B-170815, JAN 7, 1971

B-170815, JAN 7, 1971

CONTRACTS - MISTAKE IN BID DECISION DENYING RELIEF TO DELCO ELECTRONICS CORPORATION DUE TO MISTAKE OF $3,416 IN BID WHICH RESULTED IN AWARD OF CONTRACT TO FURNISH 28,000 FEET OF CABLE TO THE NAVAL SUPPLY CENTER, NORFOLK, VA. IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY FOR THE PREPARATION OF BIDS IS ON THE BIDDER AND WHEN SUCCESSFUL LOW BIDDER QUOTED A PRICE 20 PERCENT LOWER THAN THE NEXT LOWEST TOTAL BID AND THE CONTRACTING OFFICER POINTED THIS OUT AND RECEIVED AN UNEQUIVOCAL BID VERIFICATION, AN AWARD PURSUANT TO SUCH VERIFICATION RESULTS IN A VALID AND BINDING CONTRACT FIXING THE RIGHTS AND LIABILITIES OF THE PARTIES, NOTWITHSTANDING THE DISCOVERY AFTER AWARD THAT CLAIMANT HAD BEEN FURNISHED AN INCORRECT PRICE BY ITS SUPPLIER.

TO DELCO ELECTRONICS CORPORATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 10, 1970, WITH ENCLOSURES, REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID WHICH IS THE BASIS OF DEPARTMENT OF THE NAVY CONTRACT NO. N00189-71-C-0016.

THE NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, BY INVITATION FOR BIDS NO. N00189-70-B-0170, REQUESTED BIDS FOR FURNISHING 28,000 FEET OF CABLE, TYPE N-SD. IN RESPONSE, YOUR FIRM SUBMITTED A BID OFFERING TO FURNISH THE CABLE AT A UNIT PRICE OF $473 PER THOUSAND FEET OR FOR A TOTAL PRICE OF $13,244. THE SIX OTHER BIDS RANGED FROM $16,660 TO $22,419.60.

IN EVALUATING THE BIDS, THE CONTRACTING OFFICER NOTED THAT THERE WAS A DIFFERENCE OF $3,416 OR APPROXIMATELY 20 PERCENT BETWEEN YOUR LOW TOTAL BID AND THE NEXT LOWEST TOTAL BID. ON JULY 2, 1970, A TELEPHONE CALL WAS MADE TO YOUR CORPORATION AND YOUR MR. EGAN WAS ADVISED THAT THE DIFFERENCE OF $3,416 BETWEEN YOUR LOW BID AND THE NEXT LOWEST BID HAD GIVEN THE CONTRACTING OFFICER REASON TO BELIEVE THAT A MISTAKE HAD BEEN MADE AND THAT THE CONTRACTING OFFICE WAS REQUESTING VERIFICATION OF YOUR BID. IS REPORTED THAT MR. EGAN PROMPTLY STATED THAT YOUR CORPORATION'S UNIT PRICE OF $473 PER THOUSAND FEET WAS CORRECT AND THAT YOUR CORPORATION WAS BIDDING IN COMPLETE COMPLIANCE WITH THE SPECIFICATIONS. BY LETTER DATED JULY 3, 1970, YOUR MR. EGAN CONFIRMED YOUR BID PRICE AS BEING CORRECT. JULY 15, 1970, CONTRACT NO. N00189 71-C-0016 WAS AWARDED TO YOUR FIRM.

BY LETTER DATED JULY 31, 1970, YOUR FIRM RETURNED THE CONTRACT TO THE CONTRACTING OFFICE AND ADVISED THAT YOUR FIRM COULD NOT PERFORM BECAUSE THE FACTORY HAD DISCOVERED THAT IT HAD MADE A MISTAKE IN QUOTING ON THE CABLE AND THAT THE MISTAKE WAS NOT DISCOVERED AT THE FACTORY UNTIL YOUR ORDER FOR THE CABLE WAS BEING PROCESSED. THE RECORD INDICATES THAT THE "FACTORY" IS THE COLLYER INSULATED WIRE CO. WHICH QUOTED A PRICE TO ITS REPRESENTATIVE, W. A. LEISER & CO., WHICH IN TURN QUOTED A PRICE TO YOUR FIRM. IN YOUR LETTER OF JULY 31, 1970, TO THE CONTRACTING OFFICE, YOU STATE THAT THE ERROR RESULTED FROM THE ACTION OF COLLYER'S ESTIMATOR IN MISREADING THE CALCULATOR WHEN HE WAS WRITING THE FIGURE DOWN TO QUOTE ON THE CABLE.

