B-165934, FEB. 3, 1969

B-165934, FEB. 3, 1969

TO MR. KNOTT:

REFERENCE IS MADE TO A LETTER OF JANUARY 8, 1969, WITH ENCLOSURES, FROM YOUR GENERAL COUNSEL, MR. HARRY R. VAN CLEVE, SUBMITTING FOR OUR CONSIDERATION A REQUEST FOR CANCELLATION OF CONTRACT NO. GS-06S-2378, BASED ON A MISTAKE IN BID ALLEGED AFTER AWARD BY THE GENERAL ELECTRIC SUPPLY COMPANY.

THE INVITATION FOR BIDS, FOR WHICH THE CONTRACT WAS AWARDED, WAS ISSUED ON AUGUST 16, 1968, FOR A DEFINITE QUANTITY PROCUREMENT OF FSC GROUP 5120, CRIMPING TOOLS, FOR DELIVERY TO THE FEDERAL SUPPLY SERVICE STORES DEPOT IN KANSAS CITY, MISSOURI.

THE INVITATION FOR BIDS WAS OPENED ON SEPTEMBER 6, 1968, AND THE SIX BIDS RECEIVED WERE AS FOLLOWS:

ITEM NO. 1 ITEM NO. 2

1. GENERAL ELECTRIC SUPPLY COMPANY NO BID $51.70 EA

2. R-AND-O TOOL COMPANY $21.95 EA 21.95 EA

3. TEXAS INSTRUMENT SUPPLY 53.23 EA 63.91 EA

4. TEK AIR INDUSTRIES, INC. 68.00 EA 83.00 EA

5. GILLER TOOL COMPANY 63.55 EA 76.95 EA

6. BURNDY OF MISSOURI, INC. 55.55 EA 66.90 EA

BECAUSE OF THE SUBSTANTIAL DIFFERENCE IN PRICE BETWEEN THE BIDS SUBMITTED BY THE R-AND-O TOOL COMPANY AND THE OTHER BIDS RECEIVED, THE CONTRACTING OFFICER ASKED R-AND-O TO VERIFY ITS BID. SUBSEQUENTLY, R AND-O SUBMITTED CLEAR AND CONVINCING EVIDENCE ESTABLISHING THE FACT THAT A MISTAKE HAD BEEN MADE IN ITS BID PRIOR TO AWARD AND CONSEQUENTLY THE CONTRACTING OFFICER PERMITTED R-AND-O TO WITHDRAW ITS BID. FOLLOWING THE WITHDRAWAL OF THE R-AND-O BID, AWARD OF THE CONTRACT FOR ITEM NO. 2 WAS MADE TO THE GENERAL ELECTRIC SUPPLY COMPANY ON NOVEMBER 5, 1968.

ON NOVEMBER 26, 1968, A REPRESENTATIVE OF GENERAL ELECTRIC ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN ITS BID IN RESPONSE TO ITEM NO. 2. BY LETTER DATED DECEMBER 2, 1968, GENERAL ELECTRIC REQUESTED THAT IT BE RELEASED FROM ITS CONTRACT STATING THAT ITS SUPPLIER MADE A CLERICAL ERROR BY SUBMITTING A QUOTATION ON A TOOL WHICH WOULD NOT MEET SPECIFICATION REQUIREMENTS, AND THAT ITS SUPPLIER DID NOT MANUFACTURE THE ITEM. IN SUPPORT OF ITS ALLEGATION, GENERAL ELECTRIC SUBMITTED COPIES OF THE QUOTATION IT HAD RECEIVED FROM ITS ORIGINAL SUPPLIER IN THE SUM OF $49.50 EACH FOR ITEM NO. 2 AND A COPY OF A LETTER DATED NOVEMBER 29, 1968 (AFTER THE DATE OF THE ALLEGED ERROR), FROM THE MANUFACTURER OF THE ITEM QUOTING A NEW PRICE OF $63.56 EACH FOR ITEM NO. 2. IT IS NOTED THAT THE ORIGINAL QUOTATION WAS DATED AUGUST 27, 1968, AND WAS GUARANTEED FIRM ONLY IF ORDER WAS RECEIVED WITHIN 30 DAYS.

IT IS REPORTED THAT THE ONLY PREVIOUS PRICE HISTORY FOR THE ITEM IN QUESTION BY YOUR KANSAS CITY REGIONAL OFFICE WAS A PROCUREMENT IN MAY 1968 AT A PRICE OF $63.82.

AS YOUR GENERAL COUNSEL CORRECTLY STATED, THE GENERAL RULE IS THAT WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD, RELIEF WILL BE GRANTED ONLY IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, OF THE ERROR PRIOR TO AWARD. IN THE INSTANT CASE, HAVING REGARD FOR THE FACT THAT THE BID PRICE WAS 19 PERCENT BELOW THE PRIOR CONTRACT PRICE AND 19.1 PERCENT UNDER THE NEXT LOW BID, WE AGREE WITH THE CONTRACTING OFFICER THAT HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE CONTRACTOR AND CONSEQUENTLY THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT FIRST REQUIRING VERIFICATION THEREOF. SEE B-157302, AUGUST 6, 965; B-158765, APRIL 8, 1966; B 165127, OCTOBER 3, 1968; B-148412, AUGUST 13, 1962; B-163731, SEPTEMBER 30, 1968.

ACCORDINGLY, THE CONTRACT MAY BE CANCELLED AS YOUR OFFICE HAS RECOMMENDED.

THE FILE TRANSMITTED WITH MR. VAN CLEVE'S LETTER OF JANUARY 8, 1969, IS RETURNED.