B-173901, APR 12, 1972

B-173901: Apr 12, 1972

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IS DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. IT MUST BE RECOGNIZED THAT THE OPTION IS ONLY PERMISSIBLE WHERE THERE EXISTS CLEAR AND CONVINCING EVIDENCE THAT THE BID AS SUBMITTED WAS NOT THE BID INTENDED AND WHERE THE BID WOULD HAVE STILL BEEN LOW IF CORRECTED. UNDER THESE CIRCUMSTANCES ACCEPTANCE IS NOT PREJUDICIAL TO OTHER BIDDERS. FRAUDULENT ALLEGATIONS OF MISTAKE HAVE NOT BEEN ENCOUNTERED IN THE PAST AND COULD BE PROMPTLY CORRECTED BY THE REVISION OF APPROPRIATE REGULATIONS SHOULD THEY OCCUR IN THE FUTURE. THE PROTEST IS DENIED. SHRIVER AND KAMPELMAN: REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 18. BIDS FOR ITEMS (1) AND (2) WERE TO BE COMPUTED ON A SQUARE FOOT BASIS. ITEM (3) WAS TO BE SUBMITTED ON A LUMP-SUM BASIS.

B-173901, APR 12, 1972

BID PROTEST - MISTAKE IN BID - PROPRIETY OF OPTIONAL PERFORMANCE DECISION DENYING THE PROTEST OF CENTRAL BUILDING MAINTENANCE, INC. (CENTRAL) AGAINST AWARD OF A CONTRACT TO MANPOWER, INC., OF HARRISBURG UNDER AN IFB ISSUED BY THE CARLISLE BARRACKS, PA., FOR JANITORIAL SERVICES. CENTRAL PROTESTS THAT THE CONTRACTING OFFICER'S DECISION, IN ALLOWING MANPOWER THE OPTION OF WITHDRAWING ITS LOW BID OR SUBMITTING IT AT THE MISTAKEN BID PRICE, IS DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM. IT MUST BE RECOGNIZED THAT THE OPTION IS ONLY PERMISSIBLE WHERE THERE EXISTS CLEAR AND CONVINCING EVIDENCE THAT THE BID AS SUBMITTED WAS NOT THE BID INTENDED AND WHERE THE BID WOULD HAVE STILL BEEN LOW IF CORRECTED. UNDER THESE CIRCUMSTANCES ACCEPTANCE IS NOT PREJUDICIAL TO OTHER BIDDERS. B-168673, APRIL 7, 1970. FURTHER, FRAUDULENT ALLEGATIONS OF MISTAKE HAVE NOT BEEN ENCOUNTERED IN THE PAST AND COULD BE PROMPTLY CORRECTED BY THE REVISION OF APPROPRIATE REGULATIONS SHOULD THEY OCCUR IN THE FUTURE. FINALLY, THE COMP. GEN. CANNOT AGREE THAT COMMUNICATIONS BETWEEN THE CONTRACTING OFFICER AND MANPOWER CONSTITUTED NEGOTIATIONS. IN VIEW OF THE FOREGOING, THE PROTEST IS DENIED.

TO FRIED, FRANK, HARRIS, SHRIVER AND KAMPELMAN:

REFERENCE IS MADE TO YOUR LETTER DATED AUGUST 18, 1971, WITH ENCLOSURE, PROTESTING ON BEHALF OF CENTRAL BUILDING MAINTENANCE, INC. (CENTRAL), THE AWARD OF A CONTRACT ON JULY 28, 1971, TO MANPOWER, INC., OF HARRISBURG (MANPOWER) UNDER INVITATION FOR BIDS NO. DABB15-71-B 0024, ISSUED MAY 20, 1971, BY THE CARLISLE BARRACKS, PENNSYLVANIA.

THE SUBJECT INVITATION SOLICITED BIDS FOR THE PERFORMANCE OF THREE ITEMS OF JANITORIAL SERVICES AT CARLISLE BARRACKS DURING THE PERIOD JULY 1, 1971 TO JUNE 30, 1972, FOR APPROXIMATELY (1) 136,023 AND (2) 3,500 SQUARE FEET OF BUILDING SPACE, AND (3) SEMI-ANNUAL WINDOW WASHING. BIDS FOR ITEMS (1) AND (2) WERE TO BE COMPUTED ON A SQUARE FOOT BASIS, WITH THE SUBMISSION OF MONTHLY PRICES EXTENDED FOR A TWELVE MONTH PERIOD, AND ITEM (3) WAS TO BE SUBMITTED ON A LUMP-SUM BASIS. AWARD WAS TO BE MADE TO THE LOWEST AGGREGATE BIDDER. ORIGINALLY BIDS WERE TO BE OPENED ON JUNE 9, 1971, BUT AN INCORRECT WAGE DETERMINATION INCLUDED IN THE ORIGINAL SOLICITATION REQUIRED AN AMENDMENT DELAYING THE OPENING TO JUNE 16, 1971. OF THE SEVEN BIDS RECEIVED, THE LOWEST AGGREGATE BID, $42,856.96, WAS SUBMITTED BY MANPOWER. THE NEXT-LOW BID WAS SUBMITTED BY CENTRAL IN THE AMOUNT OF $54,865.72.

IN RESPONSE TO THE CONTRACTING OFFICER'S REQUEST FOR AN AFFIRMANCE OF ITS BID PRICE, MANPOWER ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN THE METHOD USED IN COMPUTING ITEMS (1) AND (2) OF ITS BID IN THAT IT HAD MULTIPLIED THE 136,023 AND 3,500 TOTAL SQUARE FOOTAGE BY $ .030, THE MONTHLY PRICE PER SQUARE FOOT, AND ARRIVED AT THE ERRONEOUS MONTHLY TOTAL PRICES OF $40,806.90 AND $1,050.00, INSTEAD OF $4,080.69 AND $105.00, RESPECTIVELY. THE ERRONEOUS FIGURES WERE INADVERTENTLY TREATED AS THE YEARLY TOTALS AND DIVIDED BY TWELVE FOR THE MONTHLY TOTALS OF $3,400.57 AND $87.50 SHOWN IN THE BID. MANPOWER REQUESTED THAT THE YEARLY PRICES BE CHANGED TO $48,968.29 AND $1,260 FOR ITEMS (1) AND (2), RESPECTIVELY, FOR A TOTAL AGGREGATE BID OF $51,228.29 ON THE THREE ITEMS. IN SUPPORT OF ITS ALLEGATION OF ERROR, MANPOWER SUBMITTED ITS ORIGINAL WORKPAPERS WHICH SHOWED THE MANNER IN WHICH THE BID HAD BEEN COMPUTED.

ON JULY 12, 1971, THE CONTRACTING OFFICER FORWARDED MANPOWER'S REQUEST FOR CORRECTION OF ITS BID TO THE OFFICE OF THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) (OASAI&L)). SIMULTANEOUSLY, THE CONTRACTING OFFICER REQUESTED MANPOWER AND CENTRAL TO EXTEND THEIR BID ACCEPTANCE PERIOD FOR 30 DAYS. OASAI&L) RENDERED A DECISION THAT THERE WAS CLEAR AND CONVINCING EVIDENCE THAT MANPOWER HAD MADE A MISTAKE IN ITS BID BUT THAT THE FILE DID NOT CONTAIN CLEAR AND CONVINCING EVIDENCE OF THE INTENDED BID. THEREFORE, MANPOWER WAS GRANTED PERMISSION TO WITHDRAW ITS BID, BUT CORRECTION OF THE BID WAS NOT AUTHORIZED.

AS A RESULT OF THIS DECISION, AND A TELEPHONE CONVERSATION WITH THE CONTRACTING OFFICER ON JULY 22, 1971, DURING WHICH THE POSSIBLE OPPORTUNITY TO PERFORM AT THE INITIAL PRICE APPEARS TO HAVE BEEN DISCUSSED, MANPOWER REQUESTED THAT ITS BID BE ACCEPTED AT THE ORIGINAL PRICE. IN DECIDING THE REQUEST, OASAI&L) DETERMINED:

"INASMUCH AS THE BID OF MANPOWER, INC. OF HARRISBURG WOULD HAVE REMAINED THE LOWEST BID EVEN HAD THE BIDDER BEEN PERMITTED TO CORRECT IT AND THE BIDDER IS NOT ATTEMPTING TO REMAIN THE LOW BIDDER BY FOREGOING HIS CLAIM OF ERROR, THE BID MAY BE CONSIDERED AT THE PRICES ORIGINALLY BID IN RESPONSE TO IFB DABB15-71-B-0024."

ACCORDINGLY, THE CONTRACT WAS AWARDED TO MANPOWER ON JULY 28, 1971.

YOU CONTEND THAT THE AWARD OF THE CONTRACT TO MANPOWER IS DETRIMENTAL TO THE COMPETITIVE BIDDING SYSTEM IN THAT IT PERMITTED THE BIDDER TO TAKE OR LEAVE THE CONTRACT AS HE SAW FIT. YOU SAY THAT IF BIDDERS WHO DEMONSTRATE THE EXISTENCE OF A BIDDING MISTAKE, BUT NOT THE BID INTENDED, ARE ALLOWED THE OPTION OF WITHDRAWING THEIR BIDS OR RECEIVING AWARD AT THE ADMITTEDLY MISTAKEN ORIGINAL BID PRICE, THEN EVERY LOW BIDDER WILL BE ENCOURAGED TO ALLEGE A BIDDING MISTAKE IN SOME AMOUNT SLIGHTLY LESS THAN THE DIFFERENCE BETWEEN ITS "MISTAKEN" BID AND THE NEXT LOW BID. SUCH ACTION COULD BE TAKEN WITH THE KNOWLEDGE THAT IF THE AMOUNT OF THE MISTAKE COULD NOT BE SHOWN THE LOW BIDDER WOULD STILL HAVE THE CHOICE, AFTER ALL BIDS HAD BEEN DISCLOSED, OF WITHDRAWING HIS BID OR ACCEPTING AWARD. IN ADDITION, YOU ASSERT THAT WRITTEN OR ORAL DISCUSSIONS BETWEEN THE CONTRACTING OFFICER AND MANPOWER, CONCERNING AN OPTION TO ACCEPT THE AWARD AT THE ORIGINAL BID PRICE, MUST BE CONSIDERED NEGOTIATIONS WHICH WOULD AFFECT THE VALIDITY OF THE AWARD ON THIS FORMALLY ADVERTISED PROCUREMENT.

