B-173618, SEP 21, 1971

B-173618, SEP 21, 1971

CONTRACTS - MISTAKE IN BID - ERRONEOUS QUOTE FROM SUBCONTRACTOR DECISION ALLOWING REFORMATION OF A CONTRACT WITH ZABEL BROTHERS COMPANY, INC., DUE TO AN ALLEGED MISTAKE IN BID PRICE OF $1,871. SINCE THE CORPORATION HAS FURNISHED EVIDENCE THAT THE SUBCONTRACTOR ERRONEOUSLY QUOTED A UNIT PRICE OF $0.10 INSTEAD OF $1.00 AS INTENDED, AND THE LOW BID WAS $1,069 LOWER THAN THE NEXT LOW BID AND BECAUSE THE GOVERNMENT ESTIMATE OF $1,491.11 SHOULD REALLY HAVE BEEN IN THE AMOUNT OF $6,900.62, THE CONTRACT MAY BE REFORMED AND THE PRICE STATED ON THE PURCHASE ORDER CORRECTED TO AN AMOUNT NOT IN EXCESS OF THE NEXT LOWEST RESPONSIVE BID.

TO MR. ADOLPHUS NICHOLS SPENCE:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 10, 1971, FORWARDING A REPORT ON THE REQUEST OF ZABEL BROTHERS COMPANY, INC., PHILADELPHIA, PENNSYLVANIA, FOR RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN THE CORPORATION'S BID UPON WHICH PURCHASE ORDER NO. 45383 IS BASED.

BIDS WERE REQUESTED UNDER JACKET NO. 405-313, FOR THE PRINTING OF A PARTICULAR BOOK. IN RESPONSE, ZABEL BROTHERS COMPANY, INC., SUBMITTED A BID DATED OCTOBER 19, 1970, OFFERING TO FURNISH THE BOOKS FOR THE LUMP SUM OF $1,871. THE SIX OTHER BIDS RANGED FROM $2,940 TO $4,457. THE ESTIMATE FOR THE JOB WAS $1,491.11. THE BID OF ZABEL BROTHERS WAS ACCEPTED ON OCTOBER 22, 1970.

BY LETTER DATED OCTOBER 27, 1970, ZABEL BROTHERS ADVISED THAT AN ERROR WAS MADE IN ITS BID IN THAT IT WAS BASED UPON AN ERRONEOUS QUOTATION FROM ITS SUBCONTRACTOR. THE CORPORATION STATED THAT THE SUBCONTRACTOR HAD QUOTED A UNIT PRICE OF $0.10 INSTEAD OF A UNIT PRICE OF $1 AS ORIGINALLY INTENDED. IN ITS LETTER OF JULY 14, 1971, TO OUR OFFICE, ZABEL BROTHERS CONTENDS THAT THE DIFFERENCE BETWEEN ITS BID PRICE AND THE NEXT TWO LOWEST BIDS RECEIVED WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE ERROR IN ITS BID; THAT THE GPO ESTIMATE UPON WHICH THE CONTRACTING OFFICER RELIED CONTAINED A $2,000 ERROR; AND THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED THE CORPORATION TO VERIFY ITS BID PRIOR TO AWARD. THE CORPORATION HAS STATED THAT THE CORRECT PRICE FOR THE JOB IS $4,003. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS ORIGINAL AND REVISED ESTIMATE SHEETS.

YOU STATE THAT BECAUSE OF THE $1,491.11 ESTIMATE, THE CONTRACTING OFFICER DID NOT SEEK CONFIRMATION OF THE $1,871 BID OF ZABEL BROTHERS EVEN THOUGH THE DIFFERENCE BETWEEN THAT BID AND THE SECOND LOW BID WAS $1,069. ALSO, YOU ADVISE THAT AFTER ZABEL BROTHERS ALLEGED ERROR, THE CONTRACTING OFFICER DETERMINED THAT THE $1,491.11 ESTIMATE WAS IN ERROR. IT IS UNDERSTOOD INFORMALLY THAT THE REVISED ESTIMATE FOR THE JOB IS IN THE AMOUNT OF $6,900.62.

FROM THE FOREGOING, IT MAY BE CONCLUDED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABLE ERROR IN THE BID OF ZABEL BROTHERS AND THAT VERIFICATION OF THE BID SHOULD HAVE BEEN REQUESTED BEFORE AWARD. UNDER THESE CIRCUMSTANCES, THE PRICE STATED ON THE PURCHASE ORDER MAY BE CORRECTED TO AN AMOUNT NOT IN EXCESS OF THE NEXT LOWEST RESPONSIVE BID.