B-173450, SEP 14, 1971

B-173450: Sep 14, 1971

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CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. NO PRICE IS SHOWN THEREFOR. THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD. A VALID AND BINDING CONTRACT WAS CONSUMMATED AND THE CONTRACT PRICE MAY NOT BE INCREASED. JOHNSON: REFERENCE IS MADE TO LETTER DATED JUNE 25. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE MONTGOMERY ELEVATOR COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. V584-C-227 IS BASED. THE BID OF THE MONTGOMERY ELEVATOR COMPANY WAS ACCEPTED ON MAY 17. IT IS REPORTED THAT ON MAY 20. ONE OF THE ITEMS OF EQUIPMENT LISTED THEREON IS A NEW 50 H.P. NO PRICE IS SHOWN FOR THE EQUIPMENT.

B-173450, SEP 14, 1971

BID PROTEST - MISTAKE IN BID DECISION THAT NO LEGAL BASIS EXISTS FOR INCREASING THE PRICE OF A CONTRACT WITH MONTGOMERY ELEVATOR COMPANY, DUE TO AN ALLEGED MISTAKE IN BID THROUGH THE OMISSION OF CERTAIN GENERATOR SETS IN ITS BID PRICE. IN VIEW OF THE WIDE RANGE OF BIDS, $210,882 TO $280,143, THE COMP. GEN. CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. WHILE THE ESTIMATE SHEET LISTS A MOTOR GENERATOR SET, NO PRICE IS SHOWN THEREFOR, AND THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD. IN THE CIRCUMSTANCES, A VALID AND BINDING CONTRACT WAS CONSUMMATED AND THE CONTRACT PRICE MAY NOT BE INCREASED.

TO MR. DONALD E. JOHNSON:

REFERENCE IS MADE TO LETTER DATED JUNE 25, 1971, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND OF SURGERY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE MONTGOMERY ELEVATOR COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. V584-C-227 IS BASED.

THE VETERANS ADMINISTRATION HOSPITAL, IOWA CITY, IOWA, BY INVITATION DATED MARCH 26, 1971, PROJECT NO. 277, REQUESTED BIDS FOR THE COMPLETE RENOVATION OF FOUR PASSENGER ELEVATORS IN BUILDING NO. 1 AT THE HOSPITAL. IN RESPONSE THE MONTGOMERY ELEVATOR COMPANY SUBMITTED A BID DATED MAY 6, 1971, OFFERING TO PERFORM THE REQUIRED WORK FOR THE LUMP SUM OF $210,882. THE BID OF THE MONTGOMERY ELEVATOR COMPANY WAS ACCEPTED ON MAY 17, 1971.

IT IS REPORTED THAT ON MAY 20, 1971, A REPRESENTATIVE OF THE MONTGOMERY ELEVATOR COMPANY ORALLY ADVISED THE CONTRACTING OFFICER THAT THE COMPANY HAD MADE A MISTAKE IN ITS BID. IN A LETTER MAY 21, 1971, MONTGOMERY ELEVATOR STATED THAT IN COMPUTING ITS BID PRICE FOR RENOVATION OF THE ELEVATORS IT HAD FAILED TO INCLUDE THE COST OF FOUR GEARLESS MOTOR GENERATORS. THE COMPANY REQUESTED THAT THE CONTRACT PRICE OF THE RENOVATION WORK BE INCREASED BY $12,672 TO COVER THE COST OF THE OMITTED MOTOR GENERATOR SETS. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ORIGINAL ESTIMATE SHEET. THE ESTIMATE SHEET SHOWS PRICES FOR VARIOUS ITEMS OF WORK AND EQUIPMENT. ONE OF THE ITEMS OF EQUIPMENT LISTED THEREON IS A NEW 50 H.P., 30 K.W., 1800 R.P.M. MOTOR GENERATOR SET, BUT NO PRICE IS SHOWN FOR THE EQUIPMENT.

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 THREE OTHER BIDS RANGED FROM $225,000 TO $280,143 AND THAT THE GOVERNMENT'S ESTIMATE WAS IN THE AMOUNT OF $224,045. 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 COMPANY 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 COMPANY 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 COMPANY UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID 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). SEE ALSO 47 COMP. GEN. 365, 368 (1968); 40 ID. 326, 332 (1960).

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE CONTRACT PRICE.