[Protest of Army Contract Award for Paint Removal]
Highlights
A firm protested an Army contract award for paint removal, contending that: (1) its bid contained a clerical error for which correction should be allowed; and (2) the Army improperly rejected its low bid as ambiguous. GAO held that the: (1) protester's bid price could not be ascertained with certainty; (2) alleged clerical error was not subject to correction; and (3) Army properly rejected the protester's bid. Accordingly, the protest was denied.
B-197437, MAR 3, 1981
PRECIS-UNAVAILABLE
WILLIAM MATHIS: ACTING ADMINISTRATOR, EXECUTIVE OFFICE OF THE PRESIDENT:
ENCLOSED FOR YOUR INFORMATION IS A COPY OF A RECENT DECISION REGARDING A CLAIM SUBMITTED BY B & A ELECTRIC COMPANY, INC. UNDER A CONTRACT WITH THE BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR. IN THE B & A DECISION, WE HELD THAT THE AGENCY IMPROPERLY AWARDED A CONTRACT TO B & A NOTWITHSTANDING THAT FIRM'S CLAIM OF MISTAKE INSTEAD OF REFERRING THE MATTER TO OUR OFFICE AS A DOUBTFUL CASE UNDER FEDERAL PROCUREMENT REGULATION (FPR) SEC. 1-2.406-3(E) (1964 ED., AMEND. 204).
AS YOU KNOW, THE FPR, PURSUANT TO AUTHORITY DELEGATED BY THIS OFFICE, SEE 38 COMP.GEN. 177 (1958), PROVIDE THAT AN AGENCY MAY PERMIT A BIDDER TO WITHDRAW ITS BID IF A MISTAKE IS ALLEGED PRIOR TO CONTRACT AWARD ONLY IF THE BIDDER PROVIDES "CLEAR AND CONVINCING EVIDENCE" THAT A MISTAKE WAS MADE. FPR SEC. 1-2.406-3(A)(1) (1964 ED., AMEND. 165). IN THE ABSENCE OF SUCH EVIDENCE, A CONTRACTING OFFICER IS WITHOUT AUTHORITY TO PERMIT A BIDDER TO WITHDRAW ITS BID. HOWEVER, IF THE BIDDER SUBMITS SOME EVIDENCE TO THE AGENCY WHICH REASONABLY SUPPORTS THE ALLEGATION OF ERROR, WE HAVE HELD THAT THE CONTRACTING OFFICER IS TO REFER THE MATTER AS A DOUBTFUL CASE TO OUR OFFICE FOR DETERMINATION. MURPHY BROTHERS, INC. - RECONSIDERATION, 58 COMP.GEN. 185 (1978), 78-2 CPD 440. IN DETERMINING WHETHER TO PERMIT A BIDDER TO WITHDRAW, OUR OFFICE DOES NOT APPLY THE "CLEAR AND CONVINCING" STANDARD OF FPR SEC. 1-2.406-3(A)(1) BUT RATHER APPLIES THE MORE LIBERAL STANDARD REQUIRED BY THE COURT OF CLAIMS, I.E., WHETHER IT REASONABLY APPEARS THAT THE BIDDER MADE AN ERROR. SEE 36 COMP. GEN. 441 (1956). THE DICHOTOMY REFLECTS OUR POSITION THAT THIS OFFICE IS PRIMARILY RESPONSIBLE FOR DETERMINING WHETHER A BIDDER SHOULD BE PERMITTED TO CORRECT OR WITHDRAW ITS BID BUT THAT IN CLEAR CASES IT IS ADMINISTRATIVELY APPROPRIATE FOR CONTRACTING OFFICERS TO MAKE THAT DETERMINATION WITHOUT THE NEED FOR REFERRAL TO US.
WITH THE ENACTMENT OF THE CONTRACT DISPUTES ACT OF 1978, 41 U.S.C. SECS. 601-613 (SUPP. III 1979), HOWEVER, EXECUTIVE AGENCY CONTRACTING OFFICERS AND BOARDS OF CONTRACT APPEALS HAVE BEEN AUTHORIZED TO REFORM AND RESCIND CONTRACTS, AND THE GENERAL SERVICES ADMINISTRATION HAS AMENDED THE FPR TO PROVIDE FOR CONTRACTING OFFICER RESOLUTION OF POST AWARD MISTAKE-IN-BID CLAIMS AND FOR THE APPEAL OF CONTRACTING OFFICER DECISIONS ON THOSE CLAIMS TO THE APPLICABLE BOARD OF CONTRACT APPEALS, FPR SEC. 1-2.406-4 (1964 ED., AMEND. 204), ALTHOUGH THE PROVISIONS REGARDING WITHDRAWAL OR CORRECTION OF BIDS WHERE AN ERROR IS ALLEGED PRIOR TO AWARD WERE LEFT UNCHANGED.
SINCE CONTRACTING OFFICERS NOW HAVE AUTHORITY TO RESCIND AND REFORM CONTRACTS, WE BELIEVE IT MAY BE APPROPRIATE TO PERMIT CONTRACTING OFFICERS TO APPLY THE JUDICIALLY-MANDATED STANDARD OF REASONABLENESS WHEN DETERMINING WHETHER A BIDDER MAY WITHDRAW ITS BID INSTEAD OF THE MORE STRINGENT CLEAR AND CONVINCING STANDARD. THIS WOULD RESULT IN A UNIFORM STANDARD THROUGHOUT THE GOVERNMENT AND SHOULD ELIMINATE THE NEED FOR THE REFERRAL OR FILING OF MOST CLAIMS FOR WITHDRAWAL WITH THIS OFFICE. COURSE, OUR DELEGATION OF THIS BROADER AUTHORITY WOULD REQUIRE REVISING THE APPLICABLE REGULATIONS SO THAT THE DELEGATION CAN BE EFFECTED AT THE CONTRACTING OFFICER LEVEL. WE WOULD EXPECT THAT SUCH REVISED REGULATIONS WOULD PROVIDE THAT CONTRACTING AGENCIES MAY REFER DOUBTFUL CASES TO OUR OFFICE AND WOULD POINT OUT THAT BIDDERS MAY REQUEST GAO REVIEW OF CONTRACTING OFFICER DETERMINATIONS. OF COURSE, THIS CHANGE WOULD NOT AFFECT OUR EXISTING REVIEW OF PRE-AWARD REQUESTS FOR BID CORRECTION.
WE WOULD APPRECIATE RECEIVING YOUR VIEWS ON THIS MATTER.
DIGEST
IN VIEW OF AUTHORITY CONFERRED BY CONTRACT DISPUTES ACT OF 1978, 41 U.S.C. SECS. 601-613 (SUPP. III 1979) ON CONTRACTING OFFICERS AND BOARDS OF CONTRACT APPEALS TO RESCIND AND REFORM CONTRACTS, GAO BELIEVES IT MAY BE APPROPRIATE TO ALLOW CONTRACTING OFFICERS TO PERMIT WITHDRAWAL OF BIDS WHERE IT REASONABLY APPEARS ERROR OCCURRED RATHER THAN REQUIRING "CLEAR AND CONVINCING EVIDENCE" OF ERROR AND WITHOUT NEED FOR FIRST REFERRING MATTER TO GAO AS "DOUBTFUL" CASE.