B-181596, OCT 22, 1974

B-181596, OCT 22, 1974

AWARD FOR SURPLUS PROPERTY SHOULD HAVE BEEN MADE TO HIGH BIDDER WHEN IT WITHDREW ALLEGATION OF ERROR AND REQUESTED AWARD AT ORIGINAL PRICE PER POUND AFTER IT WAS DETERMINED THAT THERE WAS NO CLEAR AND CONVINCING EVIDENCE OF ALLEGED LOWER INTENDED PRICE, SINCE BIDDER WOULD HAVE BEEN HIGHEST BIDDER EVEN IF INTENDED BID COULD HAVE BEEN PROVEN FOR BID CORRECTION PURPOSES AND NO PREJUDICE TO OTHER BIDDERS WOULD HAVE THEREFORE RESULTED.

ARKAY PRODUCTS CORPORATION:

ARKAY PRODUCTS CORPORATION (ARKAY) PROTESTED THE REJECTION OF ITS BID FOR ITEM 97 IN SALES INVITATION FOR BIDS NO. 41-4298, ISSUED BY THE DEFENSE PROPERTY DISPOSAL REGION (DPDR), DEFENSE DEPOT OGDEN STATION.

AT THE BID OPENING, SEVEN BIDS WERE RECEIVED FOR ITEM 97, WHICH CONSISTED OF 25,580 POUNDS OF COTTON SCRAP. THE BIDS ON A UNIT PRICE/TOTAL PRICE BASIS RANGED FROM $0.0239/$611.36 TO THE THREE HIGHEST OF $0.4235/$10,833.13, $0.4751/$12,153.06, AND $0.63693/$16,292.67.

THE NEXT DAY ARKAY ADVISED THE CONTRACTING OFFICER THAT ITS HIGH BID OF $0.63693 HAD BEEN SUBMITTED BY MISTAKE AND THAT IT HAD INTENDED TO BID $0.53693. THE ERROR IN BID WAS ALLEGED TO HAVE OCCURRED WHEN THE DIGIT 6, INSTEAD OF 5, WAS PRESSED ON AN ADDING MACHINE DURING THE COMPUTATION OF THE BID AND WAS CARRIED ONTO THE BID. IN SUPPORT OF THE ALLEGATION, ARKAY FURNISHED AN ADDING MACHINE TAPE WHICH SHOWS THAT THE DIGITS 63693 WERE USED IN SUCH A FASHION AS TO ARRIVE AT A TOTAL OF 162926694. AS NOTED ABOVE, THE TOTAL PRICE BID BY ARKAY WAS $16,292.67. IN ADDITION, ARKAY FURNISHED A COPY OF THE IFB IT USED AS A WORKSHEET. FOR ITEM 97, THERE IS WRITTEN .53693. ARKAY REQUESTED THAT THE UNIT PRICE BID BE CORRECTED TO $0.53693.

THE REQUEST WAS CONSIDERED BY THE DEFENSE PROPERTY DISPOSAL SERVICE (DPDS) WHICH NOTED THAT THE ARKAY UNIT AND TOTAL PRICES BID FOR ITEM 97 WERE INCONSISTENT WITH THE 25,580-POUND QUANTITY ADVERTISED FOR SALE AND THAT THE BID WOULD BE HIGH WHETHER CORRECTED OR NOT. THE DPDS DETERMINED THAT THERE WAS CLEAR AND CONVINCING EVIDENCE OF AN ERROR IN BID, BUT NOT AS TO THE INTENDED BID. THEREFORE, IT WAS DECIDED THAT THE ARKAY BID COULD BE WITHDRAWN AND NOT CORRECTED.

AFTER THE DECISION WAS MADE, ARKAY WITHDREW THE ALLEGATION OF MISTAKE AND REQUESTED THAT AN AWARD BE MADE TO IT AT THE $0.63693 BID PRICE PER POUND. DPDS DENIED THE REQUEST RELYING UPON THE FOLLOWING STATEMENT IN 42 COMP. GEN. 723, 725 (1963):

"IN THE PRESENT CASE RAMIREZ, BY REASON OF ITS OWN MISTAKE, COULD CHOOSE AFTER THE OTHER BIDS WERE DISCLOSED BETWEEN WITHDRAWING ITS BID ON THE GROUND OF MISTAKE, SEEKING CORRECTION THEREOF, OR STANDING ON THE ERRONEOUS BID, AS SEEMED TO BE IN ITS BEST INTEREST. IT NOW SEEKS, AFTER CORRECTION HAS BEEN DENIED, TO WAIVE ITS UNDOUBTED RIGHT TO WITHDRAW, AND ASKS TO RECEIVE AN AWARD ON THE BASIS OF ITS ERRONEOUS BID. WE BELIEVE ACCEPTANCE OF RAMIREZ' ADMITTEDLY ERRONEOUS BID UNDER THE CIRCUMSTANCES IN THIS CASE WOULD BE CONTRARY TO THE PRINCIPLES OF COMPETITIVE BIDDING AND DETRIMENTAL TO THE PURPOSES SOUGHT TO E ACHIEVED BY THE FEDERAL PROCUREMENT STATUTES."

HOWEVER, IN THE DECISION, OUR OFFICE WENT ON TO STATE:

"IF THE EVIDENCE WERE CLEAR AND CONVINCING THAT RAMIREZ WOULD HAVE BEEN THE LOWEST BIDDER (HIGHEST IN THE SALE OF SURPLUS PROPERTY) ABSENT ERROR IN ITS BID, EVEN THOUGH THE AMOUNT OF ITS CORRECT OR 'INTENDED' BID COULD NOT BE CLEARLY PROVEN, IT WOULD NOT BE PREJUDICIAL TO OTHER BIDDERS IF RAMIREZ RECEIVED THE AWARD. ***"

SEE ALSO 52 COMP. GEN. 706, 710-711 (1973). APPLYING THE LATTER REASONING TO THE IMMEDIATE CASE, IT IS OUR VIEW THAT, WHEN ARKAY REQUESTED IT, THE AWARD SHOULD HAVE BEEN MADE TO ARKAY ON ITEM 97 AT $0.63693 PER POUND INASMUCH AS THAT BASIS WAS THE MOST FAVORABLE TO THE GOVERNMENT AND NO PREJUDICE TO THE OTHER BIDDERS WOULD HAVE RESULTED BY THE ACCEPTANCE SINCE ARKAY WOULD HAVE BEEN THE HIGHEST BIDDER EVEN IF THE INTENDED BID COULD HAVE BEEN PROVEN FOR BID CORRECTION PURPOSES. B 17495, MAY 30, 1972.

SINCE THE AWARD FOR ITEM 97 HAS BEEN MADE TO ANOTHER BIDDER AND THE PROPERTY HAS BEEN REMOVED BY THAT BIDDER, IT WOULD NOT BE POSSIBLE TO AWARD THE ITEM TO ARKAY AT THIS TIME. HOWEVER, WE ARE BRINGING THE MATTER TO THE ATTENTION OF THE DEFENSE SUPPLY AGENCY TO PRECLUDE A RECURRENCE OF THE SