B-174233, MAY 8, 1972

B-174233: May 8, 1972

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IN VIEW OF THE FACT THAT ONLY ONE PROPOSAL WAS SUBMITTED. IT IS THE OPINION OF THE COMP. THAT THE BID ERROR WAS SUFFICIENTLY OBVIOUS TO PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD. WHICH IN THIS CASE IS THE PRICE INTENDED. SECRETARY: REFERENCE IS MADE TO A LETTER. SINCE THE GOVERNMENT ESTIMATE FOR THIS WORK WAS $33. 000 AND A FIXED-PRICE CONTRACT WAS DESIRED. MRI WAS ASKED TO SUBMIT ANOTHER PROPOSAL ON A MODIFIED SCOPE OF WORK. MRI WAS THE SOLE PROPOSER ALTHOUGH OTHER FIRMS HAD BEEN SOLICITED. WAS FORWARDED TO MRI. ARE AS FOLLOWS: "13. THE PROPOSAL WAS ACCEPTED WITHOUT DISCUSSION. THE WORK WAS PERFORMED AND THE CONTRACTOR WAS PAID $33. UPON BEING ADVISED THAT THE PROPER PROCEDURE WAS TO PRESENT THE MATTER TO OUR OFFICE.

B-174233, MAY 8, 1972

BID PROTEST - MISTAKE IN BID - REQUEST FOR INCREASE IN CONTRACT PRICE DECISION ALLOWING THE REQUEST OF MARINE RESOURCES, INC. (MRI), FOR AN INCREASE IN THE PRICE OF A CONTRACT AWARDED UNDER AN RFP ISSUED BY THE NAVAL CIVIL ENGINEERING LABORATORY, PORT HUENEME, CALIF., FOR A PROTOTYPE CHEMICAL OVERLAY DISPENSING SYSTEM. IN VIEW OF THE FACT THAT ONLY ONE PROPOSAL WAS SUBMITTED, IT IS THE OPINION OF THE COMP. GEN. THAT THE BID ERROR WAS SUFFICIENTLY OBVIOUS TO PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD, AND NEITHER WITHDRAWAL OF THE PROTEST SHORTLY BEFORE "FINAL PAYMENT" NOR THE RELEASE EXECUTED PRIOR TO THE TIME MRI BECAME AWARE OF ITS ERROR SHOULD BAR RECOVERY OF A FAIR AND REASONABLE PRICE, WHICH IN THIS CASE IS THE PRICE INTENDED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER, FAC 0211E:RSL:WH, DATED DECEMBER 22, 1971, WITH ENCLOSURES, FROM COUNSEL, NAVAL FACILITIES ENGINEERING COMMAND, CONCERNING THE REQUEST OF MARINE RESOURCES, INCORPORATED (MRI), FOR AN INCREASE OF $2,900 IN THE PRICE OF CONTRACT N62399-70-C 0022, WITH THE NAVAL CIVIL ENGINEERING LABORATORY, PORT HUENEME, CALIFORNIA.

IN RESPONSE TO REQUEST FOR PROPOSALS NO. N62399-70-C-0022 FOR A PROTOTYPE CHEMICAL OVERLAY DISPENSING SYSTEM, MRI SUBMITTED A PROPOSAL OF $47,869.25 ON A FIXED-PRICE BASIS, OR $30,706.33 ON A COST-PLUS-A FIXED FEE BASIS. SINCE THE GOVERNMENT ESTIMATE FOR THIS WORK WAS $33,000 AND A FIXED-PRICE CONTRACT WAS DESIRED, MRI WAS ASKED TO SUBMIT ANOTHER PROPOSAL ON A MODIFIED SCOPE OF WORK. MRI WAS THE SOLE PROPOSER ALTHOUGH OTHER FIRMS HAD BEEN SOLICITED. AT THIS TIME A COPY OF FORM DD 633-4, CONTRACT PRICING PROPOSAL, WAS FORWARDED TO MRI. MRI SUBMITTED A NEW PROPOSAL IN RESPONSE TO THE REQUEST AND EXECUTED THE CONTRACT PRICING PROPOSAL. THE TRANSMITTAL LETTER COVERING THE MODIFIED PROPOSAL INDICATED A FIXED PRICE OF $33,494. THE LETTER ALSO REFERRED TO AN ATTACHED COPY OF FORM DD 633-4 SHOWING A CONTRACT PRICING PROPOSAL BREAKDOWN. THE FINAL THREE ITEM FIGURES ON THE FORM, ITEMS 13, 14 AND 15, ARE AS FOLLOWS:

"13. TOTAL ESTIMATED COST $33,085.00

14. FEE OR PROFIT $ 3,309.00

15. TOTAL ESTIMATED COST AND (CORRECT FIGURE

FEE OR PROFIT $33,494.00" $36,394.00)

SINCE THE FINAL FIGURE ON FORM DD 633-4 AND IN THE MRI COVERING LETTER COMPARED FAVORABLY WITH THE GOVERNMENT ESTIMATE, THE PROPOSAL WAS ACCEPTED WITHOUT DISCUSSION. THE WORK WAS PERFORMED AND THE CONTRACTOR WAS PAID $33,494. ON JUNE 21, 1971, THE CONTRACTOR SIGNED A FINAL RELEASE WHICH CONTAINED NO EXCEPTIONS.

