B-177687, FEB 21, 1973

B-177687, FEB 21, 1973

CONTRACT - PRICE ADJUSTMENT - CONSTRUCTIVE NOTICE OF ERROR DECISION CONCERNING A REQUEST BY THE FORWARD CORP. FOR AN UPWARD PRICE ADJUSTMENT OF $3,182 AS A RESULT OF A MISTAKE IN BID ALLEGED AFTER THE AWARD OF A CONTRACT BY THE BUSINESS SERVICES CENTER, VETERANS ADMINISTRATION CENTER, BONHAM, TEXAS. SINCE THE DIFFERENCE BETWEEN FORWARD'S BID AND THE BID OF THE ONLY OTHER OFFEROR WAS NOT SO GREAT SO AS TO PUT THE CONTRACTING OFFICER ON EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR, THE GOVERNMENT'S ACCEPTANCE OF THE BID CREATES A VALID AND BINDING CONTRACT FROM WHICH NO RELIEF CAN BE GRANTED. 45 COMP. GEN. 700 (1966).

TO MR. DONALD E. JOHNSON:

REFERENCE IS MADE TO LETTER 134C DATED DECEMBER 19, 1972, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING OUR DECISION CONCERNING A REQUEST BY THE FORWARD CORPORATION (FORWARD) FOR AN UPWARD PRICE ADJUSTMENT OF $3,182 AS A RESULT OF AN ALLEGED MISTAKE IN BID AFTER THE AWARD OF CONTRACT NO. V522C-87 BY THE BUSINESS SERVICES DIVISION, VETERANS ADMINISTRATION CENTER, BONHAM, TEXAS.

THE INVITATION FOR BIDS COVERED THE CONSTRUCTION OF A 30 TEMPORARY BED NURSING HOME CARE UNIT IN ACCORDANCE WITH AN ATTACHED SPECIFICATION. FORWARD SUBMITTED THE LOW BID IN THE AMOUNT OF $19,653 AND THE ONLY OTHER BIDDER, GULF-TEX CONSTRUCTION, INC., BID $25,883.10. THE GOVERNMENT ESTIMATE FOR THE CONTRACT WAS $21,271. ON OCTOBER 17, 1972, AWARD WAS MADE TO FORWARD IN THE AMOUNT OF $19,653. ON NOVEMBER 7, 1972, FORWARD NOTIFIED THE CONTRACTING OFFICER THAT THROUGH AN ERROR IT HAD FAILED TO INCLUDE IN ITS BID THE COST OF THE SPECIFICATION REQUIREMENT FOR FURNISHING AND INSTALLING "CUBICLE CURTAIN TRACKS." IN SUPPORT OF THE ERROR, WORKSHEETS WERE SUBMITTED TO THE CONTRACTING OFFICER. THE WORKSHEETS DO NOT REFLECT AN ENTRY IN THE AMOUNT OF $3,182 FOR THE "CUBICLE CURTAIN TRACKS." BUT THE CONTRACTING OFFICER RECOMMENDS AN UPWARD PRICE ADJUSTMENT OF $3,182 IN THE CONTRACT PRICE AS THE COMPANY WOULD REMAIN THE LOW BIDDER AND BECAUSE FORWARD HAS OFFERED SUFFICIENT PROOF OF ITS ERROR.

THE CONTRACTING OFFICER STATES THAT HE WAS NOT ON ACTUAL NOTICE AS TO ANY POSSIBLE ERROR IN THE BID OF FORWARD UNTIL HE WAS CONTACTED AFTER AWARD.

THE GENERAL RULE REGARDING ALLOWANCE OF AN UPWARD PRICE ADJUSTMENT ARISING FROM AN ERROR IN BID ALLEGED AFTER AWARD IS THAT ACCEPTANCE OF THE BID RESULTS IN A VALID AND BINDING CONTRACT UNLESS THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID AT OR PRIOR TO THE TIME OF THE AWARD. 45 COMP. GEN. 700 (1966). WE BELIEVE THAT THE DIFFERENCE BETWEEN THE TWO BIDS RECEIVED AND THE GOVERNMENT ESTIMATE WAS NOT SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR. THEREFORE, ACCEPTANCE OF THE BID IN THESE CIRCUMSTANCES CONSTITUTED A VALID AND BINDING AGREEMENT FROM WHICH NO RELIEF MAY BE GRANTED.