B-160336, NOV. 9, 1966

B-160336, NOV. 9, 1966

TO NELSON NAME PLATE COMPANY:

REFERENCE IS MADE TO YOUR REQUEST IN A LETTER DATED OCTOBER 19, 1966, ADDRESSED TO THE DEFENSE GENERAL SUPPLY CENTER (DGSC), RICHMOND, VIRGINIA, THAT YOUR CLAIM FOR AN INCREASE IN PRICE UNDER CONTRACT NO. DSA-400-67-C- 0291, BASED ON AN ALLEGED MISTAKE IN BID, BE FORWARDED TO OUR OFFICE FOR REVIEW. THE CLAIM IN QUESTION WAS PREVIOUSLY CONSIDERED BY THE DEFENSE SUPPLY AGENCY (DSA) UNDER PUBLIC LAW 85-804, APPROVED AUGUST 28, 1958, 50 U.S.C. 1431-1435, WHICH AUTHORIZES AMENDMENT OR MODIFICATION OF CONTRACTS TO FACILITATE THE NATIONAL DEFENSE. SINCE DENIALS OF CLAIMS UNDER THAT STATUTE ARE NOT SUBJECT TO REVIEW BY THIS OFFICE, OUR CONSIDERATION OF THE MATTER WILL BE PURSUANT TO OUR AUTHORITY TO CONSIDER MISTAKE IN BID CASES.

THE CONTRACT WAS AWARDED TO YOU ON JULY 14, 1966, ON THE BASIS OF YOUR LOW BID UNDER INVITATION FOR BIDS (IFB) NO. DSA-400-66-B-6611, ISSUED JUNE 6, 1966, BY THE DGSC FOR THE FURNISHING OF 70,000 IDENTIFICATION PLATES IN ACCORDANCE WITH MILITARY SPECIFICATION MIL-P 514C OF FEBRUARY 19, 1963, AND AMENDMENT 3 OF JULY 23, 1965, WITH CERTAIN DEVIATIONS AND OPTIONS. THE PROCUREMENT, THE FIRST OF ITS KIND PROCESSED BY THE DGSC, WAS INITIATED ON THE BASIS OF A REQUISITION IDENTIFIED AS MIPR 00249-6-011240- 65 (LA), ISSUED BY THE NAVY PURCHASING OFFICE, LOS ANGELES, CALIFORNIA, WHICH REFLECTED AN ESTIMATED TOTAL COST OF $20,000, OR A UNIT COST OF 28.5 CENTS.

UNDER THE TERMS OF THE IFB, THE PROCUREMENT WAS RESTRICTED TO SMALL BUSINESS CONCERNS, AND BIDS WERE REQUIRED TO BE SUBMITTED ON AN F.O.B. DESTINATION BASIS ONLY, FOUR SEPARATE DESTINATIONS BEING LISTED FOR DELIVERY OF VARYING QUANTITIES OF THE ITEM.

COPIES OF THE IFB WERE DISTRIBUTED TO 20 BIDDERS, BUT ONLY YOU AND STAFFORD MANUFACTURING COMPANY, INC. (STAFFORD), FOR BROOKLYN, NEW YORK, RESPONDED. ON JUNE 27, THE TWO BIDS WERE OPENED AS SCHEDULED. YOUR BID, QUOTING A UNIT PRICE OF 26 CENTS FOR DELIVERY TO ALL FOUR DESTINATIONS, WAS LOW. STAFFORD QUOTED A UNIT PRICE OF 39 CENTS FOR ALL FOUR DESTINATIONS BUT SPECIFIED THAT ITS BID WAS ALL OR NONE. IN VIEW OF THE CLOSENESS OF YOUR PRICE TO THE ESTIMATED PRICE ON THE MIPR AND ABSENT ANY PRIOR PRICE HISTORY AT THE DGSC FOR THE PROCUREMENT ITEM, TOGETHER WITH THE FACT THAT YOUR BID PRICES HAD ALWAYS BEEN CONSIDERED REASONABLE WHEREAS STAFFORD HAD BEEN CONSIDERED A HIGH BIDDER, THE CONTRACTING OFFICER ACCEPTED YOUR BID WITHOUT REQUESTING CONFIRMATION BY YOU.

