B-167821, DEC. 29, 1969

B-167821, DEC. 29, 1969

MISTAKES--ALLEGATION AFTER AWARD--CONTRACTING OFFICER'S ERROR DETECTION DUTY--NOTICE OF ERROR WHERE THERE IS NOTHING ON FACE OF BID TO INDICATE POSSIBILITY OF ERROR AND NO SIGNIFICANT PRICE DIFFERENTIAL WAS PRESENT, NEXT LOWEST BID BEING ONLY 3 PERCENT HIGHER THAN LOW BID, CONTRACTING OFFICER COULD NOT HAVE KNOWN OR BEEN AWARE OF POSSIBILITY OF ERROR EVEN IF DETAILED ANALYSIS OF BIDS, INCLUDING CONSIDERATION OF FACTORS SUCH AS PRICES QUOTED BY OTHER BIDDERS, PRICE PAID BY GOVERNMENT FOR SIMILAR SUPPLIES UNDER PREVIOUS CONTRACT, GOVT.'S COST ESTIMATE AND KNOWN VALUE OF SUPPLIES, HAD BEEN MADE. ACCORDINGLY, PREVIOUS DECISIONS DENYING REQUEST FOR RELIEF FROM ALLEGED MISTAKE IN BID ARE AFFIRMED. SEE 39 COMP. GEN. 405 (1959).

TO MAJESTIC PLUMBING & HEATING SUPPLY CORP.:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 18, 1969, REQUESTING RECONSIDERATION OF OUR DECISIONS DATED OCTOBER 22 AND NOVEMBER 14, 1969, WHICH DENIED YOUR REQUEST FOR RELIEF FROM AN ALLEGED MISTAKE IN YOUR BID UNDER GENERAL SERVICES ADMINISTRATION CONTRACT NO. GS-02S 6635.

IN YOUR CURRENT LETTER, YOU REFER TO THE FOLLOWING STATEMENTS MADE ON PAGES 1 AND 2 OF OUR DECISION OF NOVEMBER 14, 1969:

"* * * A DETAILED ANALYSIS OF ALL BIDS, AS SUCH, WAS NOT PREPARED BY THE CONTRACTING OFFICER AND NONE WAS REQUIRED. * * * THE CONTRACTING OFFICER DID ALL THAT WAS REQUIRED OF HIM WHEN HE EXAMINED YOUR UNIT BID PRICES AGAINST THE OTHERS SUBMITTED * * *." IN ONE STATEMENT WE SAY THAT THE CONTRACTING OFFICER DID EXAMINE THE BIDS AND IN THE OTHER STATEMENT THAT HE DID NOT MAKE A DETAILED ANALYSIS.

THE ABOVE-QUOTED STATEMENTS ARE NOT CONTRADICTORY SINCE AN EXAMINATION OF THE BIDS IS BUT ONE OF THE FIRST STEPS TAKEN AFTER BIDS ARE OPENED AND IS PRELIMINARY TO A DETAILED ANALYSIS OF BIDS IF SUCH ANALYSIS IS DEEMED NECESSARY. YOU ASK: "IN WHAT WAY DID HE (CONTRACTING OFFICER) EXAMINE OUR UNIT BID PRICES AGAINST THE OTHERS?" THE RECORD INDICATES THAT THE CONTRACTING OFFICER EXAMINED EACH BID FOR OBVIOUS CLERICAL MISTAKES AND THEN MATHEMATICALLY COMPARED THE PRICES SHOWN ON THE ABSTRACT OF BIDS TO ASCERTAIN THE IDENTITY OF THE LOW BIDDER. WE DO NOT BELIEVE THAT THE CONTRACTING OFFICER WAS REQUIRED, IN THE LIGHT OF THE INFORMATION REVEALED BY THE BID ABSTRACT, TO MAKE A DETAILED ANALYSIS WHICH WOULD HAVE INDICATED THE PERCENTAGE DIFFERENCE BETWEEN EACH OF THE BIDS RECEIVED. HOWEVER, IF SUCH A DETAILED ANALYSIS WERE MADE, THE RESULTS WOULD NOT HAVE INDICATED SUCH PRICE DIFFERENCES AS WOULD HAVE RAISED AN INFERENCE OF POSSIBILITY OF ERROR.

