B-182700, DEC 23, 1974, 54 COMP GEN 507

B-182700: Dec 23, 1974

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CONTRACTS - MISTAKES - CONTRACTING OFFICER'S ERROR DETECTION DUTY - NOTICE OF ERROR - LACKING CONTRACTOR'S CLAIM FOR CORRECTION OF CONTRACT PRICE TO INCLUDE NURSE CALL/PA/INTERCOM COST IS DENIED. SINCE CONTRACTING OFFICER DID NOT HAVE ACTUAL OR CONSTRUCTIVE NOTICE OF POSSIBLE ERROR PRIOR TO AWARD IN ONLY BID RECEIVED. AS BID PRICE WAS CONSIDERED REASONABLE ALTHOUGH CONSIDERABLY HIGHER THAN GOVERNMENT ESTIMATE. HAS REQUESTED AN INCREASE IN ITS CONTRACT PRICE IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF VETERANS ADMINISTRATION (VA) CONTRACT NO. THE BID SUBMITTED BY VEE SEE WAS THE ONLY ONE RECEIVED AND AWARD WAS MADE TO THAT FIRM ON JUNE 21. THE GOVERNMENT'S ESTIMATE FOR THE COST OF THE WORK WAS BETWEEN $10.

B-182700, DEC 23, 1974, 54 COMP GEN 507

CONTRACTS - MISTAKES - CONTRACTING OFFICER'S ERROR DETECTION DUTY - NOTICE OF ERROR - LACKING CONTRACTOR'S CLAIM FOR CORRECTION OF CONTRACT PRICE TO INCLUDE NURSE CALL/PA/INTERCOM COST IS DENIED, SINCE CONTRACTING OFFICER DID NOT HAVE ACTUAL OR CONSTRUCTIVE NOTICE OF POSSIBLE ERROR PRIOR TO AWARD IN ONLY BID RECEIVED, AS BID PRICE WAS CONSIDERED REASONABLE ALTHOUGH CONSIDERABLY HIGHER THAN GOVERNMENT ESTIMATE, AND ENGINEERING SERVICE RECOMMENDED THAT AWARD BE MADE.

IN THE MATTER OF VEE SEE CONSTRUCTION COMPANY, INC., DECEMBER 23, 1974:

VEE SEE CONSTRUCTION COMPANY, INC. (VEE SEE), HAS REQUESTED AN INCREASE IN ITS CONTRACT PRICE IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF VETERANS ADMINISTRATION (VA) CONTRACT NO. V537C-891, DATED JUNE 21, 1974.

INVITATION FOR BIDS (IFB) NO. 537-106-74 SOLICITED BIDS FOR THE FURNISHING OF ALL NECESSARY LABOR, MATERIAL, AND EQUIPMENT FOR THE REMODELING OF THE NURSING STATIONS AT THE VA (WEST SIDE) HOSPITAL, CHICAGO, ILLINOIS. THE BID SUBMITTED BY VEE SEE WAS THE ONLY ONE RECEIVED AND AWARD WAS MADE TO THAT FIRM ON JUNE 21, 1974, FOR THE REMODELING WORK AT ITS LUMP SUM PRICE OF $52,000. THE GOVERNMENT'S ESTIMATE FOR THE COST OF THE WORK WAS BETWEEN $10,000 AND $25,000.

BY LETTER DATED JULY 19, 1974, VEE SEE NOTIFIED THE CONTRACTING OFFICER THAT THERE WAS AN OMISSION IN ITS BID IN THAT THE AMOUNT BID DID NOT INCLUDE THE PRICE FOR SECTION XIV, NURSE CALL/PA/INTERCOM. IN SUPPORT OF THE ALLEGATION, VEE SEE SUBMITTED ITS ORIGINAL WORKSHEET. THE CLAIM FOR CORRECTION WAS SUBMITTED TO OUR OFFICE BY THE VA FOR DETERMINATION.

