B-182047, SEP 17, 1974

B-182047: Sep 17, 1974

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MAY NOT BE PERMITTED SINCE IT IS NOT CLEAR THAT BIDDER WOULD REMAIN LOW WHETHER OR NOT PROFIT IS ADDED TO BID. 19 COMP. SINCE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR. CAMP LEWIS TENT & AWNING COMPANY: SOLICITATION 10PR-ZRD-4342 WAS ISSUED ON JANUARY 10. CAMP LEWIS TENT & AWNING COMPANY (CAMP LEWIS) WAS FOUND TO BE THE LOWEST OF THE FIVE BIDDERS AT $148 FOR EACH TENT. A CONTRACT (GS-105-36275) WAS AWARDED TO CAMP LEWIS UPON RECEIPT OF WHICH. IT INFORMED THE CONTRACTING OFFICER THAT THE UNIT PRICE OF $148 WAS IN ERROR. THAT ITS INTENDED BID WAS $192 EACH. $148 WAS LISTED AS THE CHARGE FOR MATERIALS. THAT THE EVIDENCE OF A MISTAKE IS CLEAR AND CONVINCING. THAT THE MISTAKE WAS UNILATERIAL ON THE PART OF THE CONTRACTOR AND SO APPARENT AS TO HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF MISTAKE.".

B-182047, SEP 17, 1974

CONTRACTOR ALLEGED MISTAKE IN BID AFTER AWARD AND SUBMITTED WORKSHEETS SHOWING THE DIRECT LABOR CHARGES HAD BEEN MISTAKENLY OMITTED FROM BID, BUT WORKSHEETS DID NOT INDICATE OVERHEAD COSTS OR PROFITS TO ESTABLISH INTENDED BID PRICE. CORRECTION TO REFLECT OMITTED DIRECT COSTS WITHOUT INCREASE FOR PROFIT, AS REQUESTED BY BIDDER, MAY NOT BE PERMITTED SINCE IT IS NOT CLEAR THAT BIDDER WOULD REMAIN LOW WHETHER OR NOT PROFIT IS ADDED TO BID. 19 COMP. GEN. 580 (1970). HOWEVER, SINCE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR, CONTRACT MAY BE CANCELED WITHOUT LIABILITY TO THE CONTRACTOR. FPR 1-2.406-4.

CAMP LEWIS TENT & AWNING COMPANY:

SOLICITATION 10PR-ZRD-4342 WAS ISSUED ON JANUARY 10, 1974, BY THE FEDERAL SUPPLY SERVICE (FSS), GENERAL SERVICES ADMINISTRATION (GSA) IN SEATTLE, WASHINGTON, FOR THE PROCUREMENT OF 28 WALL TENTS. AT BID OPENING, CAMP LEWIS TENT & AWNING COMPANY (CAMP LEWIS) WAS FOUND TO BE THE LOWEST OF THE FIVE BIDDERS AT $148 FOR EACH TENT. THE NEXT LEWEST BIDDER, M.S. GINN & COMPANY, SUBMITTED A BID OF $198 EACH. A CONTRACT (GS-105-36275) WAS AWARDED TO CAMP LEWIS UPON RECEIPT OF WHICH, CAMP LEWIS FOUND AN ERROR IN ITS TOTAL BID FUGURE. IT INFORMED THE CONTRACTING OFFICER THAT THE UNIT PRICE OF $148 WAS IN ERROR, THAT ITS INTENDED BID WAS $192 EACH, AND IT REQUESTED THAT EITHER IT BE ALLOWED TO WITHDRAW ITS BID OR THAT ITS CONTRACT BE CORRECTED TO RELECT A UNIT PRICE OF $192.

THE ORIGINAL WORKSHEET OF THE CONTRACTOR LISTED MATERIALS AND PROCEDURES ONLY, EXCLUDING LABOR, AND $148 WAS LISTED AS THE CHARGE FOR MATERIALS. THE FINAL WORKSHEET SHOWS A TOTAL OF $148 FOR MATERIALS AND SHIPPING AND $44 FOR A LABOR CHARGE. A THIRD SHEET REVEALS THE COMPUTATIONS USED TO ARRIVE AT THE $44 LABOR CHARGE. THE CONTRACTOR ALLEGES THAT WHEN IT PREPARED ITS BID IT USED THE GIGURE ON SHEET NO. 1 OF $148 RATHER THAN THE FIGURES ON SHEET NO. 2 OF $148 AND $44 FOR A TOTAL OF $192.

