B-174616, FEB 14, 1972

B-174616: Feb 14, 1972

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

A UNILATERAL MISTAKE IN BIDDING WILL ONLY EXCUSE A SUCCESSFUL BIDDER IF THE CONTRACTING OFFICER KNEW OR SHOULD HAVE BEEN ON NOTICE OF THE ERROR AND FAILED TO REQUEST VERIFICATION. A WIDE RANGE OF BID PRICES ARE ORDINARILY RECEIVED FOR SURPLUS PROPERTY AND THE SUBJECT BID. WAS SUBSTANTIALLY LOWER THAN THE INITIAL COST PRICES. IT WOULD BE UNREASONABLE TO EXPECT THE CONTRACTING OFFICER TO HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR. TO ENGINEERING DEVELOPMENT CORPORATION: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 23. ALTHOUGH YOUR BID SHEET WAS SIGNED BY YOUR PRESIDENT. YOUR REQUEST FOR RELIEF IS BASED ON THE CLAIM THAT THE BID WAS FILLED OUT BY AN EMPLOYEE WHO WAS WITHOUT AUTHORITY TO DO SO.

B-174616, FEB 14, 1972

CONTRACTS - MISTAKE IN BID - REQUEST FOR RELIEF DECISION DENYING A REQUEST FOR RELIEF OF THE ENGINEERING DEVELOPMENT CORPORATION ON A CONTRACT AWARDED BY THE DEFENSE SURPLUS SALES OFFICE, OGDEN, UTAH, FOR THE PURCHASE OF TRACTOR PARTS. A UNILATERAL MISTAKE IN BIDDING WILL ONLY EXCUSE A SUCCESSFUL BIDDER IF THE CONTRACTING OFFICER KNEW OR SHOULD HAVE BEEN ON NOTICE OF THE ERROR AND FAILED TO REQUEST VERIFICATION. B-167721, SEPTEMBER 11, 1969. A WIDE RANGE OF BID PRICES ARE ORDINARILY RECEIVED FOR SURPLUS PROPERTY AND THE SUBJECT BID, WHILE HIGHER THAN THE CURRENT MARKET APPRAISAL, WAS SUBSTANTIALLY LOWER THAN THE INITIAL COST PRICES. THE REQUEST FOR RELIEF MUST BE DENIED SINCE, IN THESE CIRCUMSTANCES, IT WOULD BE UNREASONABLE TO EXPECT THE CONTRACTING OFFICER TO HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR.

TO ENGINEERING DEVELOPMENT CORPORATION:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 23, 1971, REQUESTING THAT YOU BE GRANTED RELIEF FROM CONTRACT NO. 41-2006-095, AWARDED TO YOUR COMPANY ON JULY 23, 1971, BY THE DEFENSE SURPLUS SALES OFFICE, OGDEN, UTAH, FOR THE PURCHASE OF SIX ITEMS OF TRACTOR PARTS.

ALTHOUGH YOUR BID SHEET WAS SIGNED BY YOUR PRESIDENT, YOUR REQUEST FOR RELIEF IS BASED ON THE CLAIM THAT THE BID WAS FILLED OUT BY AN EMPLOYEE WHO WAS WITHOUT AUTHORITY TO DO SO. YOU EXPLAIN THAT YOUR PRESIDENT UNKNOWINGLY SIGNED A BLANK BID FORM ALONG WITH SOME OTHER PAPERS PRESENTED TO HIM AS HE WAS URGENTLY DEPARTING HIS OFFICE AND THAT THE CLERK WHO NORMALLY FILLS OUT BIDS TOOK IT UPON HIMSELF TO INSERT BIDS ON THIS FORM.

IT IS A STANDARD PRINCIPLE OF LAW THAT A PURCHASER'S UNILATERAL MISTAKE IN BIDDING WILL NOT EXCUSE HIM FROM A CONTRACT SUBSEQUENTLY AWARDED UNLESS THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE MISTAKE. CORBIN ON CONTRACTS 610; B-167721, SEPTEMBER 11, 1969, AND CASES CITED THEREIN. AS THE BID RECEIVED BY THE CONTRACTING OFFICER WAS PROPERLY SIGNED, HE COULD HAVE KNOWN OF AN ERROR ONLY IF ONE WAS APPARENT FROM CIRCUMSTANCES ON THE FACE OF THE BID. THE ADMINISTRATIVE REPORT INDICATES THAT YOUR PRICES WERE SUBSTANTIALLY HIGHER THAN THE CURRENT MARKET APPRAISAL AND THE NEXT HIGH BIDS. HOWEVER, IN VIEW OF THE WIDE RANGE OF BID PRICES ORDINARILY RECEIVED FOR SURPLUS PROPERTY, A DISPARITY IN BID PRICES WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF AN ERRONEOUS BID AS WOULD A SIMILAR DISPARITY IN THE PRICES QUOTED FOR NEW EQUIPMENT. UNITED STATES V SABIN METAL CORP., 151 F. SUPP. 683 (1957), AFFIRMED 253 F. 2D 956 (1958); WENDER PRESSES, INC., V UNITED STATES, 343 F. 2D 961 (1965); B-173818, OCTOBER 19, 1971. THE ADMINISTRATIVE REPORT STATES THAT THE DEFENSE SUPPLY AGENCY DENIED YOUR REQUEST FOR RELIEF ONLY AFTER "CONSIDERATION WAS GIVEN TO ALL OF THE CIRCUMSTANCES INCLUDING THE FACT THAT ALL THE ITEMS WERE LISTED AS UNUSED AND IN GOOD CONDITION.

WE ARE AWARE OF NO LEGAL THEORY THAT WOULD PERMIT RELIEF UNDER THE PECULIAR CIRCUMSTANCES OF THIS CASE. HOWEVER, ALTHOUGH THIS MATTER IS NOT WITHIN THE NORMAL FRAMEWORK OF MISTAKE IN BID CASES, WE HAVE CONSIDERED THE POSSIBILITY OF ACTUAL OR IMPUTED NOTICE TO THE CONTRACTING OFFICER OF PROBABLE ERROR IN YOUR BID, AS THIS WOULD PROVIDE THE ONLY POSSIBLE GROUNDS FOR RELIEF. WE HAVE COMPARED THE BID PRICES, THE CURRENT MARKET APPRAISAL, AND THE ORIGINAL COST PRICES, AND NOTE THAT WHILE YOUR BIDS WERE HIGHER THAN THE CURRENT MARKET APPRAISAL, THEY WERE SUBSTANTIALLY LOWER THAN THE INITIAL COST PRICES. UNDER THE CIRCUMSTANCES, WE DO NOT BELIEVE THAT THE DIFFERENCE IN BID PRICES CONSTITUTED ANY BASIS TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF A PROBABLE ERROR. WHILE WE ARE NOT PASSING ON WHAT THE RESULTS WOULD BE IF THIS WERE A PRE-AWARD CASE, WE MUST CONCLUDE THAT THE AWARD MADE HEREIN CREATED A VALID AND BINDING CONTRACT.

WE REGRET THAT THERE IS NO LEGAL BASIS FOR RESCINDING THE CONTRACT AND THAT YOUR REQUEST FOR RELIEF MUST BE DENIED.