B-182893, JAN 17, 1975

B-182893: Jan 17, 1975

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REFORMATION OF ITEM PRICE OF SALES CONTRACT MAY BE PERMITTED (PRICE WOULD STILL BE HIGH) NOTWITHSTANDING FACT THAT CONTRACTING OFFICER HAD ALREADY PERMITTED CORRECTION OF ITEM PRICE AFTER REQUEST FOR VERIFICATION SINCE CONTRACTING OFFICER HAD NOT ADVISED OF REASONS FOR MAKING REQUEST AND SINCE ITEM PRICE AS ORIGINALLY CORRECTED WAS STILL 5.8 TIMES HIGHER THAN GOVERNMENT'S CURRENT MARKET APPRAISAL VALUE AND 19.4 TIMES HIGHER THAN NEXT HIGH BID AND INQUIRY SHOULD HAVE BEEN MADE FURTHER INTO CORRECTNESS OF PRICE. SEASIDE SURPLUS: A DECISION HAS BEEN REQUESTED FROM OUR OFFICE BY THE DEFENSE SUPPLY AGENCY (DSA) AS TO WHETHER A MISTAKE IN BID UNDER SALES INVITATION NO. 41- 5058 MAY BE CORRECTED EVEN THOUGH THAT MISTAKE WAS NOT ALLEGED BY SEASIDE SURPLUS UNTIL AFTER AWARD.

B-182893, JAN 17, 1975

REFORMATION OF ITEM PRICE OF SALES CONTRACT MAY BE PERMITTED (PRICE WOULD STILL BE HIGH) NOTWITHSTANDING FACT THAT CONTRACTING OFFICER HAD ALREADY PERMITTED CORRECTION OF ITEM PRICE AFTER REQUEST FOR VERIFICATION SINCE CONTRACTING OFFICER HAD NOT ADVISED OF REASONS FOR MAKING REQUEST AND SINCE ITEM PRICE AS ORIGINALLY CORRECTED WAS STILL 5.8 TIMES HIGHER THAN GOVERNMENT'S CURRENT MARKET APPRAISAL VALUE AND 19.4 TIMES HIGHER THAN NEXT HIGH BID AND INQUIRY SHOULD HAVE BEEN MADE FURTHER INTO CORRECTNESS OF PRICE.

SEASIDE SURPLUS:

A DECISION HAS BEEN REQUESTED FROM OUR OFFICE BY THE DEFENSE SUPPLY AGENCY (DSA) AS TO WHETHER A MISTAKE IN BID UNDER SALES INVITATION NO. 41- 5058 MAY BE CORRECTED EVEN THOUGH THAT MISTAKE WAS NOT ALLEGED BY SEASIDE SURPLUS UNTIL AFTER AWARD.

SEASIDE SURPLUS SUBMITTED A BID ON THREE ITEMS, INCLUDING ITEMS 106 AND 108, WHICH WERE BID AT "10.68" AND "6.99" PER POUND, RESPECTIVELY. PRIOR TO AWARD, THE CONTRACTING OFFICER REQUESTED A VERIFICATION OF THE BIDS OF $10.68 AND $6.99 PER POUND. SEASIDE SURPLUS VERIFIED THOSE PRICES TO BE CORRECT. NOTWITHSTANDING THE VERIFICATION, THE CONTRACTING OFFICER AGAIN CONTACTED THE BIDDER TO REQUEST FURTHER CONFIRMATION OF THE BIDS ON THOSE ITEMS. HE WAS NOW ADVISED THAT THE DECIMAL POINT HAD BEEN MISPLACED IN THE PRICES AND THAT THEY HAD BEEN MEANT AS "CENTS PER POUND." THUS, SEASIDE SURPLUS VERIFIED, BOTH ORALLY AND BY SUBSEQUENT LETTER, THE CORRECT PRICES TO BE $0.1068 AND $0.6999. CONTRACT NO. 41-5058-190 WAS AWARDED TO SEASIDE SURPLUS ON THIS BASIS.

ALMOST IMMEDIATELY AFTER THE AWARD WAS MADE, A REPRESENTATIVE OF SEASIDE SURPLUS NOTIFIED THE CONTRACTING OFFICER THAT THE CONTRACT ON ITEM 108 HAD BEEN ERRONEOUSLY AWARDED AND THAT THE UNIT PRICE HAD BEEN INTENDED AS 6.99 CENTS PER POUND. CONSEQUENTLY, CORRECTION OF THE CONTRACT WAS REQUESTED. IT IS RECOMMENDED BY DSA THAT CORRECTION BE ALLOWED. THE NEXT HIGH BID ON THE ITEM WAS $0.0361 PER POUND, AND THE CURRENT MARKET APPRAISAL ESTABLISHED PRIOR TO AWARD WAS $0.12 PER POUND. THUS THE AWARD PRICE WAS 19.4 TIMES THE AMOUNT OF THE NEXT LOW BID AND 5.8 TIMES THE CURRENT MARKET APPRAISAL VALUE. IT IS BELIEVED THAT THE VERIFICATION OBTAINED WAS INADEQUATE IN THAT THE BIDDER WAS NOT INFORMED OF THE NATURE OF THE SUSPECTED ERROR OR OF THE DISPARITY IN THE BIDS.

WE MUST AGREE. IN VIEW OF THE GREAT DISPARITY BETWEEN THE ORIGINALLY CORRECTED BID OF $0.699 AND THE SECOND HIGH BID AND MARKET APPRAISAL, WE BELIEVE THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED THE BIDDER TO VERIFY ITS PRICE AGAIN, ADVISING HIM OF THE REASONS THEREFOR. B-178974, JULY 23, 1973; 53 COMP. GEN. 187 (1973). SINCE THE BID, AS CORRECTED ($0.0699), WOULD STILL HAVE BEEN HIGH, THE CONTRACT MAY BE REFORMED TO REFLECT THIS UNIT PRICE.