B-175734, JUN 1, 1972

B-175734: Jun 1, 1972

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ITEM 120 WAS ADVERTISED FOR SALE AS ELECTRICAL AND ELECTRONIC SCRAP. ITEM 121 WAS ADVERTISED AS ELECTRICAL AND ELECTRONIC. BASED UPON THE ABOVE AND THE FACTS THAT THE ESTIMATED VALUE OF ITEMS 120 AND 121 WAS LISTED AS $0.035 PER POUND AND INCLUDED RECOVERABLE USABLE PROPERTY. HORNE TELEPHONED THE SCO AND ALLEGED A MISTAKE IN HIS BID BECAUSE THE BID FOR ITEM 120 WAS INTENDED TO APPLY TO ITEM 121 AND THE BID FOR ITEM 121 WAS INTENDED FOR ITEM 122. WHICH WAS LISTED FOR SALE AS COPPER. 121 AND 122 WERE ALL LISTED AS 30. 000 POUNDS MAY WELL HAVE CONTRIBUTED TO HORNE'S ERROR. IT IS RECOMMENDED BY THE DEFENSE LOGISTICS SERVICES CENTER. WE HAVE OFTEN STATED THAT ACCEPTANCE OF A BID BY A CONTRACTING OFFICER WHEN HE KNEW OR SHOULD HAVE KNOWN OF THE EXISTENCE OF AN ERROR IN THE BID DOES NOT RESULT IN A VALID AND BINDING CONTRACT ABSENT VERIFICATION. 51 COMP.

B-175734, JUN 1, 1972

PROCUREMENT LAW - ERROR IN BID - REQUEST FOR REFORMATION AND RECISSION CONCERNING A REQUEST OF SYLVAN OWEN HORNE FOR REFORMATION AND RECISSION OF A CONTRACT AWARDED BY THE DEFENSE SUPPLY AGENCY DUE TO AN ALLEGED ERROR IN BID. EXPEDIENCY CANNOT OBVIATE THE CONTRACTING OFFICER'S DUTY TO VERIFY SUSPECTED BID ERRORS PURSUANT TO DEFENSE DISPOSAL MANUAL DOD 4160. 21 M, PART 3, CHAPTER X, SECTION A1. ACCORDINGLY, THE CONTRACT MAY BE REFORMED AS ADMINISTRATIVELY RECOMMENDED.

TO GENERAL WALLACE H. ROBINSON:

BY LETTER DSAH-G DATED APRIL 17, 1972, THE ASSISTANT COUNSEL FORWARDED FOR DECISION BY OUR OFFICE THE REQUEST OF SYLVAN OWEN HORNE (HORNE) FOR REFORMATION AND RESCISSION OF CONTRACT NO. 37-2119-058 FOR ITEMS 120 AND 121, RESPECTIVELY, BECAUSE OF AN ERROR IN BID.

ITEM 120 WAS ADVERTISED FOR SALE AS ELECTRICAL AND ELECTRONIC SCRAP, 30,000 POUNDS; ITEM 121 WAS ADVERTISED AS ELECTRICAL AND ELECTRONIC, RESIDUE, SCRAP, 30,000 POUNDS. ON THE BID SHEET PROVIDED FOR SUBMISSION OF BIDS, HORNE ENTERED UNIT BIDS OF $0.02763 FOR ITEM 120 AND $0.13754 FOR ITEM 121. THE ABSTRACT OF BIDS EVINCES THE ONLY OTHER BID FOR ITEM 120 AS $0.00577 PER POUND AND THOSE ON ITEM 121 AS $0.01567, $0.01384 AND $0.0131 PER POUND.

THE SALES CONTRACTING OFFICER (SCO) REPORTED THAT DURING THE COURSE OF BID EVALUATION HE NOTICED THE DISPARITY BETWEEN HORNE'S BIDS AND THE OTHER BIDS FOR BOTH ITEMS. CONSEQUENTLY, THE SCO ATTEMPTED, ALBEIT UNSUCCESSFULLY, TO CONTACT HORNE TO VERIFY HIS BID FOR ITEM 121 ON MARCH 16 AND 17. THEREAFTER, THE SCO VERIFIED THAT HORNE HAD PERSONALLY INSPECTED THE PROPERTY OFFERED UNDER INVITATION FOR BIDS (IFB) 37-2119 ON MARCH 10. BASED UPON THE ABOVE AND THE FACTS THAT THE ESTIMATED VALUE OF ITEMS 120 AND 121 WAS LISTED AS $0.035 PER POUND AND INCLUDED RECOVERABLE USABLE PROPERTY, ALTHOUGH NOT LISTED AS SUCH, THE SCO AWARDED HORNE CONTRACT NO. 37-2119-058 FOR ITEMS 120 AND 121 ON MARCH 20, 1971.