YOU CITE OUR DECISIONS, 42 COMP. GEN. 723 (1963) AND 37 COMP. GEN. 579 (1958), AS SUPPORT FOR YOUR CONTENTION THAT IT WAS IMPROPER TO AWARD A CONTRACT TO MANPOWER ON THE BASIS OF ITS ORIGINAL BID. WE DO NOT, HOWEVER, REGARD THOSE DECISIONS AS SUPPORTING YOUR POSITION BECAUSE THE EVIDENCE SUBMITTED BY MANPOWER CLEARLY INDICATES THAT ITS BID WOULD HAVE STILL BEEN LOW IF CORRECTED. IN SUCH CIRCUMSTANCES WE HAVE HELD THAT ACCEPTANCE OF SUCH A LOW BID IS PERMISSIBLE SINCE IT WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS. SEE B-168673, APRIL 7, 1970; B-165405, OCTOBER 24, 1968; AND B-155432, DECEMBER 1, 1964, WHEREIN WE CONSIDERED, AND DISTINGUISHED IN SUCH RESPECT, THE DECISIONS WHICH YOU HAVE CITED.

REGARDING YOUR SUGGESTION THAT LOW BIDDERS WOULD BE ENCOURAGED TO FABRICATE OR MAKE IMPROPER ALLEGATIONS OF MISTAKES IN THEIR BIDS IF THEY WERE GIVEN AN OPTION TO ACCEPT OR REFUSE AWARD AT THE "MISTAKEN" BID PRICE, IT SHOULD BE NOTED THAT THE ADMINISTRATIVE REJECTION OF AN ALLEGATION OF MISTAKE DOES NOT AUTOMATICALLY AFFORD THE BIDDER AN OPTION OF WITHDRAWING ITS BID. SEE ASPR 2-406.3(A)(4) WHICH PROVIDES THAT UNLESS THE EVIDENCE IS CLEAR AND CONVINCING THAT THE BID AS SUBMITTED WAS NOT THE BID INTENDED, A DETERMINATION MAY BE MADE REQUIRING THAT THE BID BE CONSIDERED FOR AWARD IN THE FORM SUBMITTED. WHILE IT MAY BE POSSIBLE FOR A BIDDER TO ENGAGE IN THE TACTICS WHICH YOU DESCRIBE, THE PROPRIETY OF ACCEPTING A MISTAKEN BID UNDER THE CIRCUMSTANCES MENTIONED ABOVE HAS BEEN RECOGNIZED FOR A CONSIDERABLE PERIOD OF TIME AND WE ARE NOT AWARE OF ANY PROBLEMS OF THAT NATURE BEING ENCOUNTERED BY THE PROCURING ACTIVITIES. ANY EVENT, IF AN UNDESIRABLE PRACTICE DEVELOPS IN SUCH RESPECT, IT CAN BE PROMPTLY CORRECTED BY APPROPRIATE REVISIONS IN THE PERTINENT REGULATIONS.

WE MUST ALSO REJECT YOUR ASSERTION THAT THE WRITTEN AND ORAL COMMUNICATIONS BETWEEN THE CONTRACTING OFFICER AND MANPOWER CONCERNING THAT FIRM'S MISTAKEN PRICE WERE NEGOTIATIONS AND INVALIDATED THE AWARD. WE DO NOT BELIEVE IT CAN REASONABLY BE MAINTAINED THAT IT WAS IMPROPER OR AGAINST THE BEST INTEREST OF THE GOVERNMENT FOR THE CONTRACTING OFFICER TO HAVE INFORMED MANPOWER, AFTER ITS REQUEST FOR REVISION OF THE BID PRICE HAD BEEN DENIED, THAT IT COULD, IF IT SO DESIRED, REQUEST THAT THE BID BE CONSIDERED FOR ACCEPTANCE AT THE MISTAKEN PRICE INSTEAD OF ASKING FOR WITHDRAWAL OF THE BID.

ACCORDINGLY, YOUR PROTEST OF THE AWARD OF THE CONTRACT TO MANPOWER MUST BE DENIED.