B-182467, DEC 16, 1974

B-182467: Dec 16, 1974

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

CONTRACTOR'S REQUEST FOR AN INCREASE IN CONTRACT PRICE ON GROUNDS THAT ITS BID PRICE WAS BASED ON TYPOGRAPHICAL ERROR MAY BE GRANTED. SINCE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR WHERE LOW BID ON CLOSELY PRICED ITEM WAS 23 PERCENT LOWER THAN BOTH NEXT LOW BID AND GOVERNMENT ESTIMATES AND THERE WAS ONLY SMALL PRICES VARIANCE BETWEEN THE TWO OTHER BIDS RECEIVED. INC.: THIS DECISION IS A RESPONSE TO A REQUEST FROM THE DEPUTY ASSISTANT SECRETARY FOR GRANTS AND PROCUREMENT MANAGEMENT. FOUR BIDS WERE RECEIVED. HES WAS AWARDED THE CONTRACT ON ITEMS 4 -6. THE BID PRICE INTENDED WAS $12. 831 BUT WAS TYPED AS $10. A COPY OF THE INVITATION FOR BIDS AND A COPY OF THE SALESMAN'S WORKSHEETS WERE ENCLOSED IN SUPPORT OF THE ALLEGATION OF ERROR.

B-182467, DEC 16, 1974

CONTRACTOR'S REQUEST FOR AN INCREASE IN CONTRACT PRICE ON GROUNDS THAT ITS BID PRICE WAS BASED ON TYPOGRAPHICAL ERROR MAY BE GRANTED, SINCE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR WHERE LOW BID ON CLOSELY PRICED ITEM WAS 23 PERCENT LOWER THAN BOTH NEXT LOW BID AND GOVERNMENT ESTIMATES AND THERE WAS ONLY SMALL PRICES VARIANCE BETWEEN THE TWO OTHER BIDS RECEIVED.

HANDLING EQUIPMENT SALES COMPANY, INC.:

THIS DECISION IS A RESPONSE TO A REQUEST FROM THE DEPUTY ASSISTANT SECRETARY FOR GRANTS AND PROCUREMENT MANAGEMENT, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, FOR A DETERMINATION CONCERNING THE PROPRIETY OF PERMITTING CORRECTION AFTER AWARD OF A MISTAKE CLAIMED BY HANDLING EQUIPMENT SALES COMPANY, INC. (HES), MADE IN ITS BID FOR CONTRACT NO. HIH- 74-C-1084 ISSUED BY THE NATIONAL INSTITUTE OF HEALTH.

INVITATION NO. HIH-74B-(86)-367, ISSUED ON MAY 20, 1974, SOLICITED BIDS ON NINE ITEMS TO BE AWARDED IN THE AGGREGATE. FOUR BIDS WERE RECEIVED. OF THE THREE RESPONSIVE BIDS REDEIVED ON ITEM 4-6, HES SUBMITTED THE LOW BID OF $10,831. ON JUNE 24, 1974, HES WAS AWARDED THE CONTRACT ON ITEMS 4 -6, CONSISTING OF A FORK LIFT TRUCK AND INSTRUCTIONS AND PARTS MANUALS.

BY LETTER DATED JULY 15, 1974, HES ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN TRANSCRIBING DATA FROM THE WORKSHEET TO THE BID. THE BID PRICE INTENDED WAS $12,831 BUT WAS TYPED AS $10,831. A COPY OF THE INVITATION FOR BIDS AND A COPY OF THE SALESMAN'S WORKSHEETS WERE ENCLOSED IN SUPPORT OF THE ALLEGATION OF ERROR. ALTHOUGH THERE IS SOME UNCERTAINTY AS TO WHETHER PRINTED PRICE LISTS HAD BEEN FURNISHED TO THE CONTRACTING OFFICER AS REQUESTED, SUCH LISTS WERE SUBMITTED TO THIS OFFICE ON NOVEMBER 12, 1974, BY HES IN SUPPORT OF ITS POSITION.

IT IS THE GENERAL RULE THAT A CONTRACTOR'S CLAIM FOR RELIEF WILL NOT BE GRANTED IN THE CASE OF A UNILATERAL MISTAKE AFTER A BID OR OFFER HAS BEEN ACCEPTED BY THE GOVERNMENT UNLESS THE CIRCUMSTANCES ARE SUCH THAT THE GOVERNMENT WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF MISTAKE PRIOR TO AWARD. 45 COMP. GEN. 305 (1965); B-179765, NOVEMBER 15, 1973; CHERNICK V. UNITED STATES, 178 CT. CL. 498 (1967); 48 COMP. GEN. 672 (1969).

IN HER REPORT, IN WHICH SHE RECOMMENDED THAT THE CONTRACT BE ENFORCED AS AWARDED, THE CONTRACTING OFFICER STATES THAT THE DISPARITY (23 PERCENT) BETWEEN THE BID PRICE QUOTED BY HES AND THAT OF THE NEXT LOW BIDDER WAS NOT SUFFICIENT TO PUT HER ON CONSTRUCTIVE NOTICE OF ERROR. THE DEPUTY ASSISTANT SECRETARY FOR GRANTS AND PROCUREMENT MANAGEMENT CONCURS IN THIS POSITION BUT STATES THAT THERE IS CLEAR AND CONVINCING EVIDENCE WHICH ESTABLISHES BOTH THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED.

AFTER REVIEWING THE RECORD, AND IN VIEW OF THE HIGHLY COMPETITIVE NATURE OF THE ITEM BEING PROCURED, WE ARE OF THE VIEW THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE ERROR IN THE HES BID. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS ON ITEMS 4-6 WERE $13,359 AND $13,823, RESPECTIVELY; THE GOVERNMENT ESTIMATE WAS $13,285. SINCE HES'S BID OF $10,831 WAS 23 PERCENT LOWER THAN BOTH THE NEXT LOW BID AND THE GOVERNMENT ESTIMATE, AND THE PRICE DISPARITY BETWEEN THE OTHER BIDS RECEIVED WAS ONLY $464, IT IS OUR OPINION THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR, AND THE BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD. SEE B-176160, JUNE 30, 1972; B-178711, JUNE 14, 1973; MATTER OF EDERER, INCORPORATED, B-180993, MAY 29, 1974. SEE ALSO, MATTER OF NATIONAL CHINA & EQUIPMENT CORPORATION, B-180386, FEBRUARY 4, 1974.

ACCORDINGLY, THE CONTRACT MAY BE MODIFIED TO INCREASE THE PRICE TO THE AMOUNT OF THE INTENDED BID OF $12,831.