B-174439, FEB 8, 1972, 51 COMP GEN 488

B-174439: Feb 8, 1972

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UNIT PRICE BASIS NOTWITHSTANDING A CLAUSE IN THE INVITATION OFFERING STEEL BOLTS FOR SALE ON A LOT BASIS PROVIDED THAT IN THE EVENT A TOTAL BID PRICE AND UNIT BID PRICE WERE NOT IN AGREEMENT. "THE UNIT BID PRICE WILL NOT BE CONSIDERED. " THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRICE PRIOR TO AWARD WHERE THE BID ON AN ITEM APPRAISED AT $100 WAS $477.25. WAS CORRECT FOR THE ITEM BELOW THE ITEM BID ON. THE CURRENT MARKET APPRAISAL FOR ITEM 171 WAS $100. SKYWAYS STATED THAT IT WAS BIDDING ON ITEM 171. THAT ITS UNIT PRICE BID WAS $0.23. THAT THE TOTAL PRICE BID WAS $477.25. AWARD WAS MADE TO SKYWAY AS THE HIGHEST RESPONSIVE BIDDER ON ITEM 171. SKYWAY ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID UPON WHICH THE CONTRACT WAS BASED IN THAT THE BID ON ITEM 171 WAS INTENDED FOR ITEM 172.

B-174439, FEB 8, 1972, 51 COMP GEN 488

SALES - BIDS - MISTAKES - LOT V. UNIT PRICE BASIS NOTWITHSTANDING A CLAUSE IN THE INVITATION OFFERING STEEL BOLTS FOR SALE ON A LOT BASIS PROVIDED THAT IN THE EVENT A TOTAL BID PRICE AND UNIT BID PRICE WERE NOT IN AGREEMENT, "THE UNIT BID PRICE WILL NOT BE CONSIDERED," THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRICE PRIOR TO AWARD WHERE THE BID ON AN ITEM APPRAISED AT $100 WAS $477.25, AND OTHER BIDS RANGED FROM $7 TO $82, SINCE THE UNIT PRICE MULTIPLIED BY ANY OF THE QUANTITIES IN THE LOT ITEM DID NOT RESULT IN THE TOTAL PRICE BID, BUT WAS CORRECT FOR THE ITEM BELOW THE ITEM BID ON, AND AS THE DEFENSE DISPOSAL MANUAL DOD 4160.21-M REQUIRES A SALES CONTRACTING OFFICER TO EXAMINE ALL BIDS FOR MISTAKES AND TO REQUEST VERIFICATION FROM THE BIDDER IN CASES OF APPARENT MISTAKE, EVEN THOUGH THE SALES TERMS INDICATE OTHERWISE, THE CONTRACT AWARDED SHOULD BE CANCELLED AND THE BID DEPOSIT REFUNDED. B-173163, DATED OCTOBER 1, 1971, MODIFIED.

TO THE DIRECTOR, DEFENSE SUPPLY AGENCY, FEBRUARY 8, 1972:

BY LETTER DSAH-G DATED OCTOBER 29, 1971, THE ASSOCIATE COUNSEL FORWARDED FOR DECISION BY OUR OFFICE THE REQUEST OF SKYWAY AIR PARTS COMPANY, INC., FOR RECISSION OF ITEM 171 IN SALES CONTRACT 21-2015-272 BECAUSE OF AN ERROR IN BID.

ITEM 171 ADVERTISED FOR SALE ON A LOT BASIS VARIOUS LENGTHS AND SIZES OF STEEL BOLTS ESTIMATED TO WEIGH 627 POUNDS. THE CURRENT MARKET APPRAISAL FOR ITEM 171 WAS $100. ON THE BID SHEET PROVIDED FOR THE SUBMISSION OF BIDS, SKYWAYS STATED THAT IT WAS BIDDING ON ITEM 171; THAT ITS UNIT PRICE BID WAS $0.23; AND THAT THE TOTAL PRICE BID WAS $477.25. FOURTEEN OTHER BIDS ON ITEM 171, SUBMITTED ON A LOT BASIS, RANGED FROM $7 TO $82. AWARD WAS MADE TO SKYWAY AS THE HIGHEST RESPONSIVE BIDDER ON ITEM 171.

SUBSEQUENTLY, SKYWAY ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID UPON WHICH THE CONTRACT WAS BASED IN THAT THE BID ON ITEM 171 WAS INTENDED FOR ITEM 172. SKYWAY CONTENDED THAT THE CONTRACTING OFFICER SHOULD HAVE KNOWN OF THE POSSIBILITY OF ERROR SINCE THERE WAS NO CORRELATION BETWEEN THE UNITS STATED IN ITEM 171, THE UNIT PRICE AND THE EXTENDED TOTAL PRICE. ITEM 172 OFFERED FOR SALE ON A UNIT BASIS 2,075 STRAIGHT ADAPTERS. APPLICATION OF THE $0.23 UNIT PRICE QUOTED ON ITEM 171 TO ITEM 172 RESULTS IN AN EXTENDED PRICE OF $477.25, THE TOTAL PRICE BID ON ITEM 171.

