B-157023, JUL. 29, 1965

B-157023, JUL. 29, 1965

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, BY LETTER OF JUNE 14, 1965, HAS REQUESTED OUR DECISION REGARDING A MISTAKE IN BID ALLEGED AFTER AWARD BY SCIENTIFIC PRODUCTS, DIVISION OF AMERICAN HOSPITAL SUPPLY CORPORATION, MINNEAPOLIS, MINNESOTA.

INVITATION FOR BIDS NO. 65-47 DATED APRIL 7, 1965, SOLICITED BIDS FOR ONE EACH COULTER MODEL F" COUNTER, TRANSISTORIZED, COMPLETE WITH COINCIDENCE CORRECTION PRINT OUT FOR THE MODEL "F" COUNTER WITH TWO NO. 33A2532 COULTER DILUTERS. ONLY TWO BIDS WERE RECEIVED AND WERE OPENED ON APRIL 28, 1965, ONE OF $5,950 BY THE MANUFACTURER, COULTER ELECTRONICS SALES AND SERVICE, AND SCIENTIFIC PRODUCTS' BID OF $4,550. THE GOVERNMENT'S ORIGINAL ESTIMATE OF COST WAS $4,780 BUT WAS AMENDED TO $5,500 PRIOR TO SOLICITATION OF BIDS.

ON MAY 3, 1965, PURCHASE ORDER NO. 5730 WAS ISSUED TO SCIENTIFIC PRODUCTS. ON MAY 12, 1965, THE COMPANY'S REPRESENTATIVE CALLED THE CONTRACTING OFFICE TO ADVISE THAT THERE WAS A MISTAKE IN ITS BID. LETTER DATED MAY 19, 1965, FROM THE COMPANY DISCLOSED THAT THE ERROR AROSE OVER ITS INABILITY TO SECURE THE CORRECT PRICE FOR THE COINCIDENCE CORRECTION PRINT OUT DEVICE AND THAT THIS UNIT WAS OVERLOOKED WHEN THE BID WAS FINALIZED. THE COST OF THIS DEVICE IS $4,550 TO $5,950, OR IF THE AMENDMENT CANNOT BE MADE THAT IT BE RELEASED FROM ITS CONTRACT. THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, RECOMMENDS THAT THE CONTRACT BE RESCINDED IN VIEW OF THE FACT THAT SINCE ONLY TWO BIDS WERE RECEIVED AND THERE WAS A DISPARITY OF $1,400 BETWEEN THEM, THE CONTRACTING OFFICE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF PROBABILITY OF ERROR. THE CONTRACTING OFFICER IN STATEMENT DATED JUNE 8, 1965, STATES THAT THE BID WAS NOT QUESTIONED BEFORE AWARD AS OCCASIONALLY IT HAD BEEN HIS EXPERIENCE THAT MANUFACTURERS OVERBID THEIR DISTRIBUTORS WHERE THERE WAS A FRANCHISE INVOLVED. IN VIEW, HOWEVER, OF THE VERIFICATION OF THE PRICE WITH OTHER DEALERS THE CONTRACTING OFFICER RECOMMENDS THAT THE CONTRACT PRICE BE CHANGED FROM $4,550 TO $5,950.

IN REGARD TO CORRECTION OF AN ALLEGED ERROR IN BID WE HAVE STATED THAT TO PERMIT CORRECTION EITHER PRIOR TO OR AFTER AWARD, A BIDDER MUST SUBMIT CLEAR AND CONVINCING EVIDENCE THAT AN ERROR HAS BEEN MADE, THE MANNER IN WHICH THE ERROR OCCURRED, AND THE INTENDED BID PRICE. 35 COMP. GEN. 279, 31 ID. 183; 23 ID. 596; 17 ID. 598.

WE HAVE REVIEWED THE VARIOUS DOCUMENTS SUBMITTED BY THE CONTRACTING OFFICER AND THE COMPANY AND ALTHOUGH THE BIDDER HAS FURNISHED EVIDENCE OF WHAT THE ACTUAL COST OF THE ADDITIONAL DEVICE REQUIRED FOR FULFILLING THE PROCUREMENT WAS, THE EVIDENCE IS INSUFFICIENT TO SHOW WHAT THE BID PRICE WOULD HAVE BEEN BUT FOR THE ERROR. THIS PRECLUDES CORRECTION OF THE BID OR AMENDMENT OF THE CONTRACT PRICE. ALTHOUGH THE CONTRACTING OFFICER HAS STATED THAT EXPERIENCE HAS SHOWN AN OVERBID BY A MANUFACTURER IS NOT UNCOMMON, WE THINK THAT SINCE THE LOW BID OF SCIENTIFIC PRODUCTS WAS APPROXIMATELY 25 PERCENT LOWER THAN BOTH THE BID OF THE MANUFACTURER AND THE GOVERNMENT'S ESTIMATE, WHICH WAS CLOSE TO THE ESTABLISHED PRICE, THE CONTRACTING OFFICER SHOULD HAVE BEEN PLACED ON NOTICE THAT THERE WAS AN ERROR IN THE BID.

ACCORDINGLY, SINCE THE RECORD REASONABLY ESTABLISHES THAT AN ERROR WAS MADE BY SCIENTIFIC PRODUCTS AND SINCE IT APPEARS THAT IT WOULD BE INEQUITABLE TO HOLD THE CONTRACTOR TO ITS ORIGINAL BID, THE CONTRACT MAYBE CANCELED WITHOUT LIABILITY AS RECOMMENDED BY THE DIRECTOR, SUPPLY MANAGEMENT SERVICE.