249, 259 (1944); SALIGMAN ET AL. V UNITED STATES, 56 F. SUPP. 505, 507 (1944).

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE CONSIDERATION UNDER THE CONTRACT.