B-183424, APR 30, 1975

B-183424: Apr 30, 1975

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SHOULD HAVE QUANTUM VALEBANT OR QUANTUM MERUIT PAYMENT. ALTHOUGH BASIC RULE IS THAT BIDS MAY NOT BE RECALCULATED TO INCLUDE FACTORS NOT IN MIND WHEN BID WAS SUBMITTED. CONTRACT WORK HAS BEEN COMPLETED AND RESCISSION IS NO LONGER FEASIBLE. FPML-T4-69700-A-7-3-74 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA). WAS THE ONLY BIDDER FOR ITEM 170. WAS AWARDED A CONTRACT FOR THIS ITEM ON SEPTEMBER 6. WHICH WAS IN THE AMOUNT OF $1. GSA ASKED IHC IF IT WOULD SUPPLY THE VEHICLE IF THE CONTRACT WAS MODIFIED TO INCLUDE THE OMITTED $1. IHC AGREED AND APPARENTLY CONSIDERED THAT IN VIEW OF THE AGREEMENT IT WAS AUTHORIZED TO PROCEED ON THAT BASIS. SINCE THE TRUCK WAS COMPLETED IN JANUARY 1975 AND SCHEDULED FOR DELIVERY IN FEBRUARY 1975.

B-183424, APR 30, 1975

TRUCK CONTRACTOR WHO ALLEGED MISTAKE IN BID BECAUSE OF OMISSION OF PRICE FOR DUMP BODY AND WHO FURNISHED CLEAR AND CONVINCING EVIDENCE OF ERROR OF WHICH CONTRACTING OFFICER HAD CONSTRUCTIVE NOTICE, SHOULD HAVE QUANTUM VALEBANT OR QUANTUM MERUIT PAYMENT, SINCE, ALTHOUGH BASIC RULE IS THAT BIDS MAY NOT BE RECALCULATED TO INCLUDE FACTORS NOT IN MIND WHEN BID WAS SUBMITTED, CONTRACT WORK HAS BEEN COMPLETED AND RESCISSION IS NO LONGER FEASIBLE.

INTERNATIONAL HARVESTER COMPANY:

INVITATION FOR BIDS NO. FPML-T4-69700-A-7-3-74 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), ON JUNE 3, 1974, FOR THE PROCUREMENT OF LIGHT TRUCKS.

INTERNATIONAL HARVESTER COMPANY (IHC), ONE OF THREE BIDDERS FOR THE 218 ITEMS SOLICITED, WAS THE ONLY BIDDER FOR ITEM 170, AND WAS AWARDED A CONTRACT FOR THIS ITEM ON SEPTEMBER 6, 1974. ON OCTOBER 1, 1974, IHC NOTIFIED GSA THAT IT HAD MISTAKENLY OMITTED THE COST OF THE DUMP BODY IN ITS BID FOR ITEM 170 AND REQUESTED CANCELLATION OF THE CONTRACT. IHC DOCUMENTED EVIDENCE OF ITS ERROR IN BID BY SUBMITTING ITS WORKSHEETS AND A DUMP BODY QUOTATION OF SEPTEMBER 14, 1974, FROM WATSON AUTOMATIVE EQUIPMENT CO., WHICH WAS IN THE AMOUNT OF $1,501.80. GSA RECEIVED A DUMP BODY QUOTATION FROM ANOTHER PRODUCER IN THE AMOUNT OF $1,585. IN VIEW OF THE DOCUMENTATION, GSA CONCLUDED THAT IHC HAD SUBMITTED CLEAR AND CONVINCING EVIDENCE OF AN ERROR IN BID.

GSA ASKED IHC IF IT WOULD SUPPLY THE VEHICLE IF THE CONTRACT WAS MODIFIED TO INCLUDE THE OMITTED $1,501.80 COST OF THE DUMP BODY. IHC AGREED AND APPARENTLY CONSIDERED THAT IN VIEW OF THE AGREEMENT IT WAS AUTHORIZED TO PROCEED ON THAT BASIS, SINCE THE TRUCK WAS COMPLETED IN JANUARY 1975 AND SCHEDULED FOR DELIVERY IN FEBRUARY 1975.

