B-164092, APR. 23, 1968

B-164092, APR. 23, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER OF APRIL 22, 1968, FROM THE ASSISTANT SECRETARY FOR ADMINISTRATION, REQUESTING A DECISION ON THE REQUEST OF THOMPSON-HAYWARD CHEMICAL COMPANY THAT IT BE RELIEVED OF ITS OBLIGATION UNDER CONTRACT NO. 14-11-0008-3076 WITH THE BUREAU OF LAND MANAGEMENT BECAUSE OF AN ERROR IN ITS QUOTED PRICES ALLEGED AFTER AWARD OF THE CONTRACT.

THE INVITATION INVOLVED CALLED FOR BIDS ON SIX LOTS OF HERBICIDE, TO BE DELIVERED TO FOUR DESTINATIONS IN WYOMING AND ONE IN MONTANA. EACH OF THE SIX LOTS WAS AN ITEM AND AWARDABLE SEPARATELY. ITEMS 1 AND 2 CALLED FOR VOLATILE HERBICIDE AND ITEMS 3 THROUGH 6 CALLED FOR HERBICIDE OF LOW VOLATILITY. SIX BIDS COVERING THE SIX ITEMS WERE RECEIVED AND OPENED MARCH 25, 1968.

IT IS SIGNIFICANT THAT THE FIVE OTHER BIDDERS ALL QUOTED A HIGHER UNIT PRICE FOR THE LOW VOLATILE HERBICIDE (ITEMS 3-6) THAN FOR THAT OF HIGHER VOLATILITY (ITEMS 1 AND 2). IN THE CASE OF ITEMS 2 AND 4, WHICH WERE TO THE SAME DESTINATION AND FOR ABOUT THE SAME QUANTITY, THIS PRICE DIFFERENCE WAS $0.40, $0.73, $0.781, $0.84, AND $1.10 PER GALLON. THOMPSON-HAYWARD BID A UNIFORM PRICE OF $3.59 PER GALLON FOR ALL SIX ITEMS, AND AWARD WAS MADE TO IT BY TELETYPE ON FRIDAY, APRIL 5, 1968.

ON MONDAY, APRIL 8, 1968, THE REPRESENTATIVE WHO HAD SIGNED THE BID FOR THOMPSON-HAYWARD TELEPHONED TO STATE THAT THE BID WAS IN ERROR. THE SAME DAY HE BROUGHT HIS WORKSHEETS AND COMPANY PRICE LIST TO THE CONTRACTING OFFICER, AND EXPLAINED THAT HIS SECRETARY IN PREPARING THE FINAL BID FORM ASSUMED THAT ALL ITEMS WERE THE SAME MATERIAL AND CARRIED THE SAME PRICE. THE COMPANY PRICE LIST SHOWS A DIFFERENCE OF $0.81 PER GALLON BETWEEN THE LOW AND HIGH VOLATILE HERBICIDES, THE RESPECTIVE PRICES IN 30-GALLON DRUMS BEING $4.65 AND $3.84 PER GALLON IN TRUCKLOAD LOTS.

THE CONTRACTING OFFICER IS OF THE OPINION THAT A BONA FIDE MISTAKE WAS MADE, AS ALLEGED, AND IN VIEW OF THE EVIDENCE PRESENTED WE AGREE. THE QUESTION BEFORE US, HOWEVER, IS NOT WHETHER A MISTAKE WAS MADE. IT IS RATHER WHETHER ACCEPTANCE OF THE ADMITTEDLY ERRONEOUS BID GAVE RISE TO A BINDING CONTRACT. THE ANSWER TO THIS DEPENDS ON WHETHER THE CONTRACTING OFFICER, IN CONSIDERING THE BIDS RECEIVED, SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR IN THOMPSON-HAYWARD'S BID. IF SO, VERIFICATION OF THE BID SHOULD HAVE BEEN REQUESTED BEFORE AWARD. KEMP V UNITED STATES, 38 F.SUPP. 568.

WE BELIEVE THAT THE DIFFERENCE IN PRICES QUOTED BY THE OTHER FIVE BIDDERS FOR HIGH AND LOW VOLATILE HERBICIDE WAS ENOUGH TO HAVE ALERTED THE CONTRACTING OFFICER TO THE POSSIBILITY THAT THOMPSON-HAYWARD HAD MADE A MISTAKE IN QUOTING THE SAME PRICE FOR BOTH. AND THE EVIDENCE IS CONVINCING THAT THE PRICE WAS TOO LOW FOR ITEMS 3 THROUGH 6, RATHER THAN TOO HIGH FOR ITEMS 1 AND 2.

WE AGREE WITH THE RECOMMENDATION OF THE ASSISTANT SECRETARY THAT THE CONTRACT SHOULD BE RESCINDED. THE ENCLOSURES TO HIS LETTER ARE RETURNED AS REQUESTED.