B-176144, JUL 26, 1972

B-176144, JUL 26, 1972

CONTRACTS - MISTAKE IN BID - REFORMATION DECISION ALLOWING A CONTRACT AWARDED PPG INDUSTRIES FOR THE INSTALLATION OF AUTOMATIC SWING-TYPE DOORS AT THE VA HOSPITAL, PERRY POINT, MD., TO BE AMENDED, AT AN INCREASED PRICE, TO PERMIT PPG TO INSTALL DOORS FOR BOTH ENTRANCES RATHER THAN JUST ONE. THE MISTAKE OF PPG WHEREIN THE FIRM QUOTED A PRICE FOR ONE PAIR OF DOORS FOR ONE ENTRANCE IN RESPONSE TO AN INVITATION THAT REQUESTED BIDS FOR DOOR UNITS (TWO DOORS PER UNIT) IN TWO PREPARED DOORWAY ENTRANCES SHOULD HAVE BEEN RECOGNIZED BY THE CONTRACTING OFFICER SINCE THE BID OF THE BRAND NAME MANUFACTURER, CLEARLY INDICATING IT WAS FOR ONLY "1 PAIR" OF DOORS, WAS $4,618, WHILE THE BID OF PPG OFFERING THE IDENTICAL EQUIPMENT WAS $4,238. THE CONTRACT PRICE IN THIS CASE MAY BE INCREASED TO THE REQUESTED $6,870 (PPG'S COST) EVEN THOUGH THE USUAL RULE ALLOWS THE NEW BID PRICE TO BE ACCEPTED ONLY IF IT IS BELOW THE LEVEL OF THE NEXT ACCEPTABLE BID. THIS CASE, HOWEVER, A SECOND RESPONSIVE BID PRICE FOR DETERMINATION OF AN APPROPRIATE LIMIT WAS NOT ESTABLISHED AND IT SEEMS THAT THE CORRECT BID PRICE OF EITHER PPG OR THE BRAND NAME MANUFACTURER WOULD NOT HAVE BEEN IN EXCESS OF THE PROPOSED ADJUSTED CONTRACT PRICE.

TO MR. DONALD E. JOHNSON:

THIS IS IN REPLY TO THE LETTER DATED MAY 24, 1972, REFERENCE 134C, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, FORWARDING FOR OUR DECISION A MATTER INVOLVING A MISTAKE IN BID ALLEGED AFTER AWARD OF A CONTRACT. SINCE AN ADMINISTRATIVE DETERMINATION IS PRECLUDED WHERE A MISTAKE IN EXCESS OF $1,000 IS ALLEGED AFTER AWARD, THE MATTER WAS FORWARDED HERE FOR DETERMINATION PURSUANT TO FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.406-4(I).

THE INVITATION, NO. 641-30-72, REQUESTED BIDS FOR FURNISHING AND INSTALLING AUTOMATIC SWING-TYPE DOOR UNITS (TWO DOORS PER UNIT) IN TWO PREPARED DOORWAY ENTRANCES TO THE ADMISSION AND EMERGENCY AREAS OF BUILDING 23H AT VETERANS ADMINISTRATION HOSPITAL, PERRY POINT, MARYLAND. SOLICITATIONS WERE EXTENDED TO 14 PROSPECTIVE BIDDERS AND THREE FIRMS RESPONDED, AS FOLLOWS:

PPG INDUSTRIES $4,238.00

DOR-O-MATIC OF MID ATLANTIC STATES 4,618.70

G. W. BLANCHARD CO., INC. 5,433.64

THE RECORD SHOWS THAT DOR-O-MATIC'S BID WAS NONRESPONSIVE, AS IT OFFERED ONLY ONE PAIR OF AUTOMATIC DOORS, AND THAT THE BID OF G. W. BLANCHARD WAS MADE SUBJECT TO CHANGE AND WAS ALSO OTHERWISE NON RESPONSIVE TO THE SPECIFICATIONS. A CONTRACT WAS THEREFORE AWARDED TO PPG, THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER, ON DECEMBER 28, 1971, AT ITS BID PRICE.

