B-173178, NOV 30, 1971

BID PROTEST - MISTAKE IN BID - DISPLACEMENT OF SUCCESSFUL BIDDER DECISION DENYING PROTEST BY SURPLUS TIRE SALES AGAINST AWARD OF A CONTRACT TO ALASKA PIPE AND SALVAGE CO., HIGH BIDDER ON A SALES INVITATION ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIF. BECAUSE PROTESTANT'S BID PRICE COULD NOT BE ASCERTAINED FROM THE BID ALONE WITHOUT RESORT TO EXTRANEOUS DOCUMENTS, CORRECTION COULD NOT BE PERMITTED, SINCE IT WOULD DISPLACE THE OTHERWISE SUCCESSFUL BIDDER. THE IFB SOLICITED BIDS ON A UNIT PRICE BASIS WHICH DIFFERED FROM PROTESTANT'S EXTENDED TOTAL PRICE, BUT BECAUSE THE SOLICITATION CONTAINED NO PROVISION THAT IN THE EVENT OF A DISCREPANCY THE UNIT PRICE WOULD CONTROL, NEITHER COULD BE GIVEN PREFERENCE. FINALLY, THIS IS NOT AN IMMATERIAL OR MINOR INFORMALITY, FOR IT AFFECTS PRICE AND A CORRECTION WOULD BE PREJUDICIAL TO ANOTHER BIDDER. ACCORDINGLY, THE PROTEST IS DENIED.

TO SURPLUS TIRE SALES:

REFERENCE IS MADE TO YOUR LETTERS OF AUGUST 26 AND SEPTEMBER 3, 1971, REQUESTING RECONSIDERATION OF OUR DECISION OF AUGUST 20, 1971, WHEREIN WE DENIED YOUR REQUEST FOR CORRECTION OF YOUR BID ON ITEM 2 UNDER SALES INVITATION NO. 46-1096, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA. RECEIPT IS ALSO ACKNOWLEDGED OF YOUR LETTER OF OCTOBER 9, 1971.

IN OUR DECISION OF AUGUST 20, 1971, WE HELD THAT SINCE YOUR BID PRICE FOR ITEM 2 COULD NOT BE ASCERTAINED FROM THE BID FORM ALONE, WITHOUT RESORT TO EXTRANEOUS DOCUMENTS, CORRECTION COULD NOT BE PERMITTED, SINCE TO ALLOW SUCH CORRECTION WOULD RESULT IN THE DISPLACEMENT OF THE OSTENSIBLY SUCCESSFUL BIDDER.

IN YOUR REQUEST FOR RECONSIDERATION, YOU CONTEND THAT ALTHOUGH THERE WAS A DISCREPANCY BETWEEN YOUR UNIT PRICE AND YOUR TOTAL PRICE FOR ITEM 2, THE CONTRACTING OFFICER SHOULD HAVE IGNORED YOUR TOTAL PRICE AND MADE AN AWARD TO YOU ON ITEM 2 ON THE BASIS OF YOUR UNIT PRICE FOR THAT ITEM. SUPPORT OF THAT POSITION, YOU REFER TO THE FOLLOWING LEGEND APPEARING ON PAGE 26 OF THE IFB:

"WHEN BIDS ARE SOLICITED BY UNITS OF EACH, FOOT, POUND, ETC., ENTER A PRICE PER UNIT IN THE 'UNIT PRICE BID' COLUMN AND EXTEND THE TOTAL TO THE 'TOTAL PRICE BID' COLUMN. *** "