UPON DISCOVERY OF THE AWARD, HORNE TELEPHONED THE SCO AND ALLEGED A MISTAKE IN HIS BID BECAUSE THE BID FOR ITEM 120 WAS INTENDED TO APPLY TO ITEM 121 AND THE BID FOR ITEM 121 WAS INTENDED FOR ITEM 122, WHICH WAS LISTED FOR SALE AS COPPER, WIRE AND CABLE, INSULATED, SCRAP, 30,000 POUNDS. IN SUPPORT OF HIS ALLEGATION, HORNE SUBMITTED HIS WORKSHEETS AND COVER LETTER DATED MARCH 20, 1972, WHICH CLAIM THAT HORNE INADVERTENTLY INSERTED ITEM 120 FOR ITEM 121 AND COMPOUNDED HIS ERROR BY INSERTING THE NEXT SEQUENTIAL NUMBER WITHOUT REFERRING TO THE IFB. WE NOTE, IN THIS REGARD, THE FACT THAT ITEMS 120, 121 AND 122 WERE ALL LISTED AS 30,000 POUNDS MAY WELL HAVE CONTRIBUTED TO HORNE'S ERROR.

BASED UPON THE FOREGOING, IT IS RECOMMENDED BY THE DEFENSE LOGISTICS SERVICES CENTER, CONTRARY TO THE RECOMMENDATION OF THE SCO, THAT CONTRACT 37-2119-058 BE REFORMED BY THE DELETION OF ITEM 120 WITHOUT LIABILITY TO HORNE AND ITEM 121 BE REFORMED TO REFLECT A UNIT PRICE OF $0.02763 INSTEAD OF $0.13754.

WITH REGARD TO ITEM 121, THE SCO HAS STATED THAT HE SUSPECTED AN ERROR IN HORNE'S BID BUT PROCEEDED TO AWARD WITHOUT BENEFIT OF VERIFICATION IN THE INTEREST OF EXPEDIENCY. HOWEVER, WE HAVE OFTEN STATED THAT ACCEPTANCE OF A BID BY A CONTRACTING OFFICER WHEN HE KNEW OR SHOULD HAVE KNOWN OF THE EXISTENCE OF AN ERROR IN THE BID DOES NOT RESULT IN A VALID AND BINDING CONTRACT ABSENT VERIFICATION. 51 COMP. GEN. (B-174439, FEBRUARY 8, 1972). WE DO NOT BELIEVE THAT THE NEED FOR A PROMPT AWARD OBVIATES THE DUTY TO VERIFY SUSPECTED BID ERRORS IMPOSED UPON A CONTRACTING OFFICER BY DEFENSE DISPOSAL MANUAL DOD 4160.21-M, PART 3, CHAPTER X, SECTION A1.

IN THE CIRCUMSTANCES, IT IS REASONABLE TO ASSUME THAT HAD THE SCO REQUESTED VERIFICATION FROM HORNE, HE WOULD HAVE DISCOVERED HIS MISTAKE AND WOULD HAVE ASSERTED HIS CLAIM FOR RELIEF. WE BELIEVE THE FAILURE TO VERIFY THE BID IS SUFFICIENT BASIS FOR CONTRACT REFORMATION AS ADMINISTRATIVELY RECOMMENDED.

CONCERNING ITEM 120, IT IS ALSO EVIDENT THAT HAD THE SCO REQUESTED VERIFICATION OF ITEM 121, HORNE'S ERROR ON ITEM 120 WOULD HAVE BEEN DISCOVERED. IT FOLLOWS THAT HAD THE SCO FULFILLED HIS VERIFICATION OBLIGATION, HE WOULD HAVE HAD ACTUAL NOTICE OF THE ERROR ON ITEM 120. VIEW OF THIS, ITEM 120 MAY BE REMOVED FROM THE CONTRACT WITHOUT LIABILITY TO HORNE.