B-182681, DEC 13, 1974

B-182681: Dec 13, 1974

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CONTRACTOR'S CLAIM FOR AN INCREASE IN CONTRACT PRICE TO INCLUDE TRANSPORTATION AND ESCALATION CHARGES IS DENIED. SINCE PRIOR TO AWARD CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR. CONTRACTOR'S BID WAS ONLY ONE RECEIVED AND BID PRICE WAS CONSISTENT WITH INFORMAL ORAL QUOTATION RECEIVED FROM BIDDER PRIOR TO ISSUANCE OF IFB AND PREVIOUS CONTRACT AWARDED TO BIDDER FOR SAME ITEM. HARRISBURG STEEL COMPANY: HARRISBURG STEEL COMPANY (HARRISBURG) HAS REQUESTED AN INCREASE IN ITS CONTRACT PRICE IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF BUREAU OF MINES. THE BID SUBMITTED BY HARRISBURG WAS THE ONLY ONE RECEIVED AND AWARD WAS MADE TO THAT FIRM FOR 200 CYLINDERS AT A UNIT PRICE OF $63.65 EACH.

B-182681, DEC 13, 1974

CONTRACTOR'S CLAIM FOR AN INCREASE IN CONTRACT PRICE TO INCLUDE TRANSPORTATION AND ESCALATION CHARGES IS DENIED, SINCE PRIOR TO AWARD CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR. CONTRACTOR'S BID WAS ONLY ONE RECEIVED AND BID PRICE WAS CONSISTENT WITH INFORMAL ORAL QUOTATION RECEIVED FROM BIDDER PRIOR TO ISSUANCE OF IFB AND PREVIOUS CONTRACT AWARDED TO BIDDER FOR SAME ITEM.

HARRISBURG STEEL COMPANY:

HARRISBURG STEEL COMPANY (HARRISBURG) HAS REQUESTED AN INCREASE IN ITS CONTRACT PRICE IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF BUREAU OF MINES, UNITED STATES DEPARTMENT OF THE INTERIOR CONTRACT NO. S0346180.

INVITATION FOR BIDS (IFB) PGH 189 SOLICITED BIDS FOR A QUANTITY OF GAS CYLINDERS. THE BID SUBMITTED BY HARRISBURG WAS THE ONLY ONE RECEIVED AND AWARD WAS MADE TO THAT FIRM FOR 200 CYLINDERS AT A UNIT PRICE OF $63.65 EACH, OR A TITAL PRICE OF $12,730.

PRIOR TO DELIVERY OF THE CYLINDERS, HARRISBURG NOTIFIED THE CONTRACTING OFFICER THAT ITS BID SHOULD HAVE INCLUDED FREIGHT CHARGES AND AN ESCALATION CHARGE OF 10 PERCENT. IN SUPPORT OF THE ALLEGATION, HARRISBURG SUBMITTED ITS PRICE LIST AND ORIGINAL WORKSHEETS. THE HARRISBURG CLAIM FOR CORRECTION WAS SUBMITTED TO OUR OFFICE BY THE DEPARTMENT OF THE INTERIOR FOR DETERMINATION.

WHERE A BIDDER OR OFFEROR HAS MADE A MISTAKE IN ITS BID OR OFFER THAT WAS NOT INDUCED OR SHARED BY THE GOVERNMENT, THE BIDDER OR OFFEROR MUST BEAR THE CONSEQUENCES OF ITS MISTAKE, UNLESS THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. SALIGMAN V. UNITED STATES, 56 F. SUPP. 505 (E.D. PA. 1944); CHERNICK V. UNITED STATES, 372 F.2D 492 (CT. CL. 1967); 48 COMP. GEN. 672 (1969). IN ADDITION, WE HAVE FOUND THAT WHERE ONLY ONE BID OR OFFER IS RECEIVED, THERE IS NO BASIS FOR COMPARISON TO OTHER BIDS SO THAT THERE IS NORMALLY NOTHING TO PLACE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF A MISTAKE. 26 COMP. GEN. 415 (1946); B-175760, JUNE 19, 1972; B-180607, APRIL 2, 1974.

THE TEST IS ONE OF REASONABLENESS, WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE THERE WERE ANY FACTORS WHICH REASONABLY COULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF THE CONTRACTING OFFICER. WENDER PRESSES, INC. V. UNITED STATES, 343 F. 2D 961, (CT. CL. 1965); B-176772, MAY 23, 1973.

IN THE INSTANT CASE, APPROXIMATELY ONE MONTH PRIOR TO THE ISSUANCE OF THE IFB, THE CONTRACTING OFFICER OBTAINED AN INFORMAL ORAL QUOTATION FROM HARRISBURG OF $60 PER CYLINDER F.O.B. DESTINATION, BASED UPON A QUANTITY OF 200 CYLINDERS. SINCE THE BID SUBMITTED BY HARRISBURG WAS CONSISTENT WITH THE INFORMAL PRICE QUOTATION, THERE WAS NO BASIS FOR SUSPECTING THAT AN ERROR HAD BEEN MADE. IN ADDITION, THE CONTRACTING OFFICER CONSIDERED A PREVIOUS CONTRACT AWARDED TO HARRISBURG IN JUNE 1973 FOR 100 GAS CYLINDERS AT $51.20 PER CYLINDER F.O.B. DESTINATION. THE COMPARISON DID NOT PUT THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY THAT AN ERROR HAD BEEN MADE IN THE BID.

AT THE TIME OF ACCEPTANCE OF THE HARRISBURG BID, THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR AND, IN VIEW OF THE CIRCUMSTANCES DISCUSSED ABOVE, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE LIKELIHOOD OF ERROR IN THE HARRISBURG BID. THE ACCEPTANCE OF THE BID IN THESE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313 (1919), AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75 (1922).

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE CONTRACT PRICE.