B-173163, OCT 1, 1971

B-173163, OCT 1, 1971

BID PROTEST - "LOT" BASIS BIDS - VERIFICATION OF BIDS DECISION THAT THE REJECTION OF THE BID OF SURPLUS TIRE SALES UNDER A SALES IFB ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, OAKLAND, CAL., WAS IMPROPER. SINCE SURPLUS TIRE SALES VERIFIED THAT ITS TOTAL PRICE WAS CORRECT, ITS HIGH BID SHOULD HAVE BEEN ACCEPTED AS CONTEMPLATED BY THE SALES INVITATION. WHILE NO CORRECTIVE ACTION IS POSSIBLE IN THIS CASE, THE INVITATION LANGUAGE LEADING TO THE INSTANT PROTEST SHOULD BE GIVEN EFFECT IN FUTURE SURPLUS SALES.

TO GENERAL ROBINSON:

BY LETTER DATED JULY 21, 1971, FILE DSAH-G, THE ASSISTANT COUNSEL FURNISHED US WITH A REPORT ON THE PROTEST OF SURPLUS TIRE SALES OF THE AWARD OF A CONTRACT TO ANOTHER FIRM UNDER SALES INVITATION FOR BIDS (IFB) NO. 44-1177, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, OAKLAND, CALIFORNIA.

ITEM 29, THE SUBJECT OF THE PROTEST WAS ADVERTISED AS:

"STEEL BARS, ROUND: CONSISTING OF:

200 FT. - 1" DIA., 240" LENGTH.

2105 FT. - 1-1/8" DIA., 120" TO 240" LENGTH.

"EST. TOTAL WT. 7750 LBS. 1 LOT."

THE IFB CONTAINED THE FOLLOWING LEGENDS:

"ENTER ONLY A TOTAL FOR THE LOT IN THE 'TOTAL PRICE BID' COLUMN WHEN BIDS ARE SOLICITED BY THE LOT."

THE DEFENSE LOGISTICS SERVICES CENTER FORM 436(REV.) FEBRUARY 1971, ENTITLED SALE BY REFERENCE, WAS INCORPORATED BY REFERENCE.

PARAGRAPH 3, PART 2 OF THAT DOCUMENT PROVIDING IN PART:

" *** HOWEVER, UNLESS THE INVITATION OTHERWISE PROVIDES, A BID COVERING ANY LISTED ITEM MUST BE SUBMITTED ON THE BASIS OF THE UNIT SPECIFIED FOR THAT ITEM AND MUST COVER THE TOTAL NUMBER OF UNITS DESIGNATED FOR THAT ITEM."

PARAGRAPH 5B, PART 2 PROVIDES:

" *** WHEN BIDS ARE SOLICITED ON A 'LOT' BASIS, BIDDERS SHOULD SUBMIT A SINGLE TOTAL PRICE IN THE TOTAL PRICE BID COLUMN ON THE BID SHEET. BIDDERS SHOULD NOT MAKE ANY ENTRY IN THE UNIT PRICE BID COLUMN. IN THE EVENT A BIDDER SUBMITS A TOTAL BID PRICE AND ALSO A UNIT BID PRICE WHICH ARE NOT IDENTICAL, THE UNIT BID PRICE WILL NOT BE CONSIDERED."

NOTWITHSTANDING THE ABOVE INSTRUCTIONS, SURPLUS SALES BID A UNIT PRICE OF $.022 AND A TOTAL PRICE OF $203.71. SINCE THESE FIGURES ARE MATHEMATICALLY INCONSISTENT, THE SALES CONTRACTING OFFICER REQUESTED THAT THE BIDDER VERIFY ITS PRICES. SURPLUS SALES ADVISED THAT ITS INTENDED PRICE WAS THE TOTAL PRICE BID AND THAT THE UNIT PRICE WAS MEANINGLESS UNDER THE TERMS OF THE IFB. NO EVIDENCE OF THE INTENDED BID WAS SUBMITTED BY SURPLUS SALES. DESPITE THE HIGH TOTAL BID, AWARD WAS MADE TO A LOWER BIDDER AT $162.75.

THE SALES AGENCY ADVISES THAT NOTWITHSTANDING THE SALES INVITATION LANGUAGE, THE SALES CONTRACTING OFFICER IS OBLIGATED TO VERIFY A SUSPECTED ERROR AND TO MAKE AWARD ONLY WHEN THE INTENDED BID IS SUPPORTED BY ADEQUATE EVIDENCE.

WE DO NOT AGREE THAT AWARD COULD NOT HAVE BEEN MADE TO SURPLUS TIRE SALES IN VIEW OF THE DISCREPANCY BETWEEN ITS UNIT PRICE AND TOTAL BID PRICE. WHILE IT IS TRUE THAT THE CONTRACTING OFFICER IS CHARGED WITH THE DUTY OF VERIFYING SUSPECTED BID ERRORS, THE CONTRACTING OFFICER, IN DISCHARGING THIS OBLIGATION, SHOULD GIVE EFFECT TO THE TERMS OF THE SALES INVITATION WHICH OBVIATED THE NECESSITY TO VERIFY IN THE CASE OF APPARENT UNIT AND TOTAL BID PRICE VARIATIONS.

FURTHER, ALTHOUGH THE CONTRACTING OFFICER COULD HAVE ACCEPTED THE BID IN QUESTION ON THE BASIS OF THE TOTAL BID PRICE WITHOUT REGARD TO THE UNIT PRICE QUOTED, HE NEVERTHELESS CONTACTED THE BIDDER FOR VERIFICATION AND WAS ADVISED BY THE BIDDER TO DISREGARD THE UNIT PRICE. SINCE SURPLUS TIRE SALES VERIFIED THAT ITS TOTAL PRICE WAS CORRECT, ITS HIGH BID SHOULD HAVE BEEN ACCEPTED AS CONTEMPLATED BY THE SALES INVITATION.

THE TWO CASES CITED IN THE JULY 16, 1971, REPORT OF THE ASSISTANT COUNSEL FOR THE PROPOSITION THAT THE ERROR DETECTION RESPONSIBILITY OF THE CONTRACTING OFFICER SUPERCEDES THE CLEAR INVITATION LANGUAGE ARE NOT APPLICABLE TO THIS CASE. IN B-169688, MAY 27, 1970, BIDS WERE NOT TO BE SUBMITTED ON A LOT BASIS AND, CONTRARY TO THE INSTANT CASE, THE INVITATION CONTAINED NO CLEAR DIRECTION AS TO WHETHER UNIT OR TOTAL PRICES WERE TO TAKE PRECEDENCE WHERE A DISCREPANCY EXISTED. IN 37 COMP. GEN. 829 (1958), ALTHOUGH OUR OFFICE DECLINED TO GIVE EFFECT TO INVITATION LANGUAGE THAT UNIT PRICES WERE TO TAKE PRECEDENCE OVER EXTENDED TOTALS, WE POINTED OUT THAT NO VERIFICATION WAS REQUESTED IN THAT CASE AND CONCLUDED THAT THE LANGUAGE PROVIDING FOR UNIT PRICE PRECEDENCE "SHOULD ONLY BE APPLIED, WITHOUT REQUESTING VERIFICATION, WHERE THE CORRECTION (OF THE EXTENDED PRICE) RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE."

SINCE THE SALE HERE HAS BEEN COMPLETED, NO CORRECTIVE ACTION IS NOW POSSIBLE. HOWEVER, THE INVITATION LANGUAGE LEADING TO THE INSTANT PROTEST SHOULD BE GIVEN EFFECT IN FUTURE SURPLUS SALES.