B-176899, NOV 24, 1972

B-176899: Nov 24, 1972

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ALTHOUGH THERE WAS SUCH CLEAR AND CONVINCING EVIDENCE OF MISTAKE IN THE BID THAT THE GOVERNMENT WAS ON CONSTRUCTIVE NOTICE OF THIS ERROR. SINCE IT WOULD PERMIT THE CONTRACTOR TO RECALCULATE AND CHANGE ITS BID TO INCLUDE FACTORS IT DID NOT HAVE IN MIND WHEN IT ORIGINALLY SUBMITTED THE BID. THIS WAS A FORMALLY ADVERTISED PROCUREMENT FOR ELECTRIC KITCHEN RANGES. REFORMATION IS REQUESTED ON THE BASIS OF A MISTAKE DISCOVERED AFTER AWARD. ALTHOUGH IT WAS AWARDED THE CONTRACT ON THE BASIS OF THIS MODEL. ALTHOUGH CONCEDING THE PRESENCE OF CLEAR AND CONVINCING EVIDENCE OF MISTAKE AND THAT THE GOVERNMENT WAS ON CONSTRUCTIVE NOTICE OF THE ERROR BASED ON THE VARIATION IN BID PRICES AND THE FACT THAT $96 IS LOWER THAN THE FEDERAL SUPPLY SCHEDULE PRICE FOR A RANGE NOT OFFERING ALL THE FEATURES REQUIRED BY THE SOLICITATION - THE GENERAL COUNSEL CONTENDS THAT REFORMATION SHOULD NOT BE GRANTED IN THIS INSTANCE.

B-176899, NOV 24, 1972

CONTRACT - PRICE REFORMATION - RESCISSION - MISTAKE IN BID DECISION DENYING THE REQUEST OF WESTINGHOUSE ELECTRIC CORPORATION, FOR REFORMATION OF A CONTRACT AWARDED BY GSA FOR ELECTRIC KITCHEN RANGES SO AS TO INCREASE THE CONTRACT PRICE. ALTHOUGH THERE WAS SUCH CLEAR AND CONVINCING EVIDENCE OF MISTAKE IN THE BID THAT THE GOVERNMENT WAS ON CONSTRUCTIVE NOTICE OF THIS ERROR, THE CONTRACT MAY NOT BE REFORMED SO AS TO ALLOW CORRECTION OF THE BID, SINCE IT WOULD PERMIT THE CONTRACTOR TO RECALCULATE AND CHANGE ITS BID TO INCLUDE FACTORS IT DID NOT HAVE IN MIND WHEN IT ORIGINALLY SUBMITTED THE BID, BUT RATHER THE CONTRACT SHOULD BE RESCINDED, SEE B-174620, FEB. 2, 1972. HOWEVER, SINCE THE CONTRACTOR IN THIS CASE HAS PERFORMED SUBSTANTIALLY, IT MAY BE PAID ON A QUANTUM VALEBANT BASIS FOR THE ITEMS ALREADY DELIVERED, B-172076, APRIL 16, 1971.

TO MR. ARTHUR F. SAMPSON:

WE REFER TO LETTER DATED AUGUST 28, 1972, WITH ENCLOSURE, FROM THE GENERAL COUNSEL CONCERNING THE REQUEST OF WESTINGHOUSE ELECTRIC CORPORATION FOR REFORMATION OF CONTRACT GS-10S-32996, SO AS TO INCREASE THE CONTRACT PRICE FROM $38,112 TO $41,486.50.