THE CONTRACTING OFFICER HAS RECOMMENDED AGAINST RESCISSION OF ITEM 171 OF THE CONTRACT ON THE GROUND THAT UNDER THE TERMS OF THE SALE THE UNIT PRICE BID WAS NOT FOR CONSIDERATION. IN THAT REGARD, THE CONTRACTING OFFICER REFERS TO THE INVITATION CLAUSE THAT PROVIDED:

*** WHEN BIDS ARE SOLICITED ON A "LOT" BASIS, BIDDERS SHOULD SUBMIT A SINGLE TOTAL PRICE IN THE TOTAL PRICE BID COLUMN ON THE BID SHEET. BIDDERS SHOULD NOT MAKE ANY ENTRY IN THE UNIT PRICE BID COLUMN. IN THE EVENT A BIDDER SUBMITS A TOTAL BID PRICE AND ALSO A UNIT BID PRICE WHICH ARE NOT IDENTICAL, THE UNIT BID PRICE WILL NOT BE CONSIDERED.

THE ASSOCIATE COUNSEL HAS ADVISED THAT DSA BELIEVES THAT THERE WAS A CLEAR INDICATION OF ERROR IN THE BID AND THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO AWARD SINCE THE UNIT PRICE MULTIPLIED BY ANY OF THE QUANTITIES SHOWN IN ITEM 171 WOULD NOT HAVE RESULTED IN THE TOTAL PRICE ENTERED BY THE BIDDER ON THE BID SHEET. HOWEVER, IN VIEW OF OUR DECISION B-173163, OCTOBER 1, 1971, COUNSEL HAS SUBMITTED THE MATTER FOR OUR CONSIDERATION.

IN THE CITED CASE, THE BIDDER QUOTED ON A LOT ITEM A UNIT PRICE ($0.022) AND AN EXTENDED PRICE ($203.71) THAT DID NOT AGREE. THE ITEM DESCRIPTION CONTAINED TWO UNITS OF MEASURE. APPLYING THE UNIT PRICE TO ONE UNIT OF MEASURE (LENGTH) RESULTED IN AN EXTENDED PRICE OF $50.71. APPLYING THE UNIT PRICE TO THE OTHER (WEIGHT) RESULTED IN AN EXTENDED PRICE OF $170.50. THE OTHER BIDS ON THE ITEM RANGED FROM $26 TO $162.75. THE CONTRACTING OFFICER REQUESTED THE $203.71 BIDDER TO VERIFY ITS BID. THIS THE BIDDER DID BUT SINCE IT DID NOT FURNISH EVIDENCE OF THE INTENDED BID, THE CONTRACTING OFFICER MADE AWARD TO THE $162.75 BIDDER. THE $203.71 BIDDER PROTESTED THE AWARD.

IN THE CITED DECISION, IT WAS HELD THAT THE ABOVE-QUOTED TERMS OF THE INVITATION OBVIATE THE NECESSITY OF VERIFYING THE APPARENT UNIT AND TOTAL BID PRICE VARIATIONS AND THAT WHERE THE CONTRACTING OFFICER DID HAVE THE BIDDER VERIFY THAT THE TOTAL BID PRICE WAS CORRECT, THE BID SHOULD HAVE BEEN ACCEPTED AS CONTEMPLATED BY THE SALES INVITATION WITHOUT ANYTHING MORE.

COUNSEL HAS QUESTIONED THE DECISION SINCE IN SURPLUS SALES BIDDERS DO NOT BID ON A SHEET PREPRINTED WITH ITEM NUMBERS, BUT RATHER ARE REQUIRED TO WRITE THE ITEM NUMBERS BEING BID UPON ON THE BID SHEET, AND IT IS A COMMON ERROR FOR BIDDERS TO INSERT THE WRONG ITEM NUMBER ON THE BID SHEET. THEREFORE, TO ACCEPT THE EXTENDED PRICE AS CONTROLLING WITHOUT REGARD TO THE REST OF THE INFORMATION IN THE BID ON THE ITEM WILL RESULT IN AWARDS BEING MADE TO BIDDERS FOR ITEMS THEY DID NOT INTEND TO BID UPON. IT IS INDICATED THAT REQUESTING VERIFICATION PROVIDES THE BIDDER WITH AN OPPORTUNITY OF SHOWING THAT THE WRONG ITEM HAS BEEN BID UPON. FURTHER, IT IS STATED THAT WHERE THE BIDDER IS ALLOWED TO VERIFY ONE OF THE TWO INCONSISTENT PRICES AS THE INTENDED BID WITHOUT SOME EVIDENCE IN THE BID THAT SUBSTANTIALLY ESTABLISHES THE VERIFIED PRICE, THE VERIFICATION IS NOT SUFFICIENT TO OVERCOME THE SUSPICION OF ERROR AND WOULD BE UNFAIR TO OTHER BIDDERS DISPLACED BY THE VERIFICATION. IN THE ABSENCE OF EVIDENCE IN THE BID SUBSTANTIALLY ESTABLISHING THE VERIFIED PRICE AS THE INTENDED PRICE, IT IS SUGGESTED THAT THE BID SHOULD BE DISREGARDED.

