B-183599, MAY 8, 1975

B-183599, MAY 8, 1975

CLEANING SERVICES CONTRACTOR, WHO ALLEGED $35,930.54 ERROR IN BID AFTER AWARD AFTER HAVING VERIFIED $123,884 BID TWICE BEFORE AWARD AND HAVING INDICATED THAT BID WAS LOW IN ORDER TO HAVE OPPORTUNITY TO EXPAND OPERATIONS INTO AREA OF PERFORMANCE, HAS NO LEGAL BASIS FOR RESCISSION OF CONTRACT, SINCE CONTRACT IS NOT UNCONSCIONABLE AND GOVERNMENT IS NOT "OBVIOUSLY GETTING SOMETHING FOR NOTHING."

PARK SERVICES, INC.:

INVITATION FOR BIDS (IFB) NO. DACW56-75-B-0024 WAS ISSUED ON NOVEMBER 19, 1974, BY THE UNITED STATES ARMY CORPS OF ENGINEERS, TULSA DISTRICT, TULSA, OKLAHOMA, FOR CLEANING SERVICES AT DENISON DAM, LAKE TEXEMA, OKLAHOMA AND TEXAS.

THE BIDS WERE OPENED ON DECEMBER 18, 1974. THE LOW BID IN THE AMOUNT OF $104,900 WAS REJECTED AS NONRESPONSIVE BY REASON OF AN AMBIGUITY. THE NEXT LOW BIDDER, PARK SERVICES, INC. (PARK), BID $123,884. THE REMAINING BIDS RANGED FROM $172,626.00 TO $349,255.90. BECAUSE PARK'S BID WAS $48,742 BELOW THE BID IMMEDIATELY ABOVE IT, A REPRESENTATIVE OF THE TULSA DISTRICT OFFICE'S PROCUREMENT AND SUPPLY DIVISION TELEPHONED PARK'S PRESDIENT, ADVISED HIM OF THE DISPARITY IN BIDS AND REQUESTED THAT THE BID BE REVIEWED FOR A POSSIBLE MISTAKE. PARK'S PRESIDENT INITIALLY STATED THAT HE WAS WILLING TO BID SOMEWHAT LOW SO THAT HE MIGHT HAVE AN OPPORTUNITY TO EXPAND HIS OPERATIONS INTO THE TULSA DISTRICT, BUT HE ALSO AGREED TO CHECK HIS BID AND CONFIRM IT IN WRITING. BY LETTER DATED DECEMBER 20, 1974, PARK VERIFIED THE BID AS SUBMITTED. ALSO, ON JANUARY 2, 1975, WHEN THE PRESIDENT OF PARK AND HIS BROTHER WERE AT THE PROJECT, THEY INDICATED TO THE RESIDENT ENGINEER, DENISON DAM, THAT THEY WOULD PERFORM IN ACCORDANCE WITH THE SPECIFICATIONS FOR THE AMOUNT BID. PARK'S RESPONSIBILITY WAS REVIEWED AND THE FIRM WAS AWARDED CONTRACT NO. DACW56- 75-C-0079 ON JANAUARY 3, 1975.

BY LETTER DATED JANUARY 13, 1975, PARK ALLEGED TWO MISTAKES IN ITS BID AND REQUESTED RESCISSION OF THE CONTRACT. PARK STATED THAT IT HAD CALCULATED ITS TRASH DUMPING COSTS AT $100 PER DAY, BUT THAT IN TRANSFERRING THE FIGURES FROM ITS NOTES TO THE WORKSHEET THE FIGURE WAS INADVERTENTLY LISTED AS $10 PER DAY. THIS RESULTED IN A $23,400 ERROR. THE SECOND ERROR DEVELOPED FROM PARK'S MISCALCULATION OF THE NUMBER OF ROLLS OF TOILET TISSUE THAT THE CONTRACT REQUIRED. THIS RESULTED IN AN ERROR OF $12,530.54.

