B-152221, DEC. 4, 1963

B-152221, DEC. 4, 1963

TO THE POSTMASTER GENERAL:

THERE IS ENCLOSED A COPY OF OUR DECISION OF TODAY TO THE CHERRY COMPANY WITH RESPECT TO ITS PROTEST AGAINST THE AWARD MADE TO THE WARE BROS. COMPANY UNDER INVITATION FOR BIDS NO. 6, ISSUED ON JUNE 3, 1963, BY THE PHILADELPHIA REGIONAL OFFICE FOR PRINTING SERVICES DURING THE 1964 FISCAL YEAR. THIS PROTEST WAS THE SUBJECT OF A REPORT DATED OCTOBER 24, 1963, FROM THE ACTING ASSISTANT POSTMASTER GENERAL, BUREAU OF FACILITIES.

SINCE THE WARE BROS. COMPANY HAS REQUESTED TO BE RELIEVED FROM ITS OBLIGATIONS UNDER THE CONTRACT UPON WHICH ITS BID IN RESPONSE TO INVITATION NO. 6 WAS BASED, THE ACTING ASSISTANT POSTMASTER GENERAL TRANSMITTED SUCH REQUEST FOR DECISION BY OUR OFFICE.

AS STATED IN OUR DECISION OF TODAY, WARE ADVISED BY LETTER OF JUNE 28, 1963, THAT ITS BID PRICES ON PART I AND PART II WERE BASED ON THE ASSUMPTION THAT THE CONTRACT WOULD BE AWARDED AS A UNIT. WARE FURTHER ADVISED THAT IF ONLY ONE PART WAS TO BE AWARDED, IT WOULD CREATE A DIRE HARDSHIP AND REQUESTED PERMISSION TO WITHDRAW ITS BID. WARE MADE NO CLAIM, PRIOR TO AWARD, THAT IT MADE AN ERROR IN BID, ONLY THAT IT BID ON AN "ALL OR NONE" BASIS. THE RECORD DOES NOT INDICATE THAT WARE'S AGGREGATE BID OR ITS BID PRICES WERE UNREASONABLE OR OUT OF LINE WITH OTHER BIDS RECEIVED. RATHER, IT WAS ADMINISTRATIVELY CONCLUDED THAT WHILE WARE'S AGGREGATE BID WAS ABOUT 90 PERCENT OF THE COMBINED SINGLE BIDS OF THE RAPID COMPOSITION SERVICE ON PART I AND THE CHERRY COMPANY ON PART II OF THE INVITATION, IT WAS REASONABLE TO ASSUME THAT WARE'S AGGREGATE BID WOULD BE LESS THAN THE SUM OF THE BIDS SUBMITTED BY THESE OTHER TWO BIDDERS BECAUSE OVERHEAD AND OTHER CONSTANT COSTS WOULD BE SPREAD OVER MORE WORK. HENCE, THERE WAS NO REAL BASIS TO SUSPECT THAT WARE HAD MADE AN ERROR IN ITS AGGREGATE BID. WE AGREE THAT THE CONTRACTING OFFICER WAS NOT ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE WARE BID WHEN CONSIDERED ON AN "ALL OR ONE" BASIS. THE ONLY DOUBT THAT THE CONTRACTING OFFICER HAD AS TO THE CORRECTNESS OF THE WARE BID WAS STATED IN HIS LETTER OF JUNE 17, 1963, TO WARE. IN THAT LETTER WARE WAS REQUESTED TO ADVISE WHETHER IT WAS TRUE THAT ITS BID WAS SUBMITTED ON THE BASIS THAT BOTH PARTS OF THE INVITATION WOULD BE AWARDED AS A UNIT. WARE CONFIRMED ON JUNE 28, 1963, THAT ITS BID WAS SUBMITTED ON A ,PACKAGE PRICE" (COMPOSITION AND PRINTING) BASIS, THAT IS,"ALL OR NONE.' THEREAFTER, ON AUGUST 5, 1963, AWARD OF BOTH PART I AND PART II WAS MADE TO WARE AT ITS AGGREGATE BID PRICE. SUBSEQUENT THERETO, WARE ORALLY ALLEGED THAT IT MADE AN ERROR AS TO PART I. BY LETTER DATED AUGUST 21, 1963, WARE REQUESTED TO BE RELEASED FROM ITS CONTRACT BECAUSE OF ERROR IN BID, AND ADVISED THAT ITS ORIGINAL WORKSHEETS SHOWING HOW THE ERROR OCCURRED WERE EITHER LOST OR MISFILED AND THAT "WE HAVE NO OTHER EVIDENCE TO SUPPORT THIS ERROR.' IN LIEU OF THE ORIGINAL WORKSHEETS, WARE SUBMITTED A COST AND SELLING PRICE BREAKDOWN TO SUPPORT ITS CLAIM FOR RELIEF.

WHILE IT MAY BE THAT WARE DID, IN FACT, MAKE AN ERROR IN ITS BID, THE ONLY QUESTION NOW FOR CONSIDERATION IS WHETHER THE ACCEPTANCE OF THE WARE BID IN THE AGGREGATE CONSUMMATED A VALID AND BINDING CONTRACT. ACCEPTANCE OF A BID RESULTS IN A VALID CONTRACT UNLESS THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, OF SUCH CIRCUMSTANCES AS WOULD MAKE THE ACCEPTANCE AN ACT OF BAD FAITH. MOFFETT, HODGKINS AND CLARK COMPANY V. ROCHESTER, 178 U.S. 373. HERE, THE CONTRACTING OFFICER HAD NO ACTUAL NOTICE OF ANY ERROR IN BID PRIOR TO AWARD AND THERE WAS NOTHING DONE OR REQUIRED TO HAVE BEEN DONE BY THE CONTRACTING OFFICER WHICH SHOULD HAVE PUT HIM ON NOTICE OF A POSSIBLE ERROR. IT IS SIGNIFICANT TO NOTE THAT WARE ITSELF CANNOT SUBSTANTIATE THE ERROR OR EXPLAIN HOW IT OCCURRED.

IN THESE CIRCUMSTANCES, WE FIND NO LEGAL BASES FOR RELIEVING WARE OF ITS OBLIGATIONS UNDER THE CONTRACT OR TO AUTHORIZE PAYMENT OF ANY AMOUNT IN ADDITION TO THE CONTRACT PRICE.