B-180930, JUN 17, 1974

B-180930: Jun 17, 1974

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PROOF OF INTENDED BID IS NOT CLEAR AND CONVINCING. BECAUSE IT IS NOT CLEAR THAT INTENDED BID WOULD BE LOW BID. 2. SINCE PRICES ON DELETED ITEMS WERE SUBMITTED WITH BID AND CONSTITUTED OFFERING BY BIDDER. 3. CONTRACTING OFFICER WAS ENTITLED TO CORRECT SECOND LOW BID TO INTENDED BID APPARENT FROM PRICES SUBMITTED WITH BID. TO REGIS MILK CO.: INVITATION FOR BIDS DSA 135-74-E-0082 WAS ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER. ITEMS 23-50 WERE DELETED. THE FOLLOWING TWO "ALL OR NONE" BIDS WERE RECEIVED: REGIS MILK COMPANY (REGIS) $921. THE UNIT PRICE SHOWN ON THE BID WAS $0.36 PER QUART WITH AN EXTENDED BID PRICE OF $10. A PROPER EXTENSION OF THE $0.36 BID WOULD HAVE BEEN $12. ATLANTA'S BID ON THE SAME ITEM WAS $1.20 PER GALLON.

B-180930, JUN 17, 1974

1. BIDDER WHO ALLEGED MISTAKE IN BID PRIOR TO AWARD DUE TO BIDDING ON 1/2-GALLON RATHER THAN GALLON UNITS AND REQUESTED THAT 1/2-GALLON PRICE ($0.62) BE DOUBLED TO ARRIVE AT GALLON PRICE ($1.24) SHOULD NOT BE ALLOWED TO CORRECT MISTAKE BECAUSE BIDDER DID NOT ALWAYS DOUBLE PRICE ON SMALLER UNITS TO ARRIVE AT BID PRICE ON LARGER UNITS AND, THEREFORE, PROOF OF INTENDED BID IS NOT CLEAR AND CONVINCING. ALSO, BIDDER MAY NOT WAIVE ERROR AFTER DENIAL OF CORRECTION, BECAUSE IT IS NOT CLEAR THAT INTENDED BID WOULD BE LOW BID. 2. PRICES CONTAINED IN ITEMS DELETED BY IFB AMENDMENT MAY BE CONSIDERED IN DETERMINING INTENDED BID FOR NON-DELETED ITEM ALLEGED TO BE ERRONEOUS, SINCE PRICES ON DELETED ITEMS WERE SUBMITTED WITH BID AND CONSTITUTED OFFERING BY BIDDER. 3. CONTRACTING OFFICER WAS ENTITLED TO CORRECT SECOND LOW BID TO INTENDED BID APPARENT FROM PRICES SUBMITTED WITH BID, NOTWITHSTANDING ALLEGATION OF LOW BIDDER THAT IT NARROWED DIFFERENCE BETWEEN LOW AND SECOND LOW BID AND PRECLUDED LOW BIDDER FROM WITHDRAWING ALLEGATION OF ERROR WHICH IF CORRECTED MIGHT EXCEED CORRECTED SECOND LOW BID, SINCE ASPR PROVIDES THAT CONTRACTING OFFICER SHALL EXAMINE "ALL" BIDS FOR MISTAKES AND PROVIDES PROCEDURES FOR CORRECTION.

TO REGIS MILK CO.:

INVITATION FOR BIDS DSA 135-74-E-0082 WAS ISSUED BY THE DEFENSE PERSONNEL SUPPORT CENTER, NEW ORLEANS, LOUISIANA, FOR 50 LINE ITEMS OF DAIRY AND OTHER PRODUCTS FOR THE MESS, HOSPITAL AND OTHER FACILITIES AT FORT GORDON, GEORGIA. BY AMENDMENT NO. 0002, ITEMS 23-50 WERE DELETED. THE FOLLOWING TWO "ALL OR NONE" BIDS WERE RECEIVED:

REGIS MILK COMPANY (REGIS) $921,062

ATLANTA DAIRIES COOPERATIVE (ATLANTA) 924,830

AFTER A REVIEW OF THE TWO BIDS, THE CONTRACTING OFFICER DETERMINED THAT THE POSSIBILITY OF ERROR EXISTED IN BOTH BIDS AND REQUESTED CLARIFICATION BY BOTH BIDDERS.

