B-173531, AUG 26, 1971

B-173531, AUG 26, 1971

CONTRACTS - MISTAKE IN BID - DUTY OF THE CONTRACTING OFFICER DECISION RELIEVING PEARL PRESSMAN LIBERTY PRINTERS, A DIVISION OF REPUBLIC CORPORATION OF ASSESSMENT OF EXCESS COST INCURRED ON ACCOUNT OF ITS DEFAULT UNDER GOVERNMENT PRINTING OFFICE CONTRACT FOR PRINTING OF A NAVY TECHNICAL MANUAL. IN VIEW OF THE CRITICALNESS OF COLOR SHADINGS IN THE DIAGRAMATIC PORTIONS OF THE MANUAL AND THE GREAT DISPARITY BETWEEN REPUBLIC'S BID AND THE NEXT LOW BID, THE CONTRACTING OFFICER SHOULD HAVE ATTEMPTED TO ASCERTAIN WHETHER THE LOW BIDDER FULLY UNDERSTOOD THE REQUIREMENTS OF THE WORK BEFORE AWARD WAS MADE. THE CONTRACTING OFFICER'S REQUEST THAT BIDDER CONFIRM ITS BID WAS INSUFFICIENT UNDER THE CIRCUMSTANCES; HE WAS UNDER A DUTY TO APPRISE BIDDER OF THE SUSPECTED MISTAKE AND THE BASIS FOR THIS SUSPICION. ACCORDINGLY, THE AMOUNT CHARGED AS EXCESS COST BECAUSE OF ITS ALLEGED DEFAULT SHOULD BE REFUNDED.

TO MR. SPENCE:

REFERENCE IS MADE TO LETTER DATED JULY 16, 1971, FROM YOUR GENERAL COUNSEL, FURNISHING A REPORT ON THE REQUEST OF PEARL PRESSMAN LIBERTY PRINTERS, A DIVISION OF REPUBLIC CORPORATION (REPUBLIC CORPORATION), FOR RELIEF FROM THE ASSESSMENT OF EXCESS COST INCURRED ON ACCOUNT OF ITS DEFAULT UNDER GOVERNMENT PRINTING OFFICE PURCHASE ORDER 41475, JACKET 418- 232.

THE PHILADELPHIA REGIONAL PRINTING PURCHASING OFFICE SOLICITED BIDS UNDER JACKET 418-232 FOR PRINTING A NAVY TECHNICAL MANUAL. THE SOLICITATION PROVIDED THAT THE MATERIALS TO BE FURNISHED BY GPO SHALL BE EXAMINED IN THE GPO PHILADELPHIA REGIONAL PRINTING PROCUREMENT OFFICE ON MARCH 4, 5 AND 8, 1971. IT IS REPORTED THAT THE COLOR SHADINGS IN THE DIAGRAMMATIC PORTIONS OF THE MANUAL WERE CRITICAL.

THE BIDS RECEIVED WERE OPENED ON MARCH 8, 1971, AND THE REPUBLIC CORPORATION WAS DETERMINED TO BE THE LOW RESPONSIVE BIDDER AT $4,954. HOWEVER, BECAUSE THE BID WAS SO MUCH LOWER THAN THE NEXT LOW RESPONSIVE BID IN THE AMOUNT OF $8,650, THE PROCUREMENT OFFICE TELEPHONICALLY REQUESTED THE BIDDER TO REVIEW AND CONFIRM ITS BID. ON THE SAME DAY THE BIDDER RETURNED THE CALL AND CONFIRMED ITS BID. THE BIDDER THEN WAS ADVISED THAT THE JOB WAS THEIRS AND TO PICK IT UP. ON THE FOLLOWING DAY THE BIDDER CAME TO THE PROCUREMENT OFFICE TO PICK UP THE MATERIAL, AND UPON REQUEST SIGNED A STATEMENT AS FOLLOWS: "I CHECKED MY FIGURES ON JACKET #418-232 AND THIS WILL CONFIRM THEM CORRECT."