ON AUGUST 2, MORE THAN TWO WEEKS AFTER THE AWARD, YOU NOTIFIED THE DGSC BY TELEPHONE AND BY LETTER THAT YOU HAD MADE A MATHEMATICAL MISTAKE IN COMPUTING YOUR BID AND HAD INTENDED TO QUOTE A UNIT PRICE OF 33 CENTS. YOU EXPLAINED YOUR MISTAKE AS FOLLOWS:

"IF YOU WILL REFER TO THE ATTACHED WORK SHEET (SALES DATA SHEET): OUR BID WAS FIGURED AS FOLLOWS:

MATERIAL TIMES SQUARE INCHES OF PART PLUS BASE (OUR OVERHEAD FIGURE) EQUALS TOTAL.

MATERIAL $ .76 PLUS $ .76 EQUALS $1.52/100 SQUARE INCH USE $1.50 TIMES 21 SQ. INCH

PART SIZE 3 1/2 BY 6 EQUALS 21 SQUARE INCH

OUR MISTAKE WAS IN MULTIPLYING:

METAL COSTS FOR 100 PARTS SHOULD HAVE BEEN: $31.50

WE USED: 24.50

ADDED TO BASE FIGURE

FOR THIS QUANTITY: SHOULD BE:

BASE $1.50 BASE $1.50

METAL 24.50 METAL 31.50

26.00 33.00

FOR 100 PARTS FOR 100 PARTS

OR $ .26/EACH OR $ .33/EACH"

ACCORDINGLY, YOU REQUESTED AN INCREASE OF 7 CENTS IN YOUR UNIT PRICE, WHICH WOULD BE EQUIVALENT TO $4,900 ON THE TOTAL QUANTITY OF 70,000 UNITS.

FOLLOWING THE RECEIPT OF YOUR ALLEGATION OF MISTAKE, THE DGSC INQUIRED OF THE REQUISITIONING ACTIVITY AS TO THE PRIOR PRICE HISTORY OF THE PROCUREMENT ITEM AND WAS ADVISED THAT RECENT CONTRACTS FOR QUANTITIES OF 30,000 UNITS AND 18,000 UNITS HAD BEEN AWARDED AT UNIT PRICES OF 27 CENTS AND 29.3 CENTS, RESPECTIVELY, THE BIDS ON THE LARGER PROCUREMENT RANGING UP TO 80 CENTS PER UNIT. ACCORDINGLY, AND ON THE BASIS THAT THE EXISTENCE OF A MISTAKE IN YOUR BID WAS NOT APPARENT TO THE CONTRACTING OFFICER ABSENT ANY PRIOR PROCUREMENT HISTORY AT THE DGSC AND IN THE LIGHT OF THE RELATIVELY CLOSE RELATION BETWEEN THE ESTIMATED PRICE STATED IN THE MIPR AND THE TWO BID PRICES RECEIVED, THE DGSC DENIED YOUR REQUEST FOR RELIEF.

IN SUBSEQUENT CORRESPONDENCE WITH THE DGSC, APPEALING FROM ITS DECISION, YOU FURNISHED COPIES OF BIDS SUBMITTED BY YOU ON TWO PRIOR DEPARTMENT OF THE NAVY PROCUREMENTS OF THE IDENTIFICATION PLATES, IN WHICH YOU HAD QUOTED UNIT PRICES OF 32.6 CENTS AND 33 CENTS. DGSC POINTS OUT, HOWEVER, THAT IN NEITHER OF SUCH PROCUREMENTS, WHICH ARE IDENTIFIED AS THE TWO PROCUREMENTS ON WHICH THE REQUISITIONING ACTIVITY FURNISHED PRICE INFORMATION AS SET FORTH ABOVE, WERE YOU THE LOW BIDDER.