THE SUSPECTED ERROR IN THE ATLANTA BID INVOLVED ITEM NO. 22 (36,000 QUARTS OF BUTTERMILK). THE UNIT PRICE SHOWN ON THE BID WAS $0.36 PER QUART WITH AN EXTENDED BID PRICE OF $10,800. A PROPER EXTENSION OF THE $0.36 BID WOULD HAVE BEEN $12,960. UPON REQUEST FOR VERIFICATION, ATLANTA STATED THAT IT HAD MADE AN ERROR IN ITS BID AND IT HAD INTENDED TO BID $0.30 PER QUART WHICH WOULD CORRESPOND TO ITS EXTENDED PRICE OF $10,800. AS FURTHER PROOF OF ITS INTENDED BID PRICE, IT STATED THAT A REVIEW OF ITS ENTIRE BID WOULD SHOW THAT FOR ITEMS 27 AND 42 (ALSO QUARTS OF BUTTERMILK) IT HAD BID $0.30 PER QUART. BASED ON THIS INFORMATION, THE CONTRACTING OFFICER ALLOWED ATLANTA TO CORRECT ITS BID TO $0.30 PER QUART ON ITEM 22 TO COINCIDE WITH THE EXTENDED PRICE OF $10,800. THEREFORE, ATLANTA'S BID REMAINED AT $924,830:

ON ITEM 18 (36,000 GALLONS OF LOWFAT MILK), REGIS BID $0.62 PER GALLON. ATLANTA'S BID ON THE SAME ITEM WAS $1.20 PER GALLON. DUE TO THIS DISPARITY, THE CONTRACTING OFFICER ASKED FOR VERIFICATION OF REGIS' BID ON ITEM 18. REGIS CONFIRMED THAT THE BID WAS IN ERROR AND THAT IT HAD BID ON A HALF GALLON BASIS INSTEAD OF A GALLON AND REQUESTED THAT ITS BID BE DOUBLED TO ARRIVE AT ITS GALLON PRICE ($1.24 PER GALLON). REGIS HAD NO WORKSHEETS WITH WHICH TO SHOW ITS INTENDED BID PRICE. HOWEVER, IN ITS TELEGRAM TO THE CONTRACTING OFFICER EXPLAINING THE ERROR, REGIS STATED:

"IN PRICING THE ITEM WE MISREAD THE ITEM TO BE HALF GALLONS RATHER THAN THE GALLON PACKAGE AND THE PRICE INDICATED IS A HALF GALLON PRICE. ON THE SAME BID, GALLONS OF WHOLE MILK ARE 1.28, HALF GALLONS OF SKIM ARE .5950 (OR 1.19 A GALLON). LOWFAT WOULD NORMALLY BE PRICED AT LESS THAN WHOLE MILK AND MORE THAN SKIM MILK."

BASED ON THIS REASONING, THE PRICE FOR ITEM 18 SHOULD BE BETWEEN $1.19 PER GALLON AND $1.28 PER GALLON, AND THE $1.24 PER GALLON ALLEGED BY REGIS TO BE ITS INTENDED BID FALLS WITHIN THESE PARAMETERS.

HOWEVER, A REVIEW OF REGIS' ENTIRE BID SHOWS THAT IT DID NOT ALWAYS DOUBLE ITS BID PRICE ON PINTS OR HALF GALLONS TO ARRIVE AT ITS BID FOR QUARTS AND GALLONS FOR THE SAME ITEM. ON FOUR PRODUCTS ON WHICH REGIS BID, ITS PRICE WAS LESS THAN TWICE THE PRICE IT HAD BID ON SMALLER UNITS BUT ON ITEMS 34 AND 35 (1/2 GALLONS AND GALLONS OF WHOLE MILK, RESPECTIVELY) REGIS BID $0.6635 FOR ITEM 34 AND $1.3650 FOR ITEM 35. THEREFORE, IT CANNOT BE SAID WITH CERTAINTY THAT REGIS' INTENDED BID WAS $1.24 OR LESS FOR ITEM 18.

ALSO, IF REGIS' BID IS CORRECTED TO $1.24 PER GALLON, ITS TOTAL PRICE IS $943,382 LESS A 2-PERCENT PROMPT PAYMENT DISCOUNT OR $924,514.36, $315.64 LESS THAN THE BID OF ATLANTA. HOWEVER, IF ITS PRICE FOR ITEM 18 IS RAISED TO $1.25 A GALLON, ATLANTA'S BID BECOMES LOW.

