B-148117, MAR. 22, 1962

TO TURNER AND BREIVOGEL, INC.:

FURTHER REFERENCE IS MADE TO YOUR TELEGRAM AND LETTER DATED FEBRUARY 2, 1962, PROTESTING ACTION BY THE DEPARTMENT OF THE ARMY WHICH WOULD PERMIT JOSEPH HALPERN OF LONG ISLAND CITY, LONG ISLAND, NEW YORK, TO CORRECT HIS BID SUBMITTED IN RESPONSE TO INVITATION NO. CIVENG 30-075-62-20, ISSUED BY THE CORPS OF ENGINEERS, NEW YORK.

THE ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS AND LOGISTICS) HAS INFORMED US BY LETTER DATED MARCH 5, 1962, THAT THE DEPARTMENT OF THE ARMY HAS NOT AS YET MADE A DETERMINATION AS TO WHETHER TO PERMIT MR. JOSEPH HALPERN TO CORRECT HIS BID SINCE THE RESPONSIBILITY OF MR. HALPERN AS A CONTRACTOR MUST BE FIRST DETERMINED PRIOR TO THE CONSIDERATION OF THE ALLEGATION OF MISTAKE.

IN YOUR LETTER OF FEBRUARY 2, 1962, YOU STATE THAT IT IS YOUR OPINION THAT AWARDING OF THIS CONTRACT TO MR. HALPERN WOULD BE CONTRARY TO ACCEPTED PRACTICES IN YOUR INDUSTRY AND WOULD NOT BE IN THE INTEREST OF FAIR COMPETITION. YOU CONTEND THAT IT MIGHT CONCEIVABLY RESULT IN THE ESTABLISHMENT OF A PRECEDENT WHEREBY IN ALL FUTURE BIDS ON WORK OF THIS TYPE ANY CONTRACTOR MIGHT CONSIDER CUTTING HIS BID PRIOR TO SUBMITTING IT TO A GOVERNMENT AGENCY, HOPING IN THIS MANNER OF BECOMING THE LOW BIDDER, THEN CLAIM AN ERROR AND REQUESTING PERMISSION TO RAISE HIS BID, CITING THE ABOVE CASE IF ALLOWED. YOU STATE THAT IN VIEW OF THE FOREGOING, YOU BELIEVE THAT MR. HALPERN'S BID SHOULD NOT BE CONSIDERED THEREBY MAKING YOUR CORPORATION THE APPARENT LOW BIDDER.

IN REGARD TO MISTAKES IN BIDS ALLEGED AFTER OPENING AND PRIOR TO AWARD, EXCEPT THOSE OF A CLERICAL NATURE, PARAGRAPH 2-406.3 OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES, IN PERTINENT PART, THAT THE MILITARY DEPARTMENTS ARE AUTHORIZED TO PERMIT THE BIDDER TO CORRECT HIS BID UPON SUBMISSION OF CLEAR AND CONVINCING EVIDENCE ESTABLISHING BOTH THE EXISTENCE OF A MISTAKE AND THE BID ACTUALLY INTENDED. THE AUTHORITY TO MAKE SUCH CORRECTIONS WAS GRANTED UNDER AND IS MATERIALLY CONSISTENT WITH OUR OFFICE DECISION OF JUNE 29, 1954, B 120281.

THE GENERAL RULE IS THAT A BIDDER MAY NOT CHANGE HIS BID AFTER THE DATE OF OPENING TO THE PREJUDICE OF OTHER BIDDERS. NEVERTHELESS, THE STATUTES REQUIRING ADVERTISING FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. THEREFORE, IT HAS BEEN CONSISTENTLY HELD BY THE ACCOUNTING OFFICERS OF THE GOVERNMENT THAT WHERE A MISTAKE IS ALLEGED PROMPTLY AFTER OPENING AND THERE HAS BEEN IMMEDIATELY PRESENTED CONVINCING EVIDENCE SHOWING THAT A MISTAKE WAS MADE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THE INTERESTS OF THE UNITED STATES REQUIRE THAT THE BID BE CONSIDERED AS CORRECTED, IF SUCH CORRECTION WOULD NOT AFFECT THE RELATIVE STANDING OF OTHERS BIDDERS, SO THAT THE GOVERNMENT MAY HAVE THE BENEFIT OF THE CORRECTED BID. B-123562, MAY 10, 1955. OBVIOUSLY, THIS PRINCIPLE DOES NOT PREJUDICE OTHER BIDDERS SINCE ITS APPLICABILITY DEPENDS ON THE ESTABLISHMENT OF THE BID WHICH WOULD HAVE BEEN SUBMITTED FOR OPENING AT THE REQUIRED DATE BUT FOR THE MISTAKE; AND, CONSEQUENTLY, THE BIDDER GAINS NO ADVANTAGE FROM HIS KNOWLEDGE OF COMPETITIVE BIDS. IN SUCH A CASE WE DO NOT FEEL THAT A HIGHER BIDDER HAS ANY RIGHT TO INSIST UPON REJECTION OF A CLEARLY ESTABLISHED LOWER BID, TO THE DETRIMENT OF THE GOVERNMENT.

THE CASES IN WHICH A BIDDER HAS BEEN PERMITTED TO CORRECT HIS BID PRIOR TO AWARD HAVE BEEN RELATIVELY FEW IN NUMBER, AND THE ACTION HAS BEEN TAKEN ONLY WHERE THE EVIDENCE SUBMITTED ESTABLISHES BEYOND ALL DOUBT THE ACTUAL INTENTION OF THE BIDDER. SUCH ACTION IS IN LINE WITH THE DECISIONS OF THE COURTS WHICH HAVE ALLOWED ADDITIONAL COMPENSATION TO A LOW BID CONTRACTOR WHO, THOUGH REFUSED PERMISSION ADMINISTRATIVELY TO CORRECT HIS BID, HAS BEEN ABLE TO PRESENT SATISFACTORY PROOF THAT HIS BID WAS ERRONEOUS, TOGETHER WITH A CLEAR SHOWING AS TO WHAT HE INTENDED TO BID. EDMUND J. RAPPOLI COMPANY, INC. V. UNITED STATES, 98 CT.CL. 499.

THE FOREGOING PRINCIPLES ARE NOT OF RECENT DEVELOPMENT BUT HAVE BEEN FOLLOWED BY THE GENERAL ACCOUNTING OFFICE SINCE ITS CREATION BY THE BUDGET AND ACCOUNTING ACT, 1921, 42 STAT. 20, 23 (E.G. 2 COMP. GEN. 503) AND PRIOR TO 1921, THE COMPTROLLER OF THE TREASURY ESTABLISHED THE SAME GENERAL RULE. SEE, FOR EXAMPLE, 20 COMP. DEC. 728; 26 COMP. DEC. 286.

IF THE DEPARTMENT OF THE ARMY DETERMINES THAT MR. HALPERN IS A RESPONSIBLE CONTRACTOR AND DECIDES TO CONSIDER THE REQUEST OF MR. HALPERN FOR CORRECTION OF HIS BID, WE BELIEVE THAT IN CONSIDERING THE CASE THE DEPARTMENT WILL FOLLOW THE PRINCIPLES DEVELOPED BY OUR OFFICE.