YOU ALSO REFER TO THE FOLLOWING STATEMENT APPEARING ON PAGE 2 OF OUR DECISION OF NOVEMBER 14, 1969, AND INQUIRE IN THAT CONNECTION:

"* * * WE KNOW OF NO REQUIREMENT THAT THE CONTRACTING OFFICER VERIFY EACH UNIT PRICE FIGURE WITH THE BIDDER IF NOTHING APPEARS ON THE FACE OF THE BID OR ABSTRACT OF BIDS WHICH CREATES A DOUBT AS TO THE CORRECTNESS OF THE UNIT PRICE. * * *"

"* * * THE ONLY MANNER IN WHICH DOUBT COULD ARISE IN THE MIND OF THE CONTRACTING OFFICER WOULD BE FOR HIM TO STUDY THE PRICES BID. YOU IMPLY THAT IGNORANCE BY THE CONTRACTING OFFICER WILL BIND THE BIDDER. IF THE ERROR DOES NOT 'APPEAR' TO HIM, THERE IS A BINDING CONTRACT. IF THE ERROR HAD BEEN ONE WHERE THE SECOND LOWEST BIDDER'S PRICE WAS TWICE THE LOW BIDDER, WOULD THAT APPEAR TO THE CONTRACTING OFFICER? HOW MUCH OF A DIFFERENCE IN PRICE MUST EXIST BEFORE IT 'APPEARS' TO THE CONTRACTING OFFICER? YOUR CONTENTION IS THAT ONLY WHAT IS, IN FACT, IN THE MIND OF THE CONTRACTING OFFICER IS RELEVANT, WHEREAS WE BELIEVE THAT THE PROPER CONSTRUCTION OF THE RULES IS THAT OF WHAT SHOULD BE IN HIS MIND. IN THIS CASE, IT APPEARS THAT ANY EXAMINATION PERFORMED BY THE CONTRACTING OFFICER WAS INADEQUATE AND THAT IT IS REASONABLE TO EXPECT THAT AN ERROR AS CLEAR AS THE ONE MADE BY US, SHOULD HAVE BEEN KNOWN BY HIM."

OUR OFFICE HAS NEVER ADOPTED OR FOLLOWED ANY PERCENTAGE FORMULA FOR USE IN DETERMINING WHETHER A PARTICULAR SPREAD IN BID PRICES WOULD CONSTITUTE CONSTRUCTIVE NOTICE OF PROBABLE ERROR. EACH CASE MUST BE DETERMINED ON THE BASIS OF THE PARTICULAR FACTS AND CIRCUMSTANCES ATTENDANT THERETO. FACTORS SUCH AS THE PRICES QUOTED BY OTHER BIDDERS, THE PRICE PAID BY THE GOVERNMENT FOR SIMILAR SUPPLIES UNDER A PREVIOUS CONTRACT, THE GOVERNMENT'S COST ESTIMATE, AND THE KNOWN VALUE OF THE SUPPLIES HAVE BEEN CONSIDERED TO BE RELEVANT TO A DETERMINATION WHETHER A CONTRACTING OFFICER SHOULD HAVE REQUESTED A VERIFICATION OF A BID PRIOR TO ITS ACCEPTANCE.

IN REGARD TO YOUR QUESTION AS TO WHETHER THE CONTRACTING OFFICER WOULD HAVE BEEN CHARGED WITH CONSTRUCTIVE NOTICE OF A PROBABLE ERROR IN YOUR BID IF THE AMOUNT OF THE NEXT LOWEST BID WAS TWICE THE AMOUNT OF YOUR BID, WE WOULD HAVE CONCLUDED THAT THE CONTRACTING OFFICER WOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF SUCH AN ERROR IN BID. HOWEVER, SUCH A SIGNIFICANT PRICE DIFFERENTIAL WAS NOT PRESENT HERE WHERE THE NEXT LOWEST BID WAS ONLY APPROXIMATELY 3 PERCENT HIGHER THAN YOUR BID. IN ORDER THAT YOU MAY BE MORE FULLY ADVISED AS TO OUR LEGAL POSITION IN THIS AREA OF ERRORS IN BID ALLEGED AFTER AWARD, THERE IS ENCLOSED A COPY OF OUR DECISION REPORTED AT 39 COMP. GEN. 405 (1959).

ACCORDINGLY, UPON REVIEW, OUR DECISIONS OF OCTOBER 22 AND NOVEMBER 14, 1969, ARE AFFIRMED.