WHERE A BIDDER OR OFFEROR HAS MADE A MISTAKE IN ITS BID OR OFFER THAT WAS NOT INDUCED OR SHARED BY THE GOVERNMENT, THE BIDDER OR OFFEROR MUST BEAR THE CONSEQUENCES OF ITS MISTAKE, UNLESS THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. SALIGMAN V. UNITED STATES, 56 F. SUPP. 505 (E.D. PA. 1944); CHERNICK V. UNITED STATES, 372 F.2D 492, 178 CT. CL. 498 (1967); 48 COMP. GEN. 672 (1969). ADDITION, WE HAVE FOUND THAT WHERE ONLY ONE BID OR OFFER IS RECEIVED, THERE IS NO BASIS FOR COMPARISON TO OTHER BIDS SO THAT THERE IS NORMALLY NOTHING TO PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF A MISTAKE. 26 COMP. GEN. 415 (1946); MATTER OF THE MURPHY ELEVATOR COMPANY, INC., B-180607, APRIL 2, 1974; B-175760, JUNE 19, 1972.

IN THIS REGARD, CONTRACTORS WILL NATURALLY SEEK TO IMPOSE UPON CONTRACTING OFFICIALS A RATHER HIGH LEVEL OF RESPONSIBILITY FOR ERROR DETECTION - HOWEVER, THE TEST IS ONE OF REASONABLENESS, WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE PARTICULAR CASE THERE WERE ANY FACTORS WHICH REASONABLY COULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF THE CONTRACTING OFFICER. WENDER PRESSES V. UNITED STATES, 343 F.2D 961, 170 CT. CL. 483 (1965); B-176772, MAY 23, 1973.

THE POSITION OF OUR OFFICE IS THAT THE CONTRACTING OFFICER IS NOT NORMALLY REQUIRED TO MAKE A DETAILED ANALYSIS OR BREAKDOWN OF A CONTRACTOR'S BID, BUT ONLY TO NOTE ANY DISCREPANCIES BETWEEN THE OFFERED PRICE AND A REASONABLE PRICE. B-167795, MARCH 16, 1970. ESPECIALLY IS THIS THE TEST TO BE APPLIED IN A SITUATION AS EXISTED HERE WHERE ONLY ONE BID IS RECEIVED, THERE ARE NO OTHER BIDS WHICH CAN BE USED FOR COMPARISON OF PRICES, AND THE BID PRICE RATHER THAN BEING CONSIDERABLY LOWER THAN THE GOVERNMENT'S ESTIMATE IS CONSIDERABLY HIGHER.

THERE IS NOTHING IN THE RECORD TO SUPPORT A CONCLUSION THAT THE PRICE OF $52,000 SUBMITTED BY VEE SEE WAS UNREASONABLE, ALBEIT HIGHER THAN THE GOVERNMENT'S ESTIMATE. MOREOVER, PARAGRAPH 6 OF THE CONTRACTING OFFICER'S OCTOBER 10, 1974, LETTER STATES THAT:

*** AND WE WERE NOT PUT ON CONSTRUCTIVE NOTICE OF THE MISTAKE BEFORE THE AWARD SINCE ONLY ONE BID WAS RECEIVED AND OUR ENGINEERING SERVICE REQUESTED THAT AWARD BE MADE TO THE ONLY BIDDER, VEE SEE CONSTRUCTION CO., INC., AT A COST OF $52,000.00

AT THE TIME OF ACCEPTANCE OF VEE SEE'S BID, THE CONTRACTING OFFICER HAD RECEIVED NO NOTICE OR CLAIM OF ERROR AND, IN VIEW OF THE CIRCUMSTANCES DISCUSSED ABOVE, WE ARE UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE LIKELIHOOD OF ERROR IN THE VEE SEE BID. THE ACCEPTANCE OF THE BID IN THESE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313 (1919), AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75 (1922).

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR INCREASING THE CONTRACT PRICE.

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