Request for Contract Rescission

An invitation for bids for 1200 spur gears was totally set aside for small business concerns by the Defense Logistics Agency (DLA). The contract was awarded to the low bidder, who did not have time to inspect the relevant drawings prior to bid opening date. Some 6 months after the contract award and 1 day before the first scheduled delivery, the awardee, alleging a mistake in bid, complained that by making his bid without seeing the drawings he had run into unanticipated costs. The firm argued that the contracting officer should have been on notice of the probability of error and should have requested that the firm verify its bid in view of the following circumstances: (1) the drawings incorporated by reference in the solicitation described a much more sophisticated item than it would appear from the face of the solicitation; (2) the item was available only from the second low bidder, a large business; and (3) there were material discrepancies between the firm's bid and those of other bidders. The firm, requesting a review after DLA denied relief, argued that the gears were available from only one large manufacturing concern, and this fact should have cast doubt upon any lower bid from a small business firm. GAO noted that the awardee's bid was within the range of recent contracts for the item, even though it was approximately one-third less than that of the next low small business concern. Since the large business firm was ineligible for award under this procurement, there was no need for the contracting officer to consider its bid in looking at the disparity in prices. In fact, past procurements of the item included firms other than the large business concern mentioned by the awardee. It was held that the contract may not be rescinded on the basis of a mistake in bid alleged after the contract award.