B-175386, JUN 1, 1972

B-175386: Jun 1, 1972

Additional Materials:

Contact:

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

 

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

IN VIEW OF THE CLOSE RANGE IN THE BID PRICES RECEIVED AND SINCE AT THE TIME OF AWARD THE CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR. ROBERTS' REQUEST FOR AN INCREASE IN THE CONTRACT PRICE IS DENIED. SECRETARY: REFERENCE IS MADE TO A LETTER DATED MARCH 2. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE ROBERTS SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DOT-FA71PC-766 WAS BASED. THE BID OF ROBERTS WAS ACCEPTED AS TO THOSE ITEMS ON JANUARY 15. HAD MADE A MISTAKE IN PREPARING ITS QUOTATION TO ROBERTS WHICH WAS USED IN COMPUTING THE BID PRICES IN QUESTION IN THAT PACIFIC HAD FAILED TO INCLUDE IN ITS QUOTED PRICES THE COST OF FACE FLANGE GASKETS.

B-175386, JUN 1, 1972

CONTRACTS - ALLEGED BID ERROR - REQUEST FOR INCREASE IN PRICE CONCERNING WHETHER A CONTRACT AWARDED TO THE ROBERTS SUPPLY CO. UNDER AN IFB ISSUED BY THE FEDERAL AVIATION ADMINISTRATION SHOULD BE AMENDED DUE TO AN ALLEGED ERROR IN BID. IN VIEW OF THE CLOSE RANGE IN THE BID PRICES RECEIVED AND SINCE AT THE TIME OF AWARD THE CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR, ROBERTS' REQUEST FOR AN INCREASE IN THE CONTRACT PRICE IS DENIED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED MARCH 2, 1972, WITH ENCLOSURES, FROM THE DIRECTOR, LOGISTICS SERVICE, LG-1, FEDERAL AVIATION ADMINISTRATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE ROBERTS SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. DOT-FA71PC-766 WAS BASED.

THE FEDERAL AVIATION ADMINISTRATION, PACIFIC REGION, HONOLULU, HAWAII, BY INVITATION FOR BIDS (IFB) NO. PC64-1-766 REQUESTED BIDS UNDER ITEMS 1 THROUGH 5 FOR GATE VALVES, CHECK VALVES AND BALL VALVES OF VARIOUS SIZES. THE ROBERTS SUPPLY COMPANY SUBMITTED A BID DATED AUGUST 22, 1970, OFFERING TO FURNISH THE VALVES DESCRIBED OPPOSITE ITEMS 1A, 1B, 1C, 1D, 3 AND 4 AT THE PRICES SET FORTH OPPOSITE EACH ITEM. THE BID OF ROBERTS WAS ACCEPTED AS TO THOSE ITEMS ON JANUARY 15, 1971, IN THE TOTAL AMOUNT OF $21,937.90.

BY LETTER DATED FEBRUARY 19, 1971, ROBERTS ADVISED THE CONTRACTING OFFICER THAT ITS SUPPLIER, PACIFIC VALVES, INC; HAD MADE A MISTAKE IN PREPARING ITS QUOTATION TO ROBERTS WHICH WAS USED IN COMPUTING THE BID PRICES IN QUESTION IN THAT PACIFIC HAD FAILED TO INCLUDE IN ITS QUOTED PRICES THE COST OF FACE FLANGE GASKETS, STAINLESS STEEL BOLTS, NUTS, AND WASHERS IN EACH OF THE BID ITEMS. ROBERTS STATED THAT THESE ACCESSORY ITEMS ARE NOT NORMALLY FURNISHED BY THE VALVE MANUFACTURER AND THAT PACIFIC THEREFORE DID NOT INCLUDE PRICES FOR THEM IN ITS QUOTED PRICES. ROBERTS REQUESTED THAT IT EITHER BE PERMITTED TO FURNISH THE VALVES WITHOUT THE ACCESSORY ITEMS AT ITS BID PRICES OR THAT THE CONTRACT UNIT PRICES FOR ITEMS 1A, 1B, 1C, 1D, 3 AND 4 BE INCREASED TO COVER THE COST OF THE ACCESSORY ITEMS. THE TOTAL AMOUNT OF THE INCREASE WOULD AMOUNT TO $1,925.10.

IN A LETTER DATED MAY 14, 1971, ROBERTS ADVISED THAT PACIFIC HAS REFUSED TO FURNISH THE VALVES UNLESS THE PRICE THEREOF IS INCREASED TO COVER THE COST OF THE ACCESSORY ITEMS. IN SUPPORT OF THE ALLEGATION OF ERROR, ROBERTS HAS SUBMITTED ITS WORKSHEET, A COPY OF THE QUOTATION RECEIVED FROM PACIFIC, WHICH WAS MADE ON A COPY OF IFB-766, AND A COPY OF PACIFIC'S STANDARD PRICE SHEET SS7-70 FOR VALVES.

IT IS REPORTED THAT THE KEY PIPE & SUPPLY COMPANY OFFERED LOW BIDS ON ALL ITEMS FOR AN AGGREGATE TOTAL PRICE OF $21,107.72 AND THAT UPON ALLEGATION OF ERROR IN ITS BID, THE COMPANY WAS PERMITTED TO WITHDRAW ITS BID. THE AGGREGATE TOTAL EVALUATED BID PRICE OF ROBERTS ON THE ABOVE ITEMS WAS IN THE AMOUNT OF $21,500.14 (DISCOUNTED) AND THE NEXT LOWEST AGGREGATE TOTAL BID PRICE ON THESE ITEMS WAS IN THE AMOUNT OF $21,859.36 (DISCOUNTED). OTHER AGGREGATE BIDS RANGED FROM $23,457.51 TO $23,600.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ITS ACCEPTANCE. AT THE TIME OF ACCEPTANCE, THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR IN THE ROBERTS' BID AND, IN VIEW OF THE CLOSE RANGE IN THE PRICES RECEIVED, WE CANNOT SAY THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE LIKELIHOOD OF ERROR IN THE BID. ALTHOUGH, AFTER AWARD, ROBERTS FURNISHED EVIDENCE TENDING TO SUPPORT ITS ALLEGATION OF ERROR, IT DOES NOT APPEAR THAT PRIOR TO AWARD THE CONTRACTING OFFICER HAD KNOWLEDGE OF THE DIFFERENT FACTORS USED BY THE COMPANY IN COMPUTING ITS BID PRICES. THE ACCEPTANCE OF THE BID, IN THESE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. MOREOVER, SINCE ROBERTS, AS PRIME CONTRACTOR, APPARENTLY FAILED TO QUESTION THE ACCURACY OF THE QUOTATION OF PACIFIC VALVES, INC; THERE WOULD APPEAR TO BE EVEN LESS BASIS FOR EXPECTING THE CONTRACTING OFFICER TO QUESTION THE BID.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR PAYING ANY AMOUNT IN EXCESS OF THE CONTRACT PRICE AND ..END :