IN A LETTER DATED SEPTEMBER 10, 1970, TO OUR OFFICE, YOU STATED THAT YOUR FIRM INTENDED TO QUOTE A PRICE OF $709 PER THOUSAND FEET INSTEAD OF $473 PER THOUSAND FEET. YOU REQUESTED THAT THE TOTAL CONTRACT PRICE OF THE CABLE BE INCREASED BY $3,416 - THE DIFFERENCE BETWEEN YOUR ORIGINAL TOTAL BID PRICE AND THE TOTAL BID PRICE QUOTED BY THE NEXT LOWEST BIDDER ON THE CABLE. IN SUPPORT OF YOUR ALLEGATION OF ERROR, YOU SUBMITTED COPIES OF CORRESPONDENCE RECEIVED FROM W. A. LEISER & CO. AND COLLYER.

THE QUESTION PRESENTED IN THIS CASE IS NOT WHETHER A MISTAKE HAS BEEN MADE BUT WHETHER AN AWARD PURSUANT TO THE FACTS AS PRESENTED ABOVE RESULTED IN A VALID AND BINDING CONTRACT. IN REGARD TO SITUATIONS OF THIS NATURE, IT IS WELL ESTABLISHED THAT THE RESPONSIBILITY FOR THE PREPARATION OF BIDS IS ON THE BIDDER WHO IS PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICES WHICH CAN BE CHARGED IN ORDER FOR A BIDDER TO REALIZE A REASONABLE PROFIT. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V UNITED STATES, 100 CT. CL. 120, 163 (1943).

PARAGRAPH 2-406.3(E)(1) OF THE ARMED SERVICES PROCUREMENT REGULATION PLACES A DUTY ON THE CONTRACTING OFFICER TO VERIFY A BID IF THERE IS AN APPARENT MISTAKE IN THE BID OR IF THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE HAS BEEN MADE. ACCEPTANCE OF A BID UNDER THOSE CONDITIONS WITHOUT VERIFICATION WOULD NOT RESULT IN A BINDING CONTRACT. HOWEVER, IF THE BIDDER DOES VERIFY HIS BID, AS HERE, WITH KNOWLEDGE OF THE FACTS WHICH IMPELLED THE CONTRACTING OFFICER TO REQUEST VERIFICATION, AND AWARD IS MADE PURSUANT TO SUCH VERIFICATION, NO PRESUMPTION OF BAD FAITH ON THE PART OF THE CONTRACTING OFFICER ARISES. SEE ALABAMA SHIRT & TROUSER CO. V UNITED STATES, 121 CT. CL. 313 (1952); 27 COMP. GEN. 17 (1947). IT IS UNFORTUNATE THAT YOUR FIRM WAS FURNISHED AN INCORRECT PRICE BY YOUR SUPPLIER. AFTER BEING ADVISED THAT YOUR BID WAS SUBSTANTIALLY LOW, A REPRESENTATIVE OF YOUR FIRM UNEQUIVOCALLY CONFIRMED YOUR BID IN WRITING TO THE CONTRACTING OFFICER. UPON SUCH UNEQUIVOCAL VERIFICATION, THE CONTRACTING OFFICER HAD A DUTY TO MAKE THE AWARD TO THE LOW BIDDER AND AN AWARD MADE ON SUCH BASIS IS FULLY JUSTIFIED. SEE CARCEGIE STEEL CO. V CONNELLY, 89 N.J.L. 1, 97 A. 774 (1916); SHRIMPTON MFG. CO. V BRIN, 59 TEX. CIV. APP. 352, 125 S.W. 942 (1910); AND ALABAMA SHIRT & TROUSER CO. V UNITED STATES, SUPRA.

THE ACCEPTANCE, AFTER CONFIRMATION, OF YOUR BID WAS IN GOOD FAITH - NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD - AND UNDER THE CIRCUMSTANCES CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RIGHT OF THE GOVERNMENT TO RECEIVE PERFORMANCE IN STRICT ACCORDANCE WITH THE CONTRACT TERMS MAY NOT BE WAIVED BY ANY OFFICER OF THE GOVERNMENT IN THE ABSENCE OF ADEQUATE CONSIDERATION, AND CONSIDERATIONS OF SYMPATHY FOR POSSIBLE HARDSHIPS OR MISFORTUNES TO THE CONTRACTOR DO NOT AUTHORIZE ANY EXCEPTION TO THE RULE. SEE 22 COMP. GEN. 260 (1942); DAY V UNITED STATES, 245 U.S. 159 (1917).

ACCORDINGLY, ON THE PRESENT RECORD, THERE IS NO LEGAL BASIS FOR GRANTING THE REQUESTED RELIEF. SEE 47 COMP. GEN. 616 (1968).