SINCE REGIS DID NOT PROVE ITS INTENDED BID PRICE, THE CONTRACTING OFFICER REFUSED TO ALLOW CORRECTION.

REGIS FURTHER REQUESTED THE CONTRACTING OFFICER TO WAIVE THE ERROR IN ITS BID, IF CORRECTION WAS NOT ALLOWED, AND TO AWARD THE CONTRACT AT ITS ORIGINAL BID PRICE. HOWEVER, THE CONTRACTING OFFICER REFUSED TO WAIVE THE MISTAKE BECAUSE REGIS WOULD NOT BE CLEARLY LOW WITH OR WITHOUT THE ERROR. THIS DECISION WAS BASED ON PAST RULINGS BY OUR OFFICE.

REGIS PROTESTED TO OUR OFFICE THE ABOVE ACTION BY THE CONTRACTING OFFICER ON THE BASES THAT ITS BID SHOULD BE CORRECTED AND, IF NOT, THE MISTAKE SHOULD BE WAIVED. ALSO, REGIS QUESTIONS THAT ACT OF ALLOWING CORRECTION OF ATLANTA'S BID WHILE DENYING ITS REQUEST FOR CORRECTION.

OUR OFFICE HAS FREQUENTLY HELD THAT TO PERMIT CORRECTION OF AN ERROR IN BID PRIOR TO AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED AND THE INTENDED BID PRICE. 49 COMP. GEN. 480 (1970). WHILE REGIS HAS MET THE FIRST TWO CRITERIA FOR CORRECTION, IT HAS FAILED TO SHOW ITS INTENDED BID PRICE BY CLEAR AND CONVINCING EVIDENCE. AS STATED ABOVE, THERE IS NO WAY TO PINPOINT THE INTENDED BID PRICE FOR ITEM 18. REGIS HAS ATTEMPTED TO SHOW BY CALCULATIONS PREPARED BY A COMPARISON OF VARIOUS PRICES IN ITS BID THAT THE PRICE FOR LOWFAT MILK WOULD HAVE BEEN $1.24 PER GALLON. THESE CALCULATIONS PRESUPPOSE DOUBLING THE $0.62 RATE THAT WAS ERRONEOUSLY QUOTED FOR GALLON CONTAINERS. HOWEVER, AS INDICATED ABOVE, THERE WAS AT LEAST ONE MILK ITEM IN THE BID ON WHICH THE GALLON PRICE WAS ALMOST $0.04 MORE THAN TWICE THE 1/2-GALLON PRICE. THUS, IT IS NOT CLEAR FROM THE BID THAT THE GALLON PRICE WOULD NOT EXCEED TWICE THE 1/2-GALLON PRICE. THEREFORE, WE AGREE WITH THE ACTION OF THE PROCURING ACTIVITY IN ITS REFUSING TO ALLOW THE REQUESTED CORRECTION.

AS CONCERNS THE REQUEST THAT THE ERROR OF REGIS BE WAIVED IF CORRECTION IS NOT ALLOWED, REGIS CITES THE PRIOR ACTION OF THE SAME AGENCY UNDER A SOLICITATION ISSUED FOR DAIRY PRODUCTS AT CHARLESTON AIR FORCE BASE, IN WHICH REGIS MADE AN ERROR IN ITS BID AND WHILE CORRECTION WAS NOT ALLOWED, THE CONTRACT WAS AWARDED TO REGIS AT ITS ORIGINAL BID PRICE BY WAIVING THE ERROR. HOWEVER, IN THAT PARTICULAR CASE, IT IS REPORTED THAT REGIS WAS THE LOW BIDDER BY $22,527.50, THE AMOUNT OF THE ERROR WAS APPROXIMATELY $1,675, AND BY NO REASONABLE ESTIMATE WAS IT ANTICIPATED THAT THE BID WOULD EXCEED THE BID DIFFERENCE. THEREFORE, IT IS APPARENT THAT REGIS WOULD HAVE BEEN LOW IN ANY EVENT. AS STATED PREVIOUSLY, THIS IS NOT THE SITUATION IN THE INSTANT CASE, BECAUSE IT IS NOT CLEAR THAT REGIS' INTENDED BID WOULD BE THE LOW BID. OUR OFFICE HAS HELD UNDER SIMILAR CIRCUMSTANCES THAT ACCEPTANCE OF THE ERRONEOUS BID UPON THE REQUEST OF THE BIDDER WOULD BE CONTRARY TO THE PRINCIPLES OF COMPETITIVE BIDDING AND DETRIMENTAL TO THE PURPOSES SOUGHT TO BE ACHIEVED BY THE FEDERAL PROCUREMENT STATUTES. 42 COMP. GEN. 723 (1963).

