B-174682, JAN 18, 1972

B-174682, JAN 18, 1972

CONTRACT - MISTAKE IN BID - RELIEF DENIED DENIAL OF REQUEST OF THE NATIONAL MACHINERY COMPANY FOR RELIEF FROM AN ALLEGED ERROR IN THE BID SUBMITTED FOR A CONTRACT AWARDED BY THE BUREAU OF INDIAN AFFAIRS, PORTLAND, ORE., FOR TWO BRUSH CHIPPERS. WHEN THERE ARE ONLY TWO BIDS RECEIVED ON A SOLICITATION, NO FAIR COMPARISON CAN BE MADE FOR THE PURPOSE OF DETERMINING WHETHER AN ERROR HAS BEEN MADE IN THE BID. THE COMP. GEN. DOES NOT BELIEVE THAT THE DISPARITY BETWEEN THE TWO BIDS OR THE GOVERNMENT ESTIMATE WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR. ACCORDINGLY, NO LEGAL BASIS EXISTS FOR GRANTING THE REQUESTED RELIEF.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 1, 1971, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY, MANAGEMENT AND BUDGET, SUBMITTING FOR OUR CONSIDERATION A CLAIM FOR RELIEF BY THE NATIONAL MACHINERY COMPANY ON ACCOUNT OF AN ERROR IN BID ALLEGED AFTER AWARD OF CONTRACT NO. 14-20-0500- 3446.

INVITATION NO. 72-6-8-26 WAS ISSUED ON AUGUST 13, 1971, BY THE BUREAU OF INDIAN AFFAIRS, PORTLAND, OREGON, FOR TWO BRUSH CHIPPERS TO BE FURNISHED COMPLETE IN ACCORDANCE WITH ALL SPECIFICATIONS, TERMS AND CONDITIONS SET FORTH THEREIN. TWO BIDS WERE RECEIVED AND OPENED ON AUGUST 26, 1971.

THE NATIONAL COMPANY SUBMITTED THE LOWEST BID IN THE TOTAL AMOUNT OF $8,558 FOR THE TWO BRUSH CHIPPERS. THE ONLY OTHER BID RECEIVED WAS SUBMITTED BY SAHLBERG EQUIPMENT, INC., IN THE TOTAL AMOUNT OF $9,650. THE GOVERNMENT'S ESTIMATE WAS $9,800.

THE AWARD WAS MADE ON AUGUST 31, 1971, TO NATIONAL AS THE LOWEST RESPONSIVE BIDDER. ON SEPTEMBER 7, 1971, MR. MAURICE RODEN OF NATIONAL TELEPHONED THE BUREAU'S PORTLAND AREA PROCUREMENT OFFICER AND CLAIMED THAT THE BID SUBMITTED BY HIS FIRM WAS IN ERROR IN THAT IT HAD FAILED TO INCLUDE ANY AMOUNT FOR OVERHEAD, PROFIT OR EQUIPMENT SERVICING COSTS. LETTER DATED OCTOBER 12, 1971, NATIONAL SUBMITTED CERTAIN DOCUMENTS IN SUPPORT OF ITS CONTENTION THAT A MISTAKE IN BID WAS MADE. AN EXAMINATION OF THE WORK SHEETS ATTACHED TO THE LETTER INDICATES THAT THE PRICE BID WAS THE "TOTAL DEALER COST" OF THE EQUIPMENT BEFORE ADDING ANY AMOUNT FOR OVERHEAD, PROFIT, OR EQUIPMENT SERVICING COSTS. NATIONAL SEEKS AN ADJUSTMENT IN THE CONTRACT PRICE IN THE AMOUNT OF $1,328, WHICH IT CLAIMS IT WOULD HAVE BID WERE IT NOT FOR THE ERROR.

DELIVERY OF THE BRUSH CHIPPERS WAS COMPLETED ON OCTOBER 13, BUT THE CONTRACTOR HAS NOT AS YET REQUESTED PAYMENT. THE RECORD INDICATES THAT THE AMOUNT NATIONAL CLAIMS IT WOULD HAVE BID BUT FOR THE ERROR ($1,328 $8,558 $9,886) IS HIGHER THAN THE ONLY OTHER BID RECEIVED.

THE QUESTION FOR OUR CONSIDERATION IS WHETHER A VALID CONTRACT RESULTED UPON ACCEPTANCE OF THE NATIONAL BID. AS A GENERAL RULE, WHEN A UNILATERAL ERROR IS ALLEGED AFTER AWARD, RELIEF MAY NOT BE GRANTED FOR THE ERROR SINCE A BINDING AND ENFORCEABLE CONTRACT ARISES UPON ACCEPTANCE. SALIGMAN V UNITED STATES, 56 F. SUPP. 505 (1944), AND CASES CITED THEREIN. THE CONTRACTING OFFICER HAS STATED, UPON REVIEW OF THE WORK SHEETS, THAT HE BELIEVES THAT THERE WAS AN ERROR IN BID, BUT THAT THERE WAS NOTHING ON THE FACE OF THE BID TO PUT HIM ON NOTICE OF PROBABILITY OF ERROR.

WE HAVE HELD THAT ORDINARILY NO FAIR COMPARISON CAN BE MADE WHERE ONLY TWO VARIANT BIDS ARE RECEIVED, THERE BEING NO MORE REASON FOR CONSIDERING THE LOW BID TOO LOW THAN FOR CONSIDERING THAT A MISTAKE WAS MADE BY THE HIGH BIDDER IN QUOTING A PRICE TOO HIGH. THE DIFFERENCE BETWEEN THE TWO BIDS WAS ONLY $1,092 OR APPROXIMATELY 12 PERCENT. WE DO NOT THINK THAT THIS DISPARITY OR THE GOVERNMENT ESTIMATE WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN THE BID OF NATIONAL.

ACCORDINGLY, ON THE PRESENT RECORD, NO LEGAL BASIS EXISTS FOR INCREASING THE CONSIDERATION UNDER THE CONTRACT.