UPON TAKING THE SAMPLE AND SPECIFICATIONS TO THE PLANT AND ENTERING THEM FOR PRODUCTION, IT WAS DETERMINED THAT THE ART WORK WOULD REQUIRE NEARLY 300 MORE HOURS OF CAMERA AND STRIPPING TIME THAN HAD BEEN ESTIMATED. LETTER DATED MARCH 23, 1971, REPUBLIC CORPORATION REQUESTED TO BE RELIEVED FROM THE CONTRACT AS IT WAS IMPOSSIBLE TO PRODUCE THE ORDER IN ITS PLANT AT THAT TIME. BY LETTER DATED MARCH 26, 1971, THE CONTRACTING OFFICE ADVISED REPUBLIC CORPORATION THAT THE CONTRACT WAS TERMINATED FOR DEFAULT AND THAT IT WOULD BE HELD LIABLE FOR ANY EXCESS COST INCURRED BY THE GOVERNMENT DUE TO THE DEFAULT. ON JUNE 24, 1971, THERE WAS DEDUCTED FROM AMOUNTS OTHERWISE DUE REPUBLIC CORPORATION THE SUM OF $3,745.54, AS THE EXCESS COST INCURRED BY THE GOVERNMENT ON ACCOUNT OF THE DEFAULT.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. 18 COMP. GEN. 942, 947 (1939); 27 ID. 17 (1947). HOWEVER, THE CONTRACTING OFFICER CANNOT DISCHARGE HIS VERIFICATION DUTY MERELY BY REQUESTING CONFIRMATION OF THE BID PRICE. RATHER, THE GOVERNMENT MUST APPRISE THE BIDDER OF THE MISTAKE WHICH IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION. 35 COMP. GEN. 136 (1955); 39 ID. 405 (1959) AND 44 ID. 383 (1965).

IN THIS CASE THE BIDDER WAS ASKED TO REVIEW AND CONFIRM ITS BID. MR. ROBERT S. FREEDMAN OF REPUBLIC CORPORATION EXPLAINS THAT THE BID FIGURES CHECKED OUT:

" *** HOWEVER, WHEN I PUT THE JOB INTO WORK, I WAS TOLD THAT THE FORTY HOURS I ESTIMATED FOR CAMERA AND STRIPPING TIME WOULD REQUIRE NEARLY 300 ADDITIONAL HOURS BECAUSE THE SCREENS SPECIFIED AND WHICH I ESTIMATED TO BE PUT IN BY HAND WOULD HAVE TO BE PUT IN MECHANICALLY BY CAMERA.

"WHY SUCH A DIFFERENCE? THE ART ON THIS JOB, MR. SPENCE, IS VERY TRICKY AND INVOLVED. ALTHOUGH I AM A PRACTICAL PRINTER WITH MORE THAN 30 YEARS OF EXPERIENCE, I COULD NOT FORESEE THAT THE SCREENS WOULD HAVE TO BE PUT IN ON THE CAMERA BECAUSE I WAS NOT FAMILIAR WITH GPO'S CONTRACT SPECIFICATIONS. NORMALLY, I WOULD ASK MY CUSTOMER TO LET ME TAKE A PIECE OF THE ART INTO THE PLANT FOR TESTS BEFORE ESTIMATING. THIS, HOWEVER, IS CONTRARY TO GOVERNMENT POLICY.

"WE DID ORDER $640.00 WORTH OF SPECIAL PAPER FOR THIS JOB AND ARE PREPARED TO ACCEPT THE LOSS. BUT A $3300.00 PENALTY ON TOP FOR A MISUNDERSTANDING WOULD CAUSE A GREAT HARDSHIP ON ME BECAUSE I AM PERSONALLY RESPONSIBLE."

IN VIEW OF THE CRITICALNESS OF COLOR SHADINGS IN THE DIAGRAMMATIC PORTIONS OF THE MANUAL, WHICH COPY WAS AVAILABLE FOR INSPECTION ONLY IN THE PROCUREMENT OFFICE, AND THE GREAT DISPARITY BETWEEN REPUBLIC CORPORATION'S BID AND THE NEXT LOW BID, WE THINK THAT THE CONTRACTING OFFICER SHOULD HAVE ATTEMPTED TO ASCERTAIN WHETHER THE LOW BIDDER FULLY UNDERSTOOD THE REQUIREMENTS OF THE WORK BEFORE THE AWARD WAS MADE. UNDER ALL THE CIRCUMSTANCES, WE CONCLUDE THAT THE ACCEPTANCE OF REPUBLIC CORPORATION'S BID DID NOT RESULT IN A VALID AND BINDING CONTRACT. ACCORDINGLY, THE AMOUNT CHARGED AGAINST REPUBLIC CORPORATION AS EXCESS COST BECAUSE OF ITS ALLEGED DEFAULT UNDER PURCHASE ORDER 41475, JACKET 418 -232, SHOULD BE REFUNDED.