THE CONTRACTING OFFICER HAS REPORTED THAT THE ALLEGED MISTAKE FIRST CAME TO HIS ATTENTION UPON RECEIPT OF PPG'S LETTER DATED JANUARY 11, 1972, WHEREIN THE FIRM ALLEGED THAT ITS BID PRICE WAS FOR ONLY ONE PAIR OF DOORS FOR ONE ENTRANCE, AND HAD IT BEEN BIDDING ON BOTH ENTRANCES, ITS BID PRICE WOULD HAVE BEEN DOUBLED. PPG HAS NOW OFFERED, HOWEVER, TO FURNISH AND INSTALL DOORS FOR BOTH ENTRANCES AT ITS COST, WHICH IS $6,870. BY LETTER OF JANUARY 29, 1972, PPG SUBMITTED A BREAKDOWN OF ITS COSTS FOR THE WORK AND ON APRIL 18 THE FIRM SUBMITTED ITS WORKSHEETS FOR ITS BID, WHICH ESTABLISH THE MISTAKE.

THE SUBMISSION RECOMMENDS THAT THE CONTRACT BE AMENDED TO PERMIT PPG TO FURNISH AND INSTALL DOORS FOR BOTH ENTRANCES AT ITS COST, WHICH PRICE THE CONTRACTING OFFICER CONSIDERS REASONABLE.

OUR REVIEW OF THE INVITATION SHOWS THAT THE ADVERTISED SPECIFICATIONS LISTED "DOR-O-MATIC" PART AND MODEL NUMBERS AND PROVIDED THAT "OTHER UNITS THAT CAN COMPLY WITH SPECIFICATIONS WILL BE ACCEPTABLE IF THEY FIT EXISTING SPECIFIED OPENINGS." INASMUCH AS THE BID OF THE BRAND NAME MANUFACTURER CLEARLY INDICATED IT WAS OFFERING ONLY "1 PAIR" OF DOORS AT A PRICE OF $4,618.70 (WHICH WOULD SATISFY THE REQUIREMENTS OF JUST ONE ENTRANCE), AND THE BID OF PPG OFFERED THE IDENTICAL "DOR-O MATIC" EQUIPMENT FOR BOTH ENTRANCES (TWO PAIRS) AT A PRICE OF $4,238, WE ARE OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARD OF THE PROBABILITY OF AN ERROR IN PPG'S BID. IN SUCH CIRCUMSTANCES, PPG SHOULD NOT BE REQUIRED TO PERFORM AT ITS BID PRICE. SEE 37 COMP. GEN. 685 (1958).

THE QUESTION THEN ARISES AS TO WHETHER THE CONTRACT PRICE MAY BE INCREASED TO THE REQUESTED $6,870. THIS OFFICE HAS, ON OCCASION, ALLOWED AN INCREASE IN A CONTRACT PRICE, WHERE THE MISTAKE IS ESTABLISHED AND THE CONTRACTING OFFICER CAN BE CHARGED WITH NOTICE OF THE PROBABILITY OF THE MISTAKE, TO THE EXTENT THAT THE INCREASED PRICE DOES NOT EXCEED THE PRICE OF THE NEXT ACCEPTABLE BID. B-167997, OCTOBER 17, 1969; B-165703, JANUARY 8, 1969; B-165097, SEPTEMBER 5, 1968; B-160381, DECEMBER 2, 1966; 37 COMP. GEN. 398 (1957); AND SEE FPR 1-2.406-4(B)(2) AND (3). WHILE THE SITUATION AT HAND DOES NOT ESTABLISH AN INTENDED BID PRICE BY PPG FOR BOTH ENTRANCES, OR PROVIDE A SECOND RESPONSIVE BID FOR DETERMINATION OF THE APPROPRIATE LIMIT OF A PRICE ADJUSTMENT WHICH COULD BE EFFECTED UNDER THE ABOVE RATIONALE, IT SEEMS EVIDENT THAT A CORRECT BID PRICE BY EITHER PPG OR DOR-O-MATIC (THE ONLY OTHER BIDDER SUBMITTING A BID RESPONSIVE TO THE TECHNICAL SPECIFICATIONS) COVERING DOORS FOR BOTH ENTRANCES WOULD HAVE BEEN IN EXCESS OF THE PROPOSED ADJUSTED CONTRACT PRICE OF $6,870.

FOR THESE REASONS, AND SINCE PPG IS WILLING TO PERFORM THE COMPLETE WORK AT THE ADJUSTED PRICE, WE BELIEVE THE GOVERNMENT'S INTEREST WOULD BE BEST SERVED BY PERMITTING THE CORRECTION AS ADMINISTRATIVELY RECOMMENDED. COPY OF THIS DECISION SHOULD BE PLACED IN THE CONTRACT FILE.

THE FILE SUBMITTED WITH THE LETTER OF MAY 24 IS RETURNED.