B-180869, MAY 21, 1974

B-180869: May 21, 1974

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CORRECTION OF MISTAKE ALLEGED AFTER AWARD OF SURPLUS SALES CONTRACT IS PERMITTED WHERE RECORD INDICATES THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF MISTAKE PRIOR TO AWARD. THE SUBJECT CONTRACT WAS AWARDED TO BARSTOW ON NOVEMBER 15. ITEM 155 WAS DESCRIBED AS: "MIXED METAL. 500 POUND" THE CONTRACTING OFFICER HAS STATED THAT THE CURRENT MARKET APPRAISAL FOR THIS ITEM WAS ESTABLISHED AT $.06 PER POUND. TWO SEPARATE BIDS WERE RECEIVED FROM BARSTOW ON ITEM 155. THE THIRD HIGH BID WAS SUBMITTED BY ANOTHER FIRM IN THE AMOUNT OF $0.03461. ITEM 155 WAS AWARDED TO BARSTOW AT A UNIT PRICE OF $0.9111. SINCE THAT BID SHOULD HAVE BEEN $0.09111. THAT HE SHOULD HAVE BEEN ON NOTICE OF A MISTAKE IN BARSTOW'S HIGH BID DUE TO THE DISPARITY BETWEEN IT AND BARSTOW'S OTHER BID.

B-180869, MAY 21, 1974

CORRECTION OF MISTAKE ALLEGED AFTER AWARD OF SURPLUS SALES CONTRACT IS PERMITTED WHERE RECORD INDICATES THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF MISTAKE PRIOR TO AWARD, AND THE CORRECTED PRICE DOES NOT DISPLACE THE NEXT ACCEPTABLE BID.

TO BARSTOW TRUCK PARTS AND EQUIPMENT COMPANY, INC.:

THE ASSISTANT COUNSEL HAS FORWARDED THE REQUEST OF BARSTOW TRUCK PARTS AND EQUIPMENT COMPANY, INC. (BARSTOW) FOR REFORMATION OF THE PRICE OF CONTRACT NO. 31-4075-099 ON THE BASIS OF AN ALLEGATION, AFTER AWARD, OF AN ERROR IN THE BID WITH REGARD TO ITEM 155.

THE SUBJECT CONTRACT WAS AWARDED TO BARSTOW ON NOVEMBER 15, 1973, FOR ITEMS 154 AND 155 OF INVITATION FOR BIDS 31-4075, ISSUED BY THE DEFENSE SUPPLY AGENCY, DEFENSE PROPERTY DISPOSAL REGION, MEMPHIS, TENNESSEE. THE SUBJECT INVITATION REQUESTED BIDS ON VARIOUS ITEMS OF METAL SCRAP.

ITEM 155 WAS DESCRIBED AS:

"MIXED METAL, SCRAP: STEEL, BRASS AND ALUMINUM. ESTIMATED 76% STEEL WITH A ROCKWELL HARDNESS OF -30 MINIMUM AND -40 MAXIMUM, 18% BRASS AND 6% ALUMINUM. INCLUDING DEMILITARIZED BOOSTERS AND FUZES PROCESSED THROUGH A DEACTIVATION FURNACE.

OUTSIDE 107,500 POUND"

THE CONTRACTING OFFICER HAS STATED THAT THE CURRENT MARKET APPRAISAL FOR THIS ITEM WAS ESTABLISHED AT $.06 PER POUND.

ON NOVEMBER 7, 1973, TWO SEPARATE BIDS WERE RECEIVED FROM BARSTOW ON ITEM 155, IN UNIT PRICES OF $0.9111 AND $0.09166. THE THIRD HIGH BID WAS SUBMITTED BY ANOTHER FIRM IN THE AMOUNT OF $0.03461. ACCORDINGLY, ITEM 155 WAS AWARDED TO BARSTOW AT A UNIT PRICE OF $0.9111.

BY LETTER OF NOVEMBER 19, 1973, BARSTOW'S PRESIDENT ADVISED THE CONTRACTING OFFICER THAT AN OBVIOUS ERROR HAD BEEN COMMITTED WITH REGARD TO THE BID WHEN BARSTOW'S AGENT AT THE BID OPENING ERRED IN WRITING THE BID AMOUNT, SINCE THAT BID SHOULD HAVE BEEN $0.09111. BY TELEPHONE CONVERSATION OF THE SAME DATE, HE ADVISED THE CONTRACTING OFFICER THAT HE WOULD ACCEPT THE PROPERTY AT THE $0.09166 PRICE SET FORTH IN HIS OTHER BID.

THE RECORD INDICATES THAT THE CONTRACTING OFFICER HAS ACKNOWLEDGED, AFTER AWARD, THAT HE SHOULD HAVE BEEN ON NOTICE OF A MISTAKE IN BARSTOW'S HIGH BID DUE TO THE DISPARITY BETWEEN IT AND BARSTOW'S OTHER BID, THE GOVERNMENT ESTIMATE, AND THE THIRD HIGH BID.

AS A GENERAL RULE, IF A BIDDER MAKES A UNILATERAL MISTAKE, IT IS BOUND BY THE CONTRACT AWARDED UNLESS THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, OF THE MISTAKE AT THE TIME OF AWARD. IF THE MISTAKE IS ESTABLISHED AND THE CONTRACTING OFFICER CAN BE CHARGED WITH ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE, THIS OFFICE WILL ALLOW CORRECTION OF THE CONTRACT PRICE, PROVIDED THE CORRECTED PRICE DOES NOT DISPLACE THE NEXT ACCEPTABLE BID. 37 COMP. GEN. 398 (1957); B-176912, FEBRUARY 7, 1973.

IN VIEW OF THE FACT THAT BARSTOW'S HIGH BID WAS ABOUT 10 TIMES ITS OTHER BID FOR THE SAME ITEM, 15 TIMES THE GOVERNMENT'S CURRENT MARKET APPRAISAL, AND 30 TIMES THE PRICE OF THE THIRD HIGH BID, WE CONCUR THAT THE RECORD ADEQUATELY ESTABLISHES THE EXISTENCE OF A MISTAKE IN BARSTOW'S BID PRICE OF WHICH THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE PRIOR TO AWARD.

ACCORDINGLY GAO WILL NOT OBJECT TO REFORMATION OF THE CONTRACT PRICE TO THE EXTENT OF THE NEXT HIGH BID WHICH WAS ALSO SUBMITTED BY BARSTOW.