YOU CONTEND THAT IT IS EVIDENT FROM THE ABOVE QUOTED-CLAUSE THAT THE TERMS OF THE IFB SOLICITED UNIT BID PRICES AND THAT, THEREFORE, THE UNIT PRICE IS CONTROLLING IN THE EVENT OF A DISPARITY BETWEEN THE UNIT AND EXTENDED PRICES. YOU MAINTAIN THAT SINCE YOUR BID OF $56.65 FOR ITEM 2 WAS SUBMITTED ON A UNIT PRICE PER GROSS TON AS REQUIRED BY THE ABOVE- QUOTED CLAUSE OF THE IFB, YOUR BID ON ITEM 2 WAS RESPONSIVE TO THE IFB; THAT ITEM 2 SHOULD HAVE BEEN AWARDED TO YOUR FIRM ON THE BASIS OF THE UNIT PRICE; AND THAT SINCE THE SALES TERMS REQUIRED THAT A BID BE BASED UPON A UNIT PRICE BASIS, THE CONTRACTING OFFICER HAD NO DISCRETION TO DISREGARD THE UNIT PRICE QUOTED BY YOU FOR ITEM 2. YOU STATE THAT THE FACT THAT YOUR EXTENDED TOTAL PRICE FOR ITEM 2 DID NOT AGREE WITH THE UNIT PRICE INSERTED BY YOU FOR THAT ITEM IS IMMATERIAL AND THAT SINCE IT WOULD HAVE BEEN IN THE INTERESTS OF THE GOVERNMENT TO ACCEPT YOUR UNIT PRICE OF $56.65 FOR ITEM 2, THE CONTRACTING OFFICER WAS REQUIRED BY DEFENSE SUPPLY AGENCY MANUAL 4160.1 TO TREAT THE MISTAKE IN YOUR EXTENDED TOTAL PRICE FOR ITEM 2 AS A MINOR DEFECT IN YOUR BID.

REGARDING THE IFB CLAUSE CITED BY YOU IN SUPPORT OF YOUR POSITION THAT THE UNIT PRICE WAS THE CONTROLLING PRICE IN MAKING AN AWARD, IT IS NOTED THAT SUCH CLAUSE REQUESTS ONLY THAT THE BIDDER ENTER BOTH THE UNIT PRICE AND THE EXTENDED TOTAL PRICE. THE SUBJECT IFB DOES NOT CONTAIN A PROVISION THAT IN THE EVENT OF A DISCREPANCY BETWEEN UNIT AND EXTENSION PRICES, THE UNIT PRICE WILL CONTROL. IN THE ABSENCE OF SUCH A PROVISION, AS WE STATED IN OUR AUGUST 20 DECISION, WE BELIEVE THAT NEITHER PRICE MAY BE GIVEN ANY PREFERENCE. IN REGARD TO SUCH A PREFERENCE PROVISION, THE DEFENSE SUPPLY AGENCY STATES THAT THE CONSIDERATION OF BIDS PROVISION APPEARING IN DEFENSE LOGISTICS SERVICES CENTER FORM 436 (REV.), MARCH 1969, ENTITLED SALE BY REFERENCE, WAS REVISED TO ELIMINATE THE LANGUAGE WHICH PREVIOUSLY HAD PURPORTED TO RESOLVE A DISCREPANCY BETWEEN THE UNIT AND TOTAL PRICES IN FAVOR OF THE UNIT PRICE.

IN YOUR LETTER OF OCTOBER 9, 1971, YOU CONTEND THAT THE FACTS IN THE CASE COVERED BY OUR DECISION OF OCTOBER 1, 1971, B-173163, ARE SIMILAR TO THOSE IN THE PRESENT CASE AND THAT SUCH DECISION SHOULD BE FOLLOWED IN RESOLVING THIS CASE. THE FACTS IN THE PRESENT CASE ARE DISTINGUISHABLE FROM THOSE IN THE CASE COVERED BY OUR DECISION B 173163. IN B-173163 BIDS ON THE ITEM IN QUESTION WERE TO BE SUBMITTED ON A LOT BASIS AND THE INVITATION CONTAINED A CLEAR DIRECTION THAT IF A BID CONTAINED A UNIT BID PRICE AND A LOT PRICE, THE UNIT BID PRICE WOULD NOT BE CONSIDERED. IN THE PRESENT CASE, THE INVITATION REQUESTED BIDDERS TO SUBMIT A UNIT BID PRICE AND A TOTAL PRICE FOR THE ITEM IN QUESTION AND, AS INDICATED ABOVE, THE INVITATION DID NOT CONTAIN A CLEAR DIRECTION AS TO WHETHER UNIT OR TOTAL PRICES WERE TO TAKE PRECEDENCE WHERE A DISCREPANCY EXISTED.

