B-165127, OCT. 3, 1968

B-165127, OCT. 3, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 23, 1968, WITH ENCLOSURES, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, REQUESTING A DECISION CONCERNING A MISTAKE IN BID CLAIMED AFTER AWARD BY E. G. KRAMSCHUSTER, INC., UNDER CONTRACT NO. 01-1651, ISSUED BY THE U.S. FOREST SERVICE, MILWAUKEE, WISCONSIN.

THE INVITATION FOR BIDS WAS ISSUED ON AUGUST 30, 1967, FOR THE REROOFING OF SEVERAL BUILDINGS LOCATED AT OJIBWAY JOB CORPS CONSERVATION CENTER, OTTAWA NATIONAL FOREST, MICHIGAN. FIVE BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 27, 1967. KRAMSCHUSTER, INC., AS LOW BIDDER AT $25,345.74, WAS AWARDED THE CONTRACT ON OCTOBER 3, 1967.

ON OCTOBER 24, 1967, MR. KRAMSCHUSTER ADVISED THE CONTRACTING OFFICER BY TELEPHONE ABOUT HIS MISTAKE IN BID, STATING THAT HE FAILED TO INCLUDE IN HIS BID PRICE THE COST OF PLYWOOD SHEATHING HE WAS REQUIRED TO FURNISH ACCORDING TO THE SUBJECT SPECIFICATION. IN EXPLAINING THIS MISTAKE, A LETTER FROM MR. KRAMSCHUSTER, DATED OCTOBER 25, 1967, STATED THAT: "AS YOU KNOW WE WERE ALSO THE SUCCESSFUL BIDDER ON THE REROOFING AT CLAM LAKE JCCC WHICH WAS, FOR ALL PRACTICAL PURPOSES, IDENTICAL TO THE OJIBWAY JCCC REROOFING PROJECT EXCEPT THAT THE PLYWOOD CALLED FOR AT THE CLAM LAKE PROJECT WAS GOVERNMENT FURNISHED. ALTHOUGH IT WAS SET FORTH IN THE SPECIFICATIONS THAT THE CONTRACTOR WAS TO FURNISH THE PLYWOOD ON THE OJIBWAY JOB IT WAS NOT AS OFTEN STATED AS WAS THE FACT THAT THE GOVERNMENT WAS FURNISHING THE PLYWOOD ON THE CLAM LAKE JOB.'

IN SUPPORT OF THE ALLEGATION OF ERROR, THE CONTRACTOR SUBMITTED HIS ORIGINAL WORKSHEETS, TOGETHER WITH AN INVOICE FROM A LUMBER DEALER, SHOWING DELIVERY OF 1,738 PIECES OF PLYWOOD TO THE JOB SITE AT A COST OF $3,719.80. THESE PAPERS DISCLOSE THAT NO AMOUNT WAS INCLUDED IN THE BID PRICE FOR COST OF THE PLYWOOD SHEATHING.

IN HIS REPORT, THE CONTRACTING OFFICER STATES THAT THERE IS SUFFICIENT EVIDENCE TO SHOW THAT A BONA FIDE MISTAKE WAS MADE BY THE CONTRACTOR AND RECOMMENDS THAT THE CONTRACT PRICE BE INCREASED BY $3,431.62, WHICH REPRESENTS THE COST OF 1,634 OF THE 1,738 PIECES OF SHEATHING INVOICED TO THE CONTRACTOR, AND APPARENTLY USED TO PERFORM THE CONTRACT.

GENERALLY, A CONTRACT WILL NOT BE REFORMED WHEN A UNILATERAL ERROR IN THE BID PRICE IS ALLEGED AFTER THE CONTRACT HAS BEEN AWARDED BECAUSE ONCE A BID HAS BEEN ACCEPTED, A BINDING CONTRACT IS FORMED AND THE CONTRACTOR MUST BEAR THE CONSEQUENCES OF HIS OWN ERROR. SEE OGDEN AND DOUGHERTY V U.S., 102 CT. CL. 249; SALIGMAN V U.S., 56 F.SUPP. 505; 36 COMP. GEN. 441; 17 ID. 575. HOWEVER, IF THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE LOW BID, THE ACCEPTANCE OF THAT BID DOES NOT RESULT IN A BINDING CONTRACT. SEE MOFFETT, HODGKINS, AND CLARKE CO. V ROCHESTER, 178 U.S. 373; EDMUND J. RAPPOLI CO., INC. V U.S., 98 CT. CL. 499. UNDER SUCH CIRCUMSTANCES, A VALID LEGAL BASIS FOR REFORMATION OF THE CONTRACT EXISTS. SEE B-158675, MARCH 30, 1966; B-160433, DECEMBER 1, 1966; B 160081, OCTOBER 10, 1966; B- 160167, OCTOBER 6, 1966.

THE RECORD INDICATES THAT THE FOUR OTHER BIDDERS QUOTED BID PRICES RANGING FROM $34,588.00 TO $69,200.00, AND THAT THE GOVERNMENT'S ESTIMATE WAS $29,600.00. IN VIEW OF THE FACT THAT THE KRAMSCHUSTER BID OF $25,345.74 IS 27 PERCENT LESS THAN THE NEXT LOWEST BID, AND 14.4 PERCENT LESS THAN THE GOVERNMENT ESTIMATE, WE CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ALERTED TO THE POSSIBILITY OF AN ERROR IN THE BID PRICE. UNDER THESE CIRCUMSTANCES A VERIFICATION OF THE BID PRICE SHOULD HAVE BEEN REQUESTED BEFORE THE AWARD TO E. G. KRAMSCHUSTER, INC. SEE FEDERAL PROCUREMENT REGULATION 1-2.406-2.

IN VIEW OF THE FOREGOING, AND SINCE THE EVIDENCE SUBMITTED BY KRAMSCHUSTER ESTABLISHES THE AMOUNT OF THE ERROR, AND THE CORRECTED CONTRACT PRICE WOULD NOT EXCEED THAT OF THE NEXT LOWEST ACCEPTABLE BID, THE CONTRACT MAY BE REFORMED BY INCREASING THE PRICE $3,431.62.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO CONTRACT NO. 01-1651.

THE FILE TRANSMITTED WITH MR. MOSTOW'S LETTER OF AUGUST 23, 1968, IS RETURNED.