B-178048, APR 3, 1973

B-178048, APR 3, 1973

CONTRACT - RESCISSION - CONSTRUCTIVE NOTICE OF ERROR DECISION ALLOWING THE REQUEST OF AIR PRODUCTS AND CHEMICALS, INC., FOR RESCISSION OF A CONTRACT AWARDED BY THE GENERAL SERVICES ADMINISTRATION WHERE A MISTAKE IN BID WAS ALLEGED AFTER AWARD. GAO AGREES THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF AN ERROR IN THE LOW BID AND HE SHOULD HAVE REQUESTED VERIFICATION OF THE BID BEFORE AWARD. ACCORDINGLY, THE CONTRACT MAY BE RESCINDED. AS TO THE DELIVERIES ALREADY MADE UNDER THE CONTRACT, AIR PRODUCTS MAY BE PAID ON A QUANTUM VALEBANT BASIS NOT TO EXCEED THE PRICE OF THE NEXT LOW BID.

TO ARTHUR F. SAMPSON:

REFERENCE IS MADE TO THE LETTER OF FEBRUARY 16, 1973, FROM THE GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION, CONCERNING THE REQUEST OF AIR PRODUCTS AND CHEMICALS, INC. (AIR PRODUCTS), FOR RECISSION OF CONTRACT NO. GS-04S-19864 DUE TO AN ALLEGED MISTAKE IN BID AFTER AWARD OF THE CONTRACT.

THE SUBJECT SOLICITATION (AT/FS-18094) COVERED INDEFINITE REQUIREMENTS FOR COMPRESSED AND LIQUIFIED GASES DURING THE PERIOD DECEMBER 1, 1972, TO NOVEMBER 30, 1973, FOR GSA REGION 4. ON ITEM A0038 WHICH CALLED FOR FURNISHING AN ESTIMATED QUANTITY OF 463,800 CUBIC FEET OF LIQUID OXYGEN TO MEMPHIS, TENNESSEE, FOR USE AT THE NAVAL HOSPITAL, MILLINGTON, VIRGINIA, AIR PRODUCTS WAS THE APPARENT LOW BIDDER WITH A PRICE OF $.00105 PER CUBIC FOOT. ON NOVEMBER 17, 1972, A CONTRACT WAS AWARDED TO AIR PRODUCTS. DECEMBER 12, 1972, A REPRESENTATIVE OF AIR PRODUCTS TELEPHONED THE CONTRACTING OFFICER AND ADVISED THAT BY MISPLACEMENT OF A DECIMAL THE BID PRICE WAS ENTERED AS $.00105 INSTEAD OF $.0105. AIR PRODUCTS SUBSEQUENTLY SUBMITTED THE WORKSHEETS USED IN THE PREPARATION OF THE BID WHICH SHOW THAT THE BID PRICE WAS COMPUTED AT $1.05 PER HUNDRED CUBIC FEET. THE ERROR IN THE BID OCCURRED WHEN THE HUNDRED CUBIC FOOT PRICE WAS CONVERTED TO A CUBIC FOOT PRICE.

THE ONLY OTHER BIDDER ON ITEM A0038 WAS THE UNION CARBIDE CORPORATION WHICH BID $.00589 PER CUBIC FOOT. THE PRIOR YEAR CONTRACT PRICE FOR THIS ITEM WAS $.00494 PER CUBIC FOOT. IN VIEW OF THE GREAT VARIANCE BETWEEN THE LOW BID AND BOTH THE OTHER BID AND THE PRIOR CONTRACT PRICE, WE AGREE WITH THE CONTRACTING OFFICER AND THE GENERAL COUNSEL THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF AN ERROR IN THE LOW BID AND HE SHOULD HAVE REQUESTED VERIFICATION OF THE BID BEFORE AWARD. ACCORDINGLY, THE CONTRACT MAY BE RESCINDED AS RECOMMENDED.

WITH RESPECT TO THE DELIVERIES MADE UNDER THE CONTRACT TOTALING 72,459 CUBIC FEET OF OXYGEN, WE CONCUR WITH THE RECOMMENDATION THAT AIR PRODUCTS BE PAID ON A QUANTUM VALEBANT BASIS NOT TO EXCEED $.00589 PER CUBIC FOOT, THE NEXT LOW BID PRICE. 37 COMP. GEN. 685 (1958).