PARK PERFORMED THE WORK REQUIRED BY THE CONTRACT THROUGH MARCH 31, 1975, THROUGH AN ARRANGEMENT WITH A SUBCONTRACTOR, AND WAS PAID $8,435 PER MONTH FOR THE SERVICES PERFORMED. PARK HAS STOPPED PERFORMING AND IS BEING TERMINATED FOR DEFAULT PENDING A DECISION BY OUR OFFICE AS TO WHETHER THE BALANCE OF THE CONTRACT SHOULD BE RESCINDED. BOTH THE ACTING GENERAL COUNSEL, OFFICE OF THE CHIEF OF ENGINEERS, AND THE CONTRACTING OFFICER RECOMMEND RESCISSION ALLEGING THAT THE CONTRACT IS UNCONSCIONABLE.

THE GENERAL RULE WITH REGARD TO MISTAKES ALLEGED AFTER THE AWARD OF A CONTRACT IS THAT THE BIDDER MUST BEAR THE CONSEQUENCE OF ITS UNILATERAL MISTAKE UNLESS THE CONTRACTING OFFICER KNEW OR SHOULD HAVE KNOWN OF THE MISTAKE AT THE TIME THE BID WAS ACCEPTED. SEE MATTER OF TITAN ENVIRONMENTAL CONSTRUCTION SYSTEMS, INC., B-180329, OCTOBER 1, 1974. WHERE THE CONTRACTING OFFICER IS ON NOTICE OF A POSSIBLE MISTAKE IN BID HE IS REQUIRED BY ARMED SERVICES PROCUREMENT REGULATION SEC. 2-406 (1974 ED.) TO REQUEST A VERIFICATION FROM THE BIDDER. IN THIS CASE, IT IS NOT DISPUTED THAT THE CONTRACTING OFFICER ADEQUATELY REQUESTED, AND PARK GAVE, A BID VERIFICATION.

WHEN A BIDDER IS ASKED TO AND DOES VERIFY ITS BID, GENERALLY THE SUBSEQUENT ACCEPTANCE OF THE BID CREATES A BIDNING CONTRACT. SEE MATTER OF GENERAL TIME CORPORATION, B-180613, JULY 5, 1974. HOWEVER, WHERE THE GOVERNMENT IS "OBVIOUSLY GETTING SOMETHING FOR NOTHING" (SEE KEMP V. UNITED STATES, 38 F. SUPP. 568 (D. MD. 1941) AND MATTER OF YANKEE ENGINEERING COMPANY, INC., B-180573, JUNE 19, 1974) OR WHERE THE ACCEPTANCE OF THE BID HAS RESULTED IN AN UNCONSCIONABLE CONTRACT (SEE B 150382, FEBRUARY 20, 1963, AND B-170691, JANUARY 28, 1971), OUR OFFICE HAS GRANTED RELIEF NOTWITHSTANDING VERIFICATION BY THE BIDDER PRIOR TO AWARD.

HERE THE CONTRACT PRICE IS $123,884 AND THE ALLEGED ERROR WOULD MAKE A DIFFERENCE OF $35,930.54. THE CONTRACTING OFFICER HAD A REASONABLE BASIS FOR CONCLUDING AFTER VERIFICATION THAT THE BID WAS CORRECT, SINCE PARK, AN EXPERIENCED CLEANING SERVICES CONTRACTOR, WHEN REQUESTED TO REVIEW ITS BID FOR ERROR RESPONDED THAT IT BID LOW DELIBERATELY IN ORDER TO BE ABLE TO EXPAND ITS OPERATION INTO THE AREA OF PERFORMANCE. THEREFORE, WE DO NOT BELIEVE THAT THERE EXIST CIRCUMSTANCES SO EXTREME AS TO AMOUNT TO AN UNCONSCIONABLY PRICED CONTRACT OR THE GOVERNMENT'S "OBVIOUSLY GETTING SOMETHING FOR NOTHING." MATTER OF AEROSPACE AMERICA, INC., B-181439, JULY 16, 1974, AND MATTER OF PORTA-KAMP MANUFACTURING COMPANY, INC., B-180679, DECEMBER 31, 1974. ACCORDINGLY, THERE IS NO LEGAL BASIS FOR OUR OFFICE TO AUTHORIZE RESCISSION OF THE CONTRACT.