Request for Increase in Contract Price

After being awarded a contract by the Defense Logistics Agency (DLA) for 45,000 tons of bituminous coal, a firm found that it had made a bid error and requested an increase in the contract price. The awardee stated that it was not aware when making its bid that a reclamation fee was required under the Surface Mining Control and Reclamation Act of 1977, since the Act became effective only 2 months before bid opening. Therefore, the awardee failed to include the reclamation fee in its bid. If a mistake in bid is alleged after the award of a contract, GAO will grant relief only if the mistake was mutual or, in the case of a unilateral mistake, if the contracting officer was on actual or constructive notice of the error prior to award. The essence of mutual mistake is that the contract as reduced to writing does not reflect the actual agreement of the parties; however, this contract represented the parties' actual agreement. Concerning whether relief would be appropriate on the basis of a unilateral mistake, a valid and binding contract is consummated by the Government's acceptance of a responsive bid unless the contracting officer knew or should have known of the probability of an error in the bid but failed to take proper steps to verify it. In this case, when other acceptable bids received by DLA were compared with the awardee's low bid, they did not appear to be sufficiently in variance to have raised the presumption of error in the mind of the contracting officer. The request for an increase in the contract price was therefore denied.