THE CONTRACTING OFFICER STATES IN HIS FINDINGS AND DETERMINATIONS THAT ON THE BASIS OF THE KNOWLEDGE WHICH HE AND THE AGENCY POSSESS IN THE PROCUREMENT OF VEHICLES, HE SHOULD HAVE BEEN ON NOTICE THAT A MISTAKE MAY HAVE BEEN MADE BY IHC IN ITS BID. HE STATES THAT ONE OF THE KEY FACTORS WHICH SHOULD HAVE PLACED HIM ON NOTICE OF THE PROBABILITY OF AN ERROR IN BID WAS THE CLOSE RANGE OF IHC'S BID PRICES FOR ITEMS 168, 169 AND 171 FOR VEHICLES SIMILAR TO ITEM 170, EXCEPT THAT THEY DID NOT INCLUDE A DUMP BODY AS DID ITEM 170, AND THEREFORE SHOULD HAVE BEEN MUCH LOWER IN PRICE THAN ITEM 170. IHC'S BIDS FOR ITEMS 168, 169 AND 171 WERE $4,228.41, $4,182.41 AND $4,203.41, RESPECTIVELY, WHILE ITS BID FOR ITEM 170 WAS $4,354.58. MOREOVER, THE BID PLACED BY GENERAL MOTORS CORPORATION FOR ITEM 172 FOR A SIMILAR VEHICLE WITHOUT A DUMP BODY IN THE AMOUNT OF $4,269.53 WAS ONLY $85.05 LESS THAN IHC'S BID FOR ITEM 170. GSA COUNSEL CONCURS THAT THE SMALL PRICE VARIANCES BETWEEN ITEM 170 AND ITEMS 168, 169, 171 AND 172 SHOULD HAVE ALERTED THE CONTRACTING OFFICER TO THE PROBABILITY OF AN ERROR IN THE IHC BID.

UPON THE BASIS OF CONSTRUCTIVE NOTICE OF ERROR, THE CONTRACTING OFFICER SHOULD HAVE SOUGHT VERIFICATION FROM IHC AS TO THE ACCURACY OF ITS BID. WHERE THE CONTRACTOR ACTUALLY COMMITS AN ERROR IN BID AND THE CONTRACTING OFFICER HAS CONSTRUCTIVE NOTICE OF THE ERROR AND FAILS TO SEEK VERIFICATION PRIOR TO AWARD, NO VALID CONTRACT IS CONSUMMATED. MATTER OF UBIQUE LTD., B-180610, AUGUST 12, 1974. UNDER THESE CIRCUMSTANCES, THE CONTRACTOR CAN BE RELIEVED OF HIS OBLIGATION TO PERFORM. C.N. MONROE MANUFACTURING COMPANY V. UNITED STATES, 143 F. SUPP. 449 (E.D. MICH. 1956).

HOWEVER, AS GSA COUNSEL STATES, TO PERMIT CORRECTION OF AN ERROR IN BID AFTER AWARD, THE CONTRACTOR, IN ADDITION TO SHOWING CLEAR AND CONVINCING EVIDENCE OF AN ERROR IN BID OF WHICH THE CONTRACTING OFFICER HAS CONSTRUCTIVE NOTICE, MUST ALSO SUBMIT DOCUMENTARY EVIDENCE OF THE BID ACTUALLY INTENDED. IN THAT CONNECTION, 17 COMP. GEN. 575 (1937) IS QUOTED AS FOLLOWS:

"*** THE BASIC RULE IS *** THAT BIDS MAY NOT BE CHANGED AFTER THEY ARE OPENED, AND THE EXCEPTION PERMITTING A BID TO BE CORRECTED UPON SUFFICIENT FACTS ESTABLISHING THAT A BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN THAT SET DOWN ON THE BID FORM, WHERE THE CONTRACTING OFFICER IS ON NOTICE OF THE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND TO PERMITTING A BIDDER TO RECALCULATE AND CHANGE HIS BID TO INCLUDE FACTORS WHICH HE DID NOT HAVE IN MIND WHEN HIS BID WAS SUBMITTED ***."

GSA COUNSEL POINTS OUT THAT ALTHOUGH IHC WAS UNABLE TO MEET THIS REQUIREMENT BECAUSE AT THE TIME OF BID SUBMISSION IT HAD NOT CALCULATED THE PRICE FOR THE DUMP BODY, IT HAS NEVERTHELESS PERFORMED THE CONTRACT.

SINCE THE CONTRACT WORK HAS BEEN COMPLETED AND RESCISSION IS NO LONGER FEASIBLE, PAYMENT SHOULD BE MADE TO IHC ON A QUANTUM VALEBANT OR QUANTUM MERUIT BASIS, THAT IS, THE REASONABLE VALUE OF THE SERVICES AND MATERIALS ACTUALLY FURNISHED ($4,354.58 AS ORIGINALLY BID PLUS THE AMOUNT OF $1,501.80 FOR THE DUMP BODY). SEE MATTER OF UBIQUE LTD., SUPRA; 53 COMP. GEN. 368 (1973).