THE PROVISIONS OF DEFENSE SUPPLY AGENCY MANUAL 4160.1, WHICH YOU STATE REQUIRE "THE CONTRACTING OFFICER TO CURE MINOR DEFECTS IN THE BID IF THE CURE WILL BE IN THE BEST INTEREST OF THE GOVERNMENT," HAVE BEEN UPDATED AND REDESIGNATED AS DEPARTMENT OF DEFENSE MANUAL 4160.21-M (ENTITLED DEFENSE DISPOSAL MANUAL). PART 3, CHAPTER VIII, PARAGRAPH C.6.B OF THAT MANUAL PROVIDES AS FOLLOWS:

"MINOR INFORMALITIES OR IRREGULARITIES DO NOT RENDER A BID NONRESPONSIVE. A MINOR INFORMALITY OR IRREGULARITY IS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATIONS FOR BIDS, NOT AFFECTING THE PRICE, QUALITY, QUANTITY OR DELIVERY OF THE ARTICLE AND THE CORRECTION OR WAIVER WOULD NOT BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. THE SCO WILL EITHER GIVE THE BIDDER AN OPPORTUNITY TO CURE ANY SUCH DEFICIENCY RESULTING FROM A MINOR INFORMALITY OR IRREGULARITY IN A BID OR WAIVE ANY SUCH DEFICIENCY WHERE IT IS TO THE ADVANTAGE OF THE GOVERNMENT."

ACCORDING TO THE ABOVE-QUOTED PARAGRAPH, THE SALES CONTRACTING OFFICER MAY CORRECT OR WAIVE A MINOR INFORMALITY OR IRREGULARITY IN A BID, BUT ONLY IF THE CORRECTION OR WAIVER WOULD NOT BE PREJUDICIAL TO THE RIGHTS OF OTHER BIDDERS. IN THE PRESENT CASE IF THE CONTRACTING OFFICER HAD CORRECTED YOUR EXTENDED TOTAL PRICE FOR ITEM 2 YOUR BID WOULD HAVE DISPLACED THE HIGH BID OF ALASKA PIPE AND SALVAGE CO., TO WHOM AWARD WAS MADE. THEREFORE, SINCE THE REQUESTED CORRECTION OF YOUR BID WOULD HAVE BEEN PREJUDICIAL TO ONE OF THE BIDDERS, THE CONTRACTING OFFICER COULD NOT HAVE MADE SUCH CORRECTION UNDER THE AUTHORITY OF THE QUOTED PARAGRAPH.

UNDER THE CIRCUMSTANCES, WHILE IT IS OBVIOUS THAT THERE WAS A MISTAKE IN EITHER THE UNIT PRICE OR THE EXTENDED PRICE OF YOUR BID, WE MUST CONCLUDE THAT THE BID AS SUBMITTED DID NOT INDICATE WHICH OF THE CONFLICTING PRICES REPRESENTED YOUR INTENDED BID PRICE. WHILE YOU MAINTAIN THAT THE BEST INTERESTS OF THE GOVERNMENT WOULD HAVE BEEN SERVED BY ACCEPTANCE OF YOUR HIGHER BID IT IS OUR VIEW THAT THE HARM TO THE COMPETITIVE BIDDING SYSTEM BY SUCH ACCEPTANCE WOULD HAVE FAR OFFSET ANY PECUNIARY ADVANTAGE GAINED THEREBY. AS WE STATED IN 48 COMP. GEN. 748, 750 (1969), REGARDLESS OF THE GOOD FAITH OF THE BIDDER MAKING A MISTAKE, CORRECTION SHOULD BE DENIED IN ANY CASE IN WHICH THERE EXISTS A REASONABLE BASIS FOR ARGUMENT THAT PUBLIC CONFIDENCE IN THE INTEGRITY OF THE COMPETITIVE BIDDING SYSTEM WOULD BE ADVERSELY AFFECTED THEREBY.

ACCORDINGLY, WE FIND NO BASIS TO MODIFY THE CONCLUSION REACHED IN OUR DECISION OF AUGUST 20, 1971.