B-178690, JUL 17, 1973

B-178690, JUL 17, 1973

PERMISSION TO RELIEVE J. H. BAXTER & CO., FROM PERFORMANCE UNDER CONTRACT NO. 50-707, ISSUED BY THE FOREST SERVICE, REGION 4, FOR FURNISHING LAMINATED BEAMS AND TREATED TIMBER AND HARDWARE FOR THE SALMON NATIONAL FOREST. WE BELIEVE THE CONTRACTING OFFICIALS WERE ON ACTUAL NOTICE OF THE POSSIBILITY OF ERROR IN THE BAXTER BID BEFORE THE AWARD AND VERIFICATION OF THE BID ACCEPTANCE PERIOD SHOULD HAVE BEEN REQUESTED.

TO MR. SECRETARY:

WE REFER TO A LETTER DATED JUNE 29, 1973, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, AND PRIOR CORRESPONDENCE, CONCERNING THE REQUEST OF J. H. BAXTER & CO. THAT IT BE RELIEVED FROM PERFORMANCE UNDER CONTRACT NO. 50-707, ISSUED BY THE FOREST SERVICE, REGION 4, FOR FURNISHING LAMINATED BEAMS AND TREATED TIMBER AND HARDWARE FOR THE SALMON NATIONAL FOREST.

IT IS REPORTED THAT, AFTER THE LOW BIDDER WAS PERMITTED TO WITHDRAW ITS BID, THE CONTRACTING OFFICER AWARDED THE CONTRACT TO BAXTER, THE NEXT LOW BIDDER, BY MAILING THE CONTRACT ON MARCH 21, 1973, AT 4:55 P.M. HOWEVER, EARLIER THAT DAY, A PROCUREMENT AGENT ASSISTING THE CONTRACTING OFFICER ADVISED A SECRETARY TO A REPRESENTATIVE OF BAXTER THAT AN AWARD WOULD BE MADE TO THE FIRM. FIFTEEN MINUTES BEFORE AWARD, A REPRESENTATIVE OF BAXTER RETURNED THE CALL. WE QUOTE, IN PERTINENT PART, FROM THE CONTEMPORANEOUS MEMORANDUM OF THAT CONVERSATION PREPARED BY THE PROCUREMENT AGENT AT 4:45 P.M. ON MARCH 21.

MR. SCHMOKEL (OF BAXTER) PHONED ME 3/21/73 AT 4:40 P.M. AND TOLD ME HE DID NOT WANT THE SALMON TIMBER BID AS THE PRICE OF LUMBER HAD GONE UP 20% AND HE WOULD LOSE APPROXIMATELY $1,000.00 ON THE BID.

I TOLD HIM HE WAS THE NEXT LOW BID OVER PERMA-POST AND HIS ACCEPTANCE TIME WAS 60 CALENDAR DAYS AND THAT AWARD WAS BEING MADE TO HIS FIRM AS OF TODAY.

HE SAID HE WOULD CALL BACK AND SEE IF J. H. BAXTER COULD GET OUT OF THE BID. I TOLD HIM I WOULD CHECK WITH THE CONTRACTING OFFICER, BUT AT THIS TIME I KNEW OF NO WAY THE GOVERNMENT RIGHT COULD BE WAIVED.

HE SAID HIS COPY OF THE BID HAD 10 DAYS ACCEPTANCE PERIOD, BUT THE COPY SUBMITTED WAS LEFT BLANK WHICH MADE 60 CALENDAR DAYS BY (STANDARD FORM) 33 INSTRUCTIONS.

IN THIS REGARD, THE CONTRACTING OFFICER HAS SUBMITTED THE FOLLOWING STATEMENT:

THE 4:40 P.M. TELEPHONE CALL ON MARCH 21, 1973, BY MR. SCHMOKEL, J. H. BAXTER & COMPANY REPRESENTATIVE, WAS NOT CONSIDERED AS A NOTICE OF ERROR. HIS PRIMARY CONCERN WAS THAT WE WERE MAKING AWARD AFTER J. H. BAXTER & COMPANY'S 60-CALENDAR-DAY ACCEPTANCE PERIOD HAD EXPIRED. THE ACCEPTANCE PERIOD HAD NOT EXPIRED. IN RETROSPECT, IT APPEARS THAT PERHAPS THE TELEPHONE CONVERSATION SHOULD HAVE PUT THE CONTRACTING OFFICER ON NOTICE THAT AN ERROR MAY HAVE OCCURRED.

BAXTER FURNISHED EVIDENCE TO SUPPORT ITS CLAIM THAT THE ERROR RESULTED FROM A CLERICAL FAILURE TO INSERT A 10-DAY ACCEPTANCE PERIOD. ADDITION, BAXTER HAS FURNISHED EVIDENCE WHICH SHOWS THAT, BECAUSE OF THE CONSTANT RISE OF COSTS IN THE TREATED WOOD INDUSTRY, IT HAS TRADITIONALLY INSERTED BID ACCEPTANCE PERIODS OF FROM 10 TO 14 DAYS IN RESPONSE TO FOREST SERVICE SOLICITATIONS.

IN GENERAL, THE ACCEPTANCE OF A BID RESULTS IN A VALID AND BINDING CONTRACT. BUT, WHERE AN ERROR IN BID IS ALLEGED AFTER AWARD, RELIEF SUCH AS THAT REQUESTED HERE CAN BE ALLOWED WHERE CONTRACTING OFFICIALS HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE BID PRIOR TO THE TIME OF AWARD. SEE 52 COMP. GEN. (B-177531, MAY 18, 1973); 49 ID. 718, 721 (1970); AND 46 ID. 281, 283 (1966). FROM OUR REVIEW OF THE RECORD, WE BELIEVE THAT CONTRACTING OFFICIALS WERE ON ACTUAL NOTICE OF THE POSSIBILITY OF ERROR IN THE BAXTER BID BEFORE THE AWARD AND VERIFICATION OF THE BID ACCEPTANCE PERIOD SHOULD HAVE BEEN REQUESTED.

ACCORDINGLY, BAXTER SHOULD BE RELIEVED FROM PERFORMANCE UNDER THE CONTRACT.