B-182750, MAR 27, 1975
Highlights
WAS APPROXIMATELY 21 PERCENT BELOW ALLEGEDLY ERRONEOUS LOW BID. CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID WHICH WOULD REQUIRE VERIFICATION OF BID PRIOR TO AWARD. BIDS WERE SOLICITED FOR 1. 000 THREE-PART SNAP SETS FOR THE INTERNAL REVENUE SERVICE AND FOUR BIDS WERE RECEIVED ON OCTOBER 29. 680.00 NO GOVERNMENT ESTIMATE WAS MADE. THE CONTRACTING OFFICER SHOULD NOT BE CHARGED WITH CONSTRUCTIVE KNOWLEDGE OF A POTENTIAL ERROR IN THE PARAMOUNT PRESS BID WHICH WOULD HAVE REQUIRED HIM TO SEEK VERIFICATION PRIOR TO AWARD. THE GENERAL RULE REGARDING ALLOWANCE OF AN UPWARD PRICE ADJUSTMENT ARISING FROM A UNILATERAL ERROR IN BID ALLEGED AFTER AWARD IS THAT ACCEPTANCE OF THE BID RESULTS IN A VALID AND BINDING CONTRACT UNLESS THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR PRIOR TO THE TIME OF AWARD. 45 COMP.
B-182750, MAR 27, 1975
NOTWITHSTANDING WIDE RANGE OF BID PRICES SUBMITTED, SINCE PRICE OF SAME ITEM PROCURED YEAR BEFORE, USED IN LIEU OF GOVERNMENT ESTIMATE, WAS APPROXIMATELY 21 PERCENT BELOW ALLEGEDLY ERRONEOUS LOW BID, CONTRACTING OFFICER WAS NOT ON ACTUAL OR CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID WHICH WOULD REQUIRE VERIFICATION OF BID PRIOR TO AWARD. ACCORDINGLY, A VALID AND BINDING CONTRACT EXISTS AND CONTRACT PRICE MAY NOT BE INCREASED.
PARAMOUNT PRESS, INC.:
PARAMOUNT PRESS, INC., HAS REQUESTED MODIFICATION OF CONTRACT GPO NO. 548 -086 AWARDED TO IT BY THE GOVERNMENT PRINTING OFFICE (GPO), ON NOVEMBER 4, 1974, AFTER FORMAL ADVERTISING.
BIDS WERE SOLICITED FOR 1,000,000 THREE-PART SNAP SETS FOR THE INTERNAL REVENUE SERVICE AND FOUR BIDS WERE RECEIVED ON OCTOBER 29, 1974, AS FOLLOWS:
PARAMOUNT PRESS $15,270.00 ($15.27/M)
MCGREGOR PRINTING CORP. 19,210.00
THE SNAPOUT FORMS CO. 27,000.00
DIGIMATICS, INC. 27,680.00
NO GOVERNMENT ESTIMATE WAS MADE. INSTEAD, GPO UTILIZED A PRICE OF $12.64/M, THE PRICE AT WHICH GPO HAD LAST PROCURED THE ITEM IN OCTOBER 1973.
BY LETTER DATED NOVEMBER 25, 1974, PARAMOUNT PRESS EXPLAINED THAT IT HAD OMITTED FROM ITS BID PRICE A CHARGE OF $3.90/M FOR COLLATION, AND REQUESTED THAT ITS BID PRICE BE CORRECTED TO $19,150. IN SUPPORT OF ITS ALLEGATION OF ERROR, PARAMOUNT PRESS SUBMITTED THE WORKSHEET USED IN COMPUTING ITS BID PRICE.
IN HIS LETTER OF JANUARY 2, 1975, THE ASSOCIATE GENERAL COUNSEL FOR GPO STATES THAT IN VIEW OF THE 21 PERCENT INCREASE IN ONE YEAR OVER THE COST OF THE PREVIOUS CONTRACT, THE CONTRACTING OFFICER SHOULD NOT BE CHARGED WITH CONSTRUCTIVE KNOWLEDGE OF A POTENTIAL ERROR IN THE PARAMOUNT PRESS BID WHICH WOULD HAVE REQUIRED HIM TO SEEK VERIFICATION PRIOR TO AWARD.
THE GENERAL RULE REGARDING ALLOWANCE OF AN UPWARD PRICE ADJUSTMENT ARISING FROM A UNILATERAL ERROR IN BID ALLEGED AFTER AWARD IS THAT ACCEPTANCE OF THE BID RESULTS IN A VALID AND BINDING CONTRACT UNLESS THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR PRIOR TO THE TIME OF AWARD. 45 COMP. GEN. 700 (1966); B-177687, FEBRUARY 21, 1973. REGARDING THE CONTRACT IN QUESTION, THERE HAS BEEN NO SHOWING THAT THE CONTRACTING OFFICER WAS ON ACTUAL NOTICE OF AN ERROR IN THE BID. MOREOVER, NOTWITHSTANDING THE WIDE RANGE IN BID PRICES, SINCE THE PRICE OF THE SAME ITEM PROCURED A YEAR BEFORE, USED IN LIEU OF A GOVERNMENT ESTIMATE, WAS APPROXIMATELY 21 PERCENT BELOW THE PARAMOUNT PRESS BID, WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE LIKELIHOOD OF ERROR, WHICH WOULD HAVE REQUIRED A VERIFICATION OF PARAMOUNT PRESS'S BID. SEE MATTER OF MCGILL GRAPHIC ARTS, B-182624, DECEMBER 23, 1974. THE ACCEPTANCE OF THE BID, THEREFORE, CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. EDWIN DOUGHERTY AND M.H. OGDEN V. UNITED STATES, 102 CT. CL. 249, 259 (1944); SALIGMAN ET AL. V. UNITED STATES, 56 F. SUPP. 505, 507 (1944); 47 COMP. GEN. 365, 368 (1968).
ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE CONTRACT PRICE.