B-204356, MAY 27, 1983, OFFICE OF GENERAL COUNSEL

B-204356, MAY 27, 1983, OFFICE OF GENERAL COUNSEL

PRECIS-UNAVAILABLE

THE HONORABLE ROBERT T. STAFFORD CHAIRMAN, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS:

THIS IS IN REPLY TO YOUR LETTERS OF MARCH 15 AND MAY 3, 1983 REGARDING OUR OFFICE'S ROLE IN THE BID CORRECTION PROCESS. YOU EXPRESS CONCERN THAT THIS POLICY CREATES A CLIMATE FOR POSSIBLE BID MANIPULATION AND ASK WHAT OUR OFFICE IS DOING TO PREVENT POSSIBLE ABUSES.

AS YOU STATE, THE AUTHORITY TO CORRECT MISTAKES IN BID RESTED ORIGINALLY WITH THIS OFFICE. HOWEVER, THIS AUTHORITY HAS SINCE BEEN DELEGATED TO BOTH THE DEFENSE AGENCIES AND THE CIVILIAN AGENCIES. AS A RESULT, THE EXECUTIVE AGENCIES ARE NOW AUTHORIZED TO CORRECT MISTAKES IN BIDS WHEN A BIDDER ALLEGES THE MISTAKE PRIOR TO AWARD AND PRESENTS CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE EXISTENCE OF THE MISTAKE AND THE BID ACTUALLY INTENDED. COPIES OF THE PERTINENT REGULATIONS, DEFENSE ACQUISITION REGULATION (DAR) SEC. 2-406 AND FEDERAL PROCUREMENT REGULATIONS (FPR) SEC. 1-2.406, ARE ATTACHED FOR YOUR INFORMATION. THESE REGULATIONS INDICATE, THE WEIGHT TO BE GIVEN THE EVIDENCE IS A QUESTION OF FACT FOR DETERMINATION BY THE PROCURING AGENCY, A JUDGMENT THAT WE WILL NOT DISTURB IF IT HAS A REASONABLE BASIS. WE BECOME INVOLVED IN MISTAKES IN BIDS ONLY IN THOSE LIMITED INSTANCES WHERE A BIDDER CHALLENGES THE AGENCY DETERMINATION BY PROTEST TO OUR OFFICE OR THE AGENCY REFERS THE MATTER TO US AS A DOUBTFUL CASE.

WE RECOGNIZE THAT THE PROCESS FOR CORRECTING MISTAKES IN BIDS IS SUSCEPTIBLE TO ABUSE. FOR THIS REASON, THE PROCESS HAS A NUMBER OF SAFEGUARDS TO PREVENT OR AT LEAST MINIMIZE ABUSE. FIRST, THE AUTHORITY TO CORRECT IS LIMITED TO A SINGLE HIGH-LEVEL OFFICIAL WITHIN EACH AGENCY. SECOND, DEFENSE AGENCY CONTRACTING PERSONNEL SEEKING TO PERSUADE THAT OFFICIAL TO PERMIT CORRECTION MUST OBTAIN THE BEST AVAILABLE EVIDENCE:

"*** CONCLUSIVELY ESTABLISHING NOT ONLY THE EXISTENCE OF THE ERROR, BUT ITS NATURE, HOW IT OCCURRED, AND WHAT THE BIDDER ACTUALLY INTENDED TO BID. A MERE STATEMENT THAT THE ADMINISTRATIVE OFFICIALS THEMSELVES ARE SATISFIED THAT AN ERROR WAS MADE IS INSUFFICIENT."

THE FPR PLACES A SIMILAR BURDEN UPON CIVILIAN AGENCY PERSONNEL SEEKING TO CORRECT A BID. FURTHER, THE CLOSER AN ASSERTED INTENDED BID IS TO THE NEXT LOW BID, THE GREATER THE DEGREE OF PROOF REQUIRED, AND, FOR THAT REASON, CORRECTION IS OFTEN DISALLOWED WHEN THE CORRECTED BID WOULD COME TOO CLOSE TO THE NEXT LOW BID. MOREOVER, DOWNWARD CORRECTION RESULTING IN DISPLACEMENT OF A LOWER BIDDER IS NOT PERMITTED UNLESS THE ERROR MADE AND THE BID ACTUALLY INTENDED ARE EVIDENT FROM THE FACE OF THE BID ITSELF. FINALLY, FOR ADVERTISED BIDDING, THE ENTIRE PROCESS IS OPEN TO PUBLIC SCRUTINY, PARTICULARLY THAT OF OTHER INTERESTED BIDDERS.

ALTHOUGH THE POSSIBILITY FOR ABUSE EXISTS, THE PRESENT POLICY HAS POSITIVE BENEFITS BOTH FOR BIDDERS AND THE GOVERNMENT. FOR THE BIDDER, AUTOMATIC ELIMINATION OF ITS BID FROM CONSIDERATION CAN BE VIEWED AS UNDULY HARSH WHERE THERE IS ADEQUATE EVIDENCE TO SUPPORT CORRECTION. FOR THE GOVERNMENT, CORRECTION CAN RESULT IN SIGNIFICANT SAVINGS, PARTICULARLY WHERE THERE IS A WIDE DISPARITY BETWEEN THE CORRECTED LOW BID AND THE NEXT BID. SIMILARLY, THE DOWNWARD REVISION OF A HIGHER BID UNDER THE CORRECTION PROCEDURES ALSO RESULTS IN SAVINGS TO THE GOVERNMENT.

ON BALANCE, WE BELIEVE THAT THE SYSTEM HAS ADEQUATE SAFEGUARDS TO ASSURE ITS OVERALL INTEGRITY. FURTHER, ALTHOUGH THE MINIMUM AMOUNT OF EVIDENCE CONSIDERED TO BE CLEAR AND CONVINCING CAN VARY WITH THE CIRCUMSTANCES, THE REGULATORY GUIDANCE DESCRIBED ABOVE MAKES PLAIN THAT THE EVIDENCE MUST BE SUBSTANTIAL. NEVERTHELESS, IF YOU BELIEVE THAT DESPITE THESE SAFEGUARDS THE PRESENT PROCEDURES WARRANT RECONSIDERATION, YOU MIGHT WANT TO REFER THE MATTER TO THE ORGANIZATION RESPONSIBLE FOR ESTABLISHING EXECUTIVE AGENCY CONTRACTING POLICY, THE OFFICE OF FEDERAL PROCUREMENT POLICY, FOR A THOROUGH REVIEW OF THE SUITABILITY OF THE EXISTING POLICY IN LIGHT OF EXECUTIVE BRANCH EXPERIENCE WITH IT.