IT IS YOUR POSITION THAT A REVIEW OF PRIOR BID PRICES FOR THE ITEM, AS WELL AS CONSIDERATION OF THE DIFFERENCE BETWEEN YOUR BID AND STAFFORD'S BID, WOULD HAVE WARRANTED VERIFICATION BY DGSC OF YOUR BID BEFORE AWARD. ALSO, YOU STATE THAT YOU WILL REALIZE A LOSS AT YOUR CONTRACT PRICE.

IT IS THE POSITION OF THE DGSC, WITH WHICH DSA HEADQUARTERS CONCURS, THAT THE CIRCUMSTANCES WERE NOT SUCH AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE IN YOUR BID, AND THAT SINCE THE MISTAKE WAS NOT MUTUAL YOUR CLAIM HAS BEEN PROPERLY DENIED.

THE RESPONSIBILITY FOR PREPARATION OF A BID RESTS WITH THE BIDDER. THEREFORE, A BIDDER WHO MAKES A MISTAKE IN A BID WHICH HAS BEEN ACCEPTED BY THE GOVERNMENT MUST BEAR THE CONSEQUENCES UNLESS THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD. 23 COMP. GEN. 596; 20 ID. 652; 17 ID. 373 AND 532. FURTHER, WHERE ONLY TWO WIDELY VARIANT BIDS ARE RECEIVED, NO FAIR COMPARISON OF PRICES CAN BE MADE, THERE BEING NO MORE REASON FOR CONSIDERING THAT THE LOW BID IS TOO LOW THAN FOR CONSIDERING THAT A MISTAKE WAS MADE BY THE HIGH BIDDER IN QUOTING A PRICE TOO HIGH. 20 COMP. GEN. 286; B-158862, MAY 16, 1966, 45 COMP. GEN.

IN THIS CASE, THERE WAS NO MUTUAL MISTAKE, NOR WAS ANY NOTICE SERVED ON THE GOVERNMENT BY YOU PRIOR TO AWARD OF ANY MISTAKE IN YOUR BID, WHICH WOULD NECESSARILY HAVE BEEN UNILATERAL. ACCORDINGLY, THE ONLY QUESTION FOR DETERMINATION IS WHETHER THERE WERE ANY CIRCUMSTANCES WHICH WOULD JUSTIFY A CONCLUSION THAT THE CONTRACTING OFFICER HAD CONSTRUCTIVE NOTICE OF THE ALLEGED MISTAKE.

SINCE ONLY TWO BIDS WERE RECEIVED, A COMPARISON OF THE BIDS WOULD HAVE BEEN OF QUESTIONABLE VALUE. FURTHER, IN THE LIGHT OF THE INFORMATION RECEIVED FROM THE REQUISITIONING ACTIVITY TO THE EFFECT THAT PRICES ON PRIOR PROCUREMENTS HAD RANGED FROM 27 CENTS TO 80 CENTS PER UNIT, IT DOES NOT APPEAR LIKELY THAT A PRE-AWARD REVIEW OF SUCH DATA BY THE DGSC WOULD HAVE BEEN REGARDED AS JUSTIFICATION FOR QUESTIONING YOUR UNIT BID PRICE OF 26 CENTS. ACCORDINGLY, AND SINCE SUCH PRICE WAS IN CLOSE PROXIMITY TO THE ESTIMATED UNIT PRICE OF 28.6 CENTS REFLECTED ON THE MIPR, WE MUST CONCUR WITH THE VIEW OF THE DGSC AND DSA THAT THE CONTRACTING OFFICER CANNOT BE CHARGED WITH CONSTRUCTIVE NOTICE OF A MISTAKE IN YOUR BID. IN THE CIRCUMSTANCES, THE BID HAVING BEEN ACCEPTED BY THE GOVERNMENT IN GOOD FAITH, WITHOUT NOTICE EITHER ACTUAL OR CONSTRUCTIVE OF MISTAKE, IT IS OUR VIEW THAT THERE IS NO LEGAL BASIS FOR RELIEF.

FOR THE REASONS STATED, WE CONCUR WITH THE ACTION OF THE DGSC IN DENYING YOUR REQUEST FOR A PRICE INCREASE UNDER THE CONTRACT IN QUESTION.