B-178731, AUG 3, 1973

B-178731, AUG 3, 1973

CONTRACT NO. V537C-835 AWARDED BY THE VA WEST SIDE HOSPITAL, CHICAGO, ILLINOIS TO THE KIPLEY CONSTRUCTION COMPANY MAY NOT BE REFORMED BY REASON OF AN ALLEGED MISTAKE IN BID BY KIPLEY BECAUSE THE CONTRACTING OFFICER HAD NO NOTICE OF THE PROBABILITY OF ERROR.

TO MR. DONALD E. JOHNSON:

REFERENCE IS MADE TO LETTER 537(134A) DATED JUNE 11, 1973, FROM THE HOSPITAL DIRECTOR, VA WEST SIDE HOSPITAL, CHICAGO, ILLINOIS, AND TO LETTER 134C DATED MAY 21, 1973, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE KIPLEY CONSTRUCTION COMPANY (KIPLEY) TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. V537C-835 WAS BASED.

THE INVITATION FOR BIDS CALLED FOR ALL NECESSARY LABOR, MATERIAL, ETC., TO REMOVE EXISTING LIGHTING AND INSTALL NEW FLUORESCENT LIGHTING IN ACCORDANCE WITH THE SPECIFICATIONS. BIDS WERE OPENED ON FEBRUARY 16, 1973, AND OF THE FIVE BIDS RECEIVED, THE LOW BID WAS SUBMITTED BY KIPLEY IN THE AMOUNT OF $8,250. THE OTHER BIDS WERE $9,100, $10,780, $13,288, AND $15,880. THE GOVERNMENT ESTIMATE FOR THE WORK WAS $9,645.

AFTER AWARD OF THE CONTRACT, KIPLEY ALLEGED THAT IT FURNISHED THE WRONG INFORMATION TO ITS ELECTRICAL CONTRACTOR. BY LETTER DATED MARCH 2, 1973, MR. KLUG OF KIPLEY ADVISED THE CONTRACTING OFFICER THAT THE ERROR AMOUNTED TO $2,225.75. HE STATED IN PART AS FOLLOWS:

IN REGARDS TO YOUR CONTRACT #U537C-835 AND YOUR LETTER OF ACCEPTANCE OF OUR BID ON FLUORESCENT LIGHTING FOR THE CONTRACT OFFICER, I MADE AN ERROR IN THE ESTIMATE. I HAD MORE THAN ONE SET OF SPECIFICATIONS ON MY DESK FOR YOUR STATION AND AS A RESULT I GAVE THE WRONG INFORMATION TO MY ELECTRICAL CONTRACTOR. MY ERROR WAS IN THE AMOUNT OF $2,225.75 WHICH WOULD NOT HAVE MADE ME THE LOW BIDDER.

THE ACCEPTANCE OF KIPLEY'S BID RESULTED IN A VALID AND BINDING CONTRACT UNLESS THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID AT, OR PRIOR TO, THE TIME OF THE AWARD. THERE IS NO EVIDENCE OF RECORD TO INDICATE THAT THE GOVERNMENT HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD. THE FACT THAT THE GOVERNMENT'S ESTIMATE WAS $1,395 MORE THAN THE LOW BID AND THE SECOND LOW BID WAS ONLY 14 PERCENT HIGHER THAN THE LOW BID, IS NOT OF SUFFICIENT DIFFERENCE AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE LIKELIHOOD OF AN ERROR. B-177926, APRIL 19, 1973; B-178336, MAY 10, 1973. CONSEQUENTLY, ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL, NOT MUTUAL.

THE ACCEPTANCE OF THE LOW BID CONSUMMATED A BINDING AND VALID CONTRACT IN THE CIRCUMSTANCES WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR CANCELLING THE EXISTING CONTRACT WITHOUT LIABILITY TO KIPLEY.