THE CONTRACTING OFFICER ISSUED A FINDINGS AND DETERMINATION RELATIVE TO MISTAKE IN OFFER AFTER AWARD, PURSUANT TO FEDERAL PROCUREMENT REGULATIONS (FPR) 1-2.406, IN WHICH HE DETERMINED THAT:

"WITHIN THE PREVIEW OF GSPR 5-2.406-4, THE BIDDER, AFTER AWARD HAS ALLEGED A MISTAKE IN BID, THAT THE EVIDENCE OF A MISTAKE IS CLEAR AND CONVINCING, THAT THE MISTAKE WAS UNILATERIAL ON THE PART OF THE CONTRACTOR AND SO APPARENT AS TO HAVE CHARGED THE CONTRACTING OFFICER WITH NOTICE OF THE PROBABILITY OF MISTAKE."

HE FURTHER RECOMMENDED THAT THE CONTRACTOR BE PERMITTED TO CORRECT ITS BID.

THE REGIONAL COUNSEL CONCURRED IN THE CONTACTING OFFICER'S RECOMMENDATION. THE GENERAL COUNSEL, HOWEVER, WHILE AGREEING THAT THE CONTRACTOR HAD ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THE OCCURRENCE OF THE MISTAKE, DISAGREED TAHT THE CONTRACTOR HAD PROVIDED CLEAR AND CONVINCING EVIDENCE OF ITS INTENDED BID PRICE AND THEREFORE RECOMMENDED RESCISSION OF THE CONTRACT ACCORDINGLY, THE RECOMMENDATION WAS FORWARDED TO OUR OFFICE FOR CONSIDERATION. FPR 1-2.406-4(I).

IN REGARD TO CORRECTION OF AN ALLEGED ERROR IN BID WE HAVE STATED THAT TO PERMIT CORRECTION OF AN ALLEGED ERROR PRIOR TO OR AFTER AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE RROR OCCURRED, AND THE INTENDED BID PRICE. 35 COMP. GEN. 279 (1955); 31 ID. 183 (1951; 23 ID. 596 (1944); 17 ID. 598 (1938).

THE RECORD SHOWS CLEARLY THAT A MISTAKE IN BID WAS MADE BY CAMP LEWIS, BUT THE EVIDENCE IS INSUFFICIENT AND IN FACT NONEXISTENT TO SHOW WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR THE ERROR. THE WORKSHEETS INDICATE DIRECT COSTS OF MAUFACTURE BUT NO INDIRECT (OVERHEAD) COSTS OR PROFIT ARE SHOWN AS TO INDICATE THE BID PRICE PERITEM OR TOTAL BID PRICE. THE ADDITION TO CAMP LEWIS' BID OF THE OMITTED DIRECT LABOR COST MAKES THAT FIRM'S UNIT PRICE ONLY $6 LESS THAN THE NEXT LOW BID. ALTHOUGH CAMP LEWIS HAD INDICATED ITS WILLINGNESS TO ACCEPT CORRECTION OF ITS CONTRACT PRICE TO ADD ONLY THE OMITTED DIRECT LABOR COST, WE DO NOT BELIEVE THIS CORRECTION IS PERMISSIBLE BECAUSE OF THE POSSIBLE PREJUDICE TO OTHER BIDDERS. AS WE STATED IN OUR DECISION WHICH IS REPORTED AT 49 COMP. GEN. 480, 483 (1970):

""WE HAVE SPECIFICALLY HELD THAT CORRECTION MAY BE PERMITTED TO REFLECT THE OMISSION OF DIRECT COSTS WITHOUT ANY INCREASE FOR PROFIT WHERE THE BIDDER REQUESTS CORRECTION IN SUCH FORM AND THE BID WOULD REMAIN LOW WHETHER OR NOT THE LOW BID IS AMENDED TO REFLECT THE PROFIT. B-149798, SEPTEMBER 7, 1962."

SINCE IT IS NOT CLEAR FROM THE RECORD WHETHER CAMP LEWIS' BID WOULD REMAIN LOW IF ITS OVERHEAD COST AND PROFIT WERE ALSO REFLECTED IN ITS BID, AMENDMENT OF CAMP LEWIS' BID IS PRECLUDED.

HOWEVER, SINCE THE RECORD REASONABLY ESTABLISHED THAT AN ERROR WAS MADE BY CAMP LEWIS TENT & AWNING COMPANY IN ITS ORIGINAL BID, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY AS RECOMMENDED BY THE GENERAL COUNSEL, GENERAL SERVICES ADMINISTRATION.