UPON FURTHER REVIEW OF THE MATTER, WE OBSERVE THAT DEFENSE DISPOSAL MANUAL DOD 4160.21-M, PART 3, CHAPTER X, SECTION A1, REQUIRES THE SALES CONTRACTING OFFICER TO EXAMINE ALL BIDS FOR MISTAKE. THUS, EVEN THOUGH THE SALES TERMS INDICATE AN INTENTION THAT THE UNIT PRICE SUBMITTED ON A LOT ITEM NOT BE CONSIDERED, THE CONTRACTING OFFICER COULD NOT DISCHARGE THE RESPONSIBILITY IMPOSED BY THE MANUAL WHEN THE UNIT PRICE QUOTED IS INCONSISTENT WITH THE TOTAL PRICE AND SUGGESTS THE POSSIBILITY OF MISTAKE IN THE BID. FURTHER, THE DOD SECTION QUOTED ABOVE REQUIRES THE CONTRACTING OFFICER TO REQUEST VERIFICATION FROM THE BIDDER IN CASES OF APPARENT MISTAKE. THEREFORE, WE BELIEVE THAT WHERE THERE IS AN INCONSISTENCY BETWEEN THE UNIT AND EXTENDED PRICES IN THE BID, THE CONTRACTING OFFICER HAS A RESPONSIBILITY TO VERIFY THE BID.

FURTHER, OUR OFFICE HAS HELD THAT CORRECTION OF AN ERRONEOUS BID WILL NOT BE PERMITTED WHEN TO DO SO WOULD RESULT IN DISPLACEMENT OF AN OSTENSIBLE SUCCESSFUL BIDDER. 37 COMP. GEN. 210 (1957). THE ONLY EXCEPTION TO THIS RULE IS WHERE THE ERROR IS OBVIOUS AND THE INTENDED PRICES CAN BE ASCERTAINED FROM THE BID FROM ITSELF WITHOUT RESORT TO EXTRANEOUS WORKSHEETS OR OTHER BID DOCUMENTS. SEE B-169688, MAY 27, 1970; B-157914, JANUARY 28, 1966; AND B-155537, JANUARY 7, 1965. MOREOVER, IN 50 COMP. GEN. 497, 499 (1971), IT WAS STATED:

*** WHILE IT IS OBVIOUS THAT THERE IS A MISTAKE IN EITHER THE UNIT PRICE OR THE EXTENDED PRICE OF YOUR BID, WE MUST CONCLUDE THAT THE INTENDED BID CANNOT BE ASCERTAINED FROM THE BID FORM ITSELF, SINCE THE ERROR COULD HAVE BEEN IN EITHER THE UNIT OR EXTENDED TOTAL PRICE. CORRECTION TO THE EXTENT AND IN THE MANNER REQUESTED BY YOU WOULD THEREFORE CONFER UPON YOU AN UNFAIR COMPETITIVE ADVANTAGE. WHILE YOU MAINTAIN THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD BE SERVED BY ACCEPTANCE OF YOUR HIGHER BID, IT IS OUR VIEW THAT THE HARM TO THE COMPETITIVE BIDDING SYSTEM WOULD FAR OFFSET ANY PECUNIARY ADVANTAGE GAINED THEREBY. AS WE STATED IN B-166748, MAY 14, 1969, REGARDLESS OF THE GOOD FAITH OF THE BIDDER MAKING A MISTAKE, CORRECTION SHOULD BE DENIED IN ANY CASE IN WHICH THERE EXISTS A REASONABLE BASIS FOR ARGUMENT THAT PUBLIC CONFIDENCE IN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BE ADVERSELY AFFECTED THEREBY.

ACCORDINGLY, WHERE IT CANNOT BE DETERMINED FROM THE BID FORM ALONE WHETHER THE ERROR WAS IN THE UNIT PRICE OR THE TOTAL PRICE, THE BID SHOULD BE DISREGARDED IN THE CONSIDERATION OF BIDS.

IN VIEW OF THE FOREGOING, DECISION B-173163, SUPRA, TO THE EXTENT INCONSISTENT WITH THE HOLDING HEREIN, WILL NO LONGER BE FOLLOWED.

TURNING TO THE IMMEDIATE CASE, WE CONCLUDE ON THE BASIS OF THE FOREGOING PRINCIPLES THAT THERE WAS AN APPARENT ERROR ON THE FACE OF THE SKYWAY BID AND THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO AWARD. HAVING FAILED IN THAT REGARD A VALID CONTRACT FOR ITEM 171 DID NOT COME INTO EXISTENCE. HENCE, THE CONTRACT AWARDED TO SKYWAY SHOULD BE CANCELED AND ITS $100 BID DEPOSIT SHOULD BE REFUNDED.