Protest Against Upward Correction of Bid

B-196282: Mar 10, 1980

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A firm protested the determination by the Department of State to permit an upward correction of a competitor's bid and the subsequent award of a contract to that firm. The bid submitted by the awardee had been prepared with zeros entered as the price for 9 of the relevant 13 labor categories and was the lowest of the bids submitted. It was reported that the contracting officer became suspicious that a clerical error had occurred in the awardee's bid. The contracting officer then contacted the awardee by telephone for verification and accepted an oral explanation. After examining a bid abstract from a prior procurement under which the awardee bid a single base rate for employees, the contracting officer concluded that the zeros did, in fact, constitute clerical mistakes and reevaluated the bid. The protester contended that the awardee's bid should have been rejected as nonresponsive, correction should not have been permitted, and since it brought the awardee's bid to within $662 of the protester's bid it opened to question the credibility and integrity of the competitive procurement process. GAO held that the entry of zero in a space provided for the price of an item can only be reasonably interpreted as an intent to supply the item. Therefore, the bid was correctly deemed responsive to the solicitation. Regarding the the existence of clerical error in the awardee's bid, as a general matter clerical errors are those that result from the transposition of rates, classifications, or figures and include obvious misplacement of decimal points, obvious incorrect discounts, and obvious mistakes in the designation of units. GAO held that the evidence before the contracting officer could not reasonably justify a determination that there was an apparent clerical mistake. Thus, correction should not have been permitted absent submission of clear and convincing evidence of the mistake, the manner in which it occurred, and the intended bid. The standard of proof was not met in this case, and GAO concluded that there was no reasonable basis for the decision to allow correction. Finally, GAO held that the correction should not have been allowed in any event, since the corrected bid price came within one-half of one percent of the next low bid. GAO recommended that the contract be terminated for the convenience of the Government and reawarded to the protester. The protest was sustained.