THIS WAS A FORMALLY ADVERTISED PROCUREMENT FOR ELECTRIC KITCHEN RANGES. REFORMATION IS REQUESTED ON THE BASIS OF A MISTAKE DISCOVERED AFTER AWARD. SPECIFICALLY, WESTINGHOUSE ALLEGES THAT ITS RANGE MODEL KF-130, AT $96 A UNIT, DID NOT MEET THE SOLICITATION SPECIFICATION, ALTHOUGH IT WAS AWARDED THE CONTRACT ON THE BASIS OF THIS MODEL. SUBSEQUENTLY, WESTINGHOUSE OFFERED TO MEET ITS CONTRACT COMMITMENTS BY SUPPLYING A MODEL WHICH DID MEET ALL SPECIFICATIONS BUT AT A PRICE OF $109 EACH. "NEGOTIATIONS" EVENTUALLY REDUCED THE PRICE OF THIS MODEL TO $104.50 PER UNIT.

ALTHOUGH CONCEDING THE PRESENCE OF CLEAR AND CONVINCING EVIDENCE OF MISTAKE AND THAT THE GOVERNMENT WAS ON CONSTRUCTIVE NOTICE OF THE ERROR BASED ON THE VARIATION IN BID PRICES AND THE FACT THAT $96 IS LOWER THAN THE FEDERAL SUPPLY SCHEDULE PRICE FOR A RANGE NOT OFFERING ALL THE FEATURES REQUIRED BY THE SOLICITATION - THE GENERAL COUNSEL CONTENDS THAT REFORMATION SHOULD NOT BE GRANTED IN THIS INSTANCE. HE POINTS OUT THAT THE EVIDENCE AT HAND DOES NOT INDICATE WHAT THE WESTINGHOUSE BID PRICE WOULD HAVE BEEN BUT FOR THE ERROR OR THAT A BID WOULD DEFINITELY HAVE BEEN SUBMITTED IF THE SPECIFICATION HAD BEEN FULLY COMPREHENDED AT THE TIME OF SUBMISSION.

WE BELIEVE THAT THE GENERAL COUNSEL'S POSITION IS FULLY SUPPORTED BY OUR DECISION B-174620, FEBRUARY 2, 1972. IN THAT CASE, A BIDDER ERRONEOUSLY BID ONE MODEL OF CAMERA AND, AFTER DISCOVERY OF THE ERROR, OFFERED TO FURNISH ANOTHER MODEL WHICH MET SPECIFICATIONS, BUT AT A HIGHER PRICE. NOTED THAT THIS SITUATION WAS NOT ONE WHERE A BID WAS TO BE CORRECTED TO INCLUDE A PREVIOUSLY CALCULATED COST ITEM WHICH HAD BEEN INADVERTENTLY OMITTED FROM THE AMOUNT OF THE ORIGINAL BID. THEREFORE, CORRECTION OF THE BID WAS NOT ALLOWED SINCE IT PERMITTED THE BIDDER TO RECALCULATE AND CHANGE ITS BID TO INCLUDE FACTORS WHICH IT DID NOT HAVE IN MIND WHEN IT SUBMITTED THE BID ORIGINALLY. HOWEVER, BECAUSE THE GOVERNMENT WAS ON CONSTRUCTIVE NOTICE OF THE BIDDER'S UNILATERAL MISTAKE, RESCISSION OF THAT PART OF THE CONTRACT COVERING THE CAMERA WAS RECOMMENDED.

BID CORRECTION IS EQUALLY IMPERMISSIBLE HERE AND THE CONTRACT SHOULD BE RESCINDED IN VIEW OF THE GOVERNMENT'S CONSTRUCTIVE KNOWLEDGE OF THE WESTINGHOUSE MISTAKE AND ITS FAILURE TO VERIFY THAT FIRM'S BID PRICE. HOWEVER, SINCE WE UNDERSTAND THAT WESTINGHOUSE HAS PERFORMED SUBSTANTIALLY, IT MAY BE PAID ON A QUANTUM VALEBANT BASIS FOR THE RANGES DELIVERED. B-172076, APRIL 16, 1971. IN THIS REGARD, WE NOTE THAT PREVIOUS DISCUSSIONS BETWEEN THE PARTIES PRODUCED AN AGREEMENT ON A PRICE OF $104.50 PER UNIT.

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