B-168337, DEC. 5, 1969
Highlights
IS ALLOWED RESCISSION WITHOUT LIABILITY. AS TOTAL COMPUTATION WAS MADE BY CONTRACTING OFFICER. WHO SHOULD THEREFORE HAVE BEEN ON NOTICE OF MISTAKE PRIOR TO AWARD. THAT CONTRACTOR COULD NOT HAVE INTENDED LESSER PRICE FOR 5-GALLON JUG THAN FOR 3-GALLON JUG AND THAT BONA FIDE MISTAKE WAS MADE IN BID OF WHICH CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE . IS CONCURRED WITH. RESCISSION OF CONTRACT IS ALLOWED WHEN PARTY NOT IN ERROR SHOULD HAVE KNOWN THEREOF. KUNZIG: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 5. N-3-AT-55171 WAS ISSUED AUGUST 8. WHICHEVER IS LATER. 3-GALLON AND 5-GALLON INSULATED JUGS IN THAT ORDER INSTEAD OF THE ORDER IN WHICH THEY WERE LISTED IN THE INVITATION.
B-168337, DEC. 5, 1969
MISTAKES--ALLEGATION AFTER AWARD--CONTRACTING OFFICER'S ERROR DETECTION DUTY--PRICE VARIANCES CONTRACTOR -- REQUESTING RELIEF FROM CONTRACT ON GROUND IT ERRONEOUSLY QUOTED 5-GALLON JUG PRICE FOR 3-GALLON JUG AND VICE VERSA -- IS ALLOWED RESCISSION WITHOUT LIABILITY, AS TOTAL COMPUTATION WAS MADE BY CONTRACTING OFFICER, WHO SHOULD THEREFORE HAVE BEEN ON NOTICE OF MISTAKE PRIOR TO AWARD; VIEW OF CONTRACTING OFFICER AND PROCUREMENT CHIEF -- THAT CONTRACTOR COULD NOT HAVE INTENDED LESSER PRICE FOR 5-GALLON JUG THAN FOR 3-GALLON JUG AND THAT BONA FIDE MISTAKE WAS MADE IN BID OF WHICH CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE -- IS CONCURRED WITH; AND IN CASE OF UNILATERAL ERROR ALLEGED AFTER AWARD, RESCISSION OF CONTRACT IS ALLOWED WHEN PARTY NOT IN ERROR SHOULD HAVE KNOWN THEREOF.
TO MR. KUNZIG:
REFERENCE IS MADE TO A LETTER DATED NOVEMBER 5, 1969, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, SUBMITTING FOR OUR REVIEW AND DECISION THE FINDINGS AND DETERMINATION OF A CONTRACTING OFFICER REGARDING A MISTAKE IN BID ALLEGED AFTER AWARD BY THE SCHLUETER MANUFACTURING COMPANY (SCHLUETER), ST. LOUIS, MISSOURI.
THE INVITATION FOR BIDS NO. N-3-AT-55171 WAS ISSUED AUGUST 8, 1969, COVERING AN INDEFINITE QUANTITY REQUIREMENT FOR MISCELLANEOUS FOOD PREPARATION AND SERVING EQUIPMENT AND HOUSEHOLD FURNISHINGS, INCLUDING INSULATED JUGS, FOR THE PERIOD SEPTEMBER 1, 1969, OR DATE OF AWARD, WHICHEVER IS LATER, THROUGH AUGUST 31, 1970. IN ADDITION, THE INVITATION STATED THAT AWARD WOULD BE MADE IN THE AGGREGATE BY GROUP.
THE AWARD TO SCHLUETER COVERED GROUP 1, ITEMS 1, 2 AND 3 FOR TWO-, FIVE- AND THREE-GALLON INSULATED JUGS. SCHLUETER CONTENDS IN ITS LETTER REQUESTING RELIEF FROM THE CONTRACT THAT IT ERRONEOUSLY QUOTED UNIT PRICES FOR 2-GALLON, 3-GALLON AND 5-GALLON INSULATED JUGS IN THAT ORDER INSTEAD OF THE ORDER IN WHICH THEY WERE LISTED IN THE INVITATION, NAMELY, 2- GALLON, 5-GALLON AND 3-GALLON. AS A RESULT, SCHLUETER QUOTED ITS 5-GALLON PRICE FOR THE 3-GALLON JUG AND ITS 3-GALLON PRICE FOR THE 5-GALLON JUG. THE ESTIMATED REQUIREMENTS WERE FOR 1,000 5-GALLON JUGS AND 300 3-GALLON JUGS.
AS A GENERAL RULE, WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, THE CONTRACT IS PRESUMED IN LAW TO EXPRESS THE UNDERSTANDING OF THE PARTIES. HOWEVER, WHEN THE PARTY NOT IN ERROR SHOULD HAVE SUSPECTED OR HAD REASON TO KNOW OF THE EXISTENCE OF THE ERROR, RECISSION OF THE CONTRACT IS ALLOWED. 37 COMP. GEN. 685, 686 (1958); MOFFETT, HODGKINS AND CLARKE COMPANY V ROCHESTER, 178 U.S. 373.
THE CONTRACTING OFFICER, WITH CONCURRENCE BY THE CHIEF, PROCUREMENT DIVISION, EXPRESSES THE VIEW THAT SCHLUETER COULD NOT HAVE INTENDED A LESSER PRICE FOR A 5-GALLON JUG THAN FOR A 3-GALLON JUG AND THAT A BONA FIDE MISTAKE WAS MADE IN THE BID OF WHICH THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE.
WE CONCUR IN THAT VIEW. WE THINK IT SIGNIFICANT IN THIS CASE THAT WHILE THE INVITATION CLEARLY STATED THAT AWARD WOULD BE MADE IN THE AGGREGATE BY GROUP, THE TOTAL COMPUTATION IS MADE BY THE CONTRACTING OFFICER. THEREFORE, THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE MISTAKE PRIOR TO AWARD.
ACCORDINGLY, WE WILL NOT OBJECT TO RECISSION OF THE CONTRACT WITHOUT LIABILITY TO THE CONTRACTOR.
THE ENCLOSURES TO THE LETTER OF NOVEMBER 5, 1969, ARE RETURNED HEREWITH AS REQUESTED.