B-180090, JUN 10, 1974

B-180090, JUN 10, 1974

RESCISSION OR REFORMATION OF CONTRACT ON BASIS OF MISTAKE IN BID ALLEGED AFTER AWARD CANNOT BE ALLOWED WHERE DESPITE THE RECEIPT OF ONLY TWO VARIANT BIDS, THE RECORD SHOWS CONTRACTING OFFICER HAD NO ACTUAL OR CONSTRUCTIVE NOTICE OF PROBABILITY OF ERROR, AND LOW BID WAS IN LINE WITH BIDDER'S PRIOR BIDS, THE GOVERNMENT ESTIMATE, AND CONCURRENT BIDS IN SIMILAR PROCUREMENTS.

TO OFFICE ELECTRONICS, INC.:

IN A REQUEST TO OUR OFFICE DATED NOVEMBER 15, 1973, OFFICE ELECTRONICS, INC. (OEI), SOUGHT EITHER RESCISSION OR REFORMATION OF ITS GOVERNMENT PRINTING OFFICE (GPO) CONTRACT, GPO JACKET 518-264, PURCHASE ORDER 52836, ON THE BASIS OF A MISTAKE IN BID ALLEGED AFTER AWARD.

THE CONTRACT RESULTED FROM AN INVITATION FOR BIDS (IFB) ISSUED ON AUGUST 27, 1973, FOR 3 MILLION MARGINALLY PUNCHED CONTINUOUS FORMS WHICH WERE TO BE DELIVERED IN MONTHLY INCREMENTS OF 250,000 SETS COMMENCING ON OCTOBER 31, 1973. TWO BIDS WERE RECEIVED AND OPENED ON SEPTEMBER 7, 1973. OEI'S BID WAS $11,760 ($3.92/M) AND THE OTHER BID WAS $17,850 ($5.95/M). THE CONTRACT WAS AWARDED TO OEI ON SEPTEMBER 10, 1973, WITHOUT ANY CONFIRMATION BEING MADE OF THE BID. ON SEPTEMBER 27, 1973, OEI ADVISED GPO BY TELEPHONE THAT THE FIRM HAD MADE AN ERROR IN ITS BID.

IN SUPPORT OF ITS ALLEGATION OF ERROR, OEI SUBMITTED A SWORN STATEMENT THAT AN ADDITIONAL $3,000 WAS NEEDED TO CORRECT THE CONTRACT PRICE BECAUSE THE INTENDED ORIGINAL QUOTATION SHOULD HAVE BEEN AT $4.92/M INSTEAD OF THE $3.92/M BID. THUS THE BID WAS ALLEGED TO BE IN ERROR BY THE AMOUNT OF THE $1 PER THOUSAND. ALTHOUGH THE ORIGINAL WORKSHEET AND COMPANY PRICING DATA WERE REFERRED TO AND INCLUDED WITH THE SWORN STATEMENT, OUR OFFICE IS UNABLE TO DISCERN THE NATURE OF THE ASSERTED ERROR OR THE INTENDED BID PRICE.

OEI MAINTAINED, HOWEVER, THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE ERROR AND ASKED FOR CONFIRMATION OF ITS BID PRICE SINCE OEI'S BID WAS 33.7 PERCENT LOWER THAN THE OTHER BID.

IN 53 COMP. GEN. 30 (B-178059, JULY 17, 1973), WE HELD THAT THE RECEIPT OF TWO WIDELY VARIANT BIDS (70 PERCENT) WAS SUFFICIENT REASON, STANDING ALONE, TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF A MISTAKE. HERE, HOWEVER, FOR THE REASONS THAT FOLLOW, WE THINK IT UNREASONABLE TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE ALLEGED MISTAKE.

GPO STATED THAT THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF AN ERROR, AND THAT THE VARIANCE IN THE TWO BIDS (33.7 PERCENT) WAS NOT ENOUGH TO CHARGE HIM WITH CONSTRUCTIVE KNOWLEDGE OF POTENTIAL ERROR. IN THIS REGARD, GPO HAS ADVISED US THAT THE ESTIMATED COST OF THE PROCUREMENT BASED ON OEI'S PRICES IN EFFECT FOR THE IDENTICAL ITEM AT THE TIME BIDS WERE RECEIVED WAS $9,391. SINCE THE CONTRACT IN QUESTION INVOLVED MONTHLY DELIVERIES THROUGH SEPTEMBER 1974, GPO CONSIDERED THE OEI BID OF $11,760 TO BE REASONABLE IN VIEW OF RISING PAPER PRICES.

OUR REVIEW OF THE RECORD INDICATES THAT OEI'S BID PRICE WAS SIX CENTS ($0.06) AND TWO CENTS ($0.02) LESS PER THOUSAND THAN WHAT THE FIRM HAD BID RESPECTIVELY ON TWO DIFFERENT PRIOR GPO CONTRACTS WITHIN 30 DAYS OF THE SEPTEMBER 10, 1973, AWARD. WE ALSO NOTE THAT GPO PLACED AN IDENTICAL ORDER WITH ANOTHER FIRM ON SEPTEMBER 17, 1973, AT A BID PRICE OF $4.29/M.

WE HAVE NO LEGAL BASIS TO INCREASE THE CONTRACT PRICE OR TO RESCIND THE CONTRACT AS REQUESTED UNLESS THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID AT, OR PRIOR TO, THE TIME OF THE AWARD. THERE IS NO EVIDENCE IN THE RECORD TO INDICATE THAT THE CONTRACTING OFFICER HAD EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF THE MISTAKE PRIOR TO AWARD SINCE HE WOULD HAVE NO REASON TO SUSPECT ERROR WHERE THE LOW BID WAS IN LINE WITH THE BIDDER'S CONTEMPORANEOUS PRIOR BIDS, THE GOVERNMENT ESTIMATE, AND CONCURRENT BIDS ON SIMILAR PROCUREMENTS. THUS THE ACCEPTANCE OF THE LOW BID CONSUMMATED A VALID AND BINDING CONTRACT FIXING THE RIGHTS AND LIABILITIES OF THE PARTIES FROM WHICH OUR OFFICE MAY NOT GRANT RELIEF. B-179725, OCTOBER 30, 1973; B- 178813, JULY 13, 1973.