THE BID OF ATLANTA WAS CORRECTED BY THE CONTRACTING OFFICER BASED ON INFORMATION CONTAINED IN ATLANTA'S BID, THE PRICES FOR ITEMS 27 AND 42, AND THE WORKSHEETS SUBMITTED BY ATLANTA. REGIS CONTENDS THAT THE BID PRICES FOR ITEMS 27 AND 42 SHOULD NOT HAVE BEEN CONSIDERED AS THESE ITEMS WERE AMONG THE ITEMS DELETED BY AMENDMENT NO. 0002. ALTHOUGH THE LATTER ITEMS WERE AMONG THOSE DELETED BY AMENDMENT, THE FACT REMAINS THAT THE PRICES ON THOSE ITEMS WERE SUBMITTED WITH THE BID AND CONSTITUTED AN OFFERING BY THE BIDDER. THEREFORE, THE FACT THAT THE ITEMS MAY HAVE BEEN DELETED IS VIEWED AS IRRELEVANT.

REGIS ALSO CONTENDS THAT ATLANTA SHOULD NOT HAVE BEEN ALLOWED TO CORRECT ITS BID SINCE THE CORRECTION NARROWED THE DIFFERENCE BETWEEN THE REGIS AND THE ATLANTA BIDS AND THEREBY "DISPLACED" THE REGIS BID. IN OTHER WORDS, IF THE ATLANTA UNIT PRICE BID HAD NOT BEEN CORRECTED, THE SPREAD BETWEEN THE TWO BIDS WOULD HAVE BEEN SO LARGE THAT THERE WOULD BE NO QUESTION ABOUT THE WAIVER OF THE ERROR ALLEGED BY REGIS.

PARAGRAPH 2-406.1 OF THE ARMED SERVICES PROCUREMENT REGULATION (ASPR) IS SPECIFIC THAT -

"AFTER THE OPENING OF BIDS, CONTRACTING OFFICERS SHALL EXAMINE ALL BIDS FOR MISTAKES. ***"

ASPR 2-406.1 FURTHER PROVIDES THAT WHERE THE CONTRACTING OFFICER SUSPECTS AN ERROR IN BID, THE MATTER SHALL BE BROUGHT TO THE ATTENTION OF THE BIDDER AND PROCESSED IN ACCORDANCE WITH AN ESTABLISHED PROCEDURE. THUS, IT WAS APPROPRIATE FOR THE CONTRACTING OFFICER TO BRING THE SUSPECTED MISTAKE IN THE ATLANTA BID TO THE ATTENTION OF THE BIDDER AND TO TAKE SUCH CORRECTIVE MEASURES AS THE CIRCUMSTANCES DICTATED. SINCE, AS INDICATED ABOVE, THE INTENDED BID WAS APPARENT FROM INFORMATION SUBMITTED WITH THE BID, IT WAS PROPER TO CONSIDER THE BID ON THE CORRECTED BASIS. CORRECTION OF THE BID DID NOT "DISPLACE" THE REGIS BID; IT MERELY LIMITED THE DIFFERENCE BETWEEN THE TWO BIDS.

HOWEVER, EVEN IF THE CORRECTION OF THE ATLANTA BID IS CONSIDERED TO BE A DISPLACEMENT OF THE REGIS BID, IN 37 COMP. GEN. 210 (1957), CITED BY REGIS, IT WAS INDICATED THAT DOWNWARD CORRECTION WHICH WOULD RESULT IN DISPLACEMENT OF ONE OR MORE BIDDERS WOULD BE APPROPRIATE WHERE THE INTENDED BID CAN BE ASCERTAINED SUBSTANTIALLY FROM THE INVITATION AND THE BID ITSELF. SEE, ALSO, 50 COMP. GEN. 497, 498 (1971), AND 52 ID. 624, 626 (1973). ATLANTA'S BIDS ON ITEMS 27 AND 42 COINCIDED WITH ITS EXTENDED BID PRICE FOR ITEM 22 AND, THEREFORE, THE CORRECT BID PRICE COULD BE ASCERTAINED FROM THE BID ITSELF.

BASED ON THE FOREGOING, THE PROTEST OF REGIS IS DENIED.