BY LETTER DATED JULY 12, 1971, PRIOR TO PAYMENT OF THE FINAL INVOICE OF $4,982.32, MRI ADVISED THE CONTRACTING OFFICER OF THE ERROR. UPON BEING ADVISED THAT THE PROPER PROCEDURE WAS TO PRESENT THE MATTER TO OUR OFFICE, MRI LATER RESCINDED THE LETTER OF JULY 12, 1971, IN ORDER TO OBTAIN THE FINAL PAYMENT WHICH WAS MADE ON AUGUST 6, 1971.

THEREAFTER THE CONTRACTOR, BY LETTER DATED SEPTEMBER 3, 1971, SOUGHT TO REINSTATE HIS REQUEST FOR ADDITIONAL PAYMENT CITING ASPR 2 406.4(B)(II) AND 17-204.3(II) AS AUTHORITY FOR SUCH ACTION. THE REQUEST WAS DENIED ON THE BASES THAT THERE WAS NO "OBVIOUS MUTUAL ERROR" (ASPR 2-406.4(B)(II)) AND THAT THE CONTRACTOR'S ERROR WAS NOT SO OBVIOUS AS TO BE APPARENT TO THE CONTRACTING OFFICER AND WARRANT RELIEF UNDER PUBLIC LAW 85-804, THE UNDERLYING AUTHORITY FOR ASPR 17-204.3.

THE ISSUE HERE IS WHETHER THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN ON NOTICE OF MISTAKE PRIOR TO THE AWARD. BARRING SUCH ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR ON THE PART OF THE CONTRACTING OFFICER, THE CONTRACTOR MAY OBTAIN NO RELIEF FROM OUR OFFICE.

THERE IS NO DOUBT THAT AN ERROR WAS MADE. IN OUR OPINION IT SHOULD HAVE BEEN NOTED BY THE CONTRACTING OFFICER ON RECEIPT AND EXAMINATION OF THE PROPOSAL. THE FORM 633-4 WAS FORWARDED BY THE GOVERNMENT TO MRI AND ON ITS EXECUTION AND RETURN BECAME AN INTEGRAL PART OF THE PROPOSAL. FURTHER, WHERE, AS HERE, THERE IS ONLY ONE PROPOSAL AND THE ACCEPTED OFFER GREW OUT OF A SUCCESSIVE MODIFICATION OF REQUIREMENTS, WE BELIEVE THE DOCUMENTS SUPPORTING THE PROPOSAL SHOULD HAVE BEEN EXAMINED. IN THIS CASE, ANY REASONABLE EXAMINATION OF THE FORM 633-4 WOULD HAVE REVEALED THE POSSIBILITY OF ERROR AND CALLED FOR VERIFICATION. SEE B-165055, AUGUST 28, 1968.

WE DO NOT BELIEVE THE WITHDRAWAL OF THE PROTEST SHORTLY BEFORE THE "FINAL PAYMENT" IS PARTICULARLY MATERIAL. THE GOVERNMENT WAS ON NOTICE OF THE EXISTENCE OF THE MISTAKE AND ADVISED THAT IT WAS A MATTER FOR CONSIDERATION BY OUR OFFICE. THE CONTRACTOR RELIED ON THIS ADVICE, LET THE RELEASE, PREVIOUSLY SIGNED, STAND AND PRESENTED HIS CLAIM HERE. WHILE NOT STATED IN SPECIFIC TERMS WE BELIEVE FINAL PAYMENT WAS RECEIVED WITH EXCEPTIONS OR RESERVATIONS NOTED. CF. CHRIS BERG, INC. V UNITED STATES, 192 CT. CLS. 176 (1970). SEE ALSO B-168128, JULY 13, 1955.

THE RELEASE WAS EXECUTED PRIOR TO THE TIME THE CONTRACTOR BECAME AWARE OF THE ERROR. THEREFORE, THE RELEASE DOES NOT PRECLUDE CONSIDERATION OF THE CLAIM. SEE 30 COMP. GEN. 335 (1951). NOR IS CONSIDERATION OF THE MISTAKE PRECLUDED BY THE FACT THAT NO ERROR WAS ALLEGED UNTIL COMPLETION OF THE WORK.

AS NOTED IN THE ADMINISTRATIVE REPORT, THERE IS NO ASSURANCE THAT THE CONTRACTING OFFICER WOULD HAVE AGREED TO A PRICE $2,900 IN EXCESS OF WHAT HE CONSIDERED TO BE THE PRICE OFFERED BY MRI. HOWEVER, SINCE WE CONCLUDE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR, THE CONTRACTOR CANNOT LEGALLY BE HELD TO THE CONTRACT PRICE. SEE 48 COMP. GEN. 672 (1969). IN THE CIRCUMSTANCES THE CONTRACTOR IS ENTITLED TO BE PAID A FAIR AND REASONABLE PRICE. ABSENT A SHOWING TO THE CONTRARY, THE INTENDED PRICE SHOULD BE REGARDED AS MEETING THAT STANDARD IN THIS CASE.

ACCORDINGLY, IF PROPER IN OTHER RESPECTS, MRI MAY BE PAID $2,900. A COPY OF THIS DECISION SHOULD ACCOMPANY THE VOUCHER ON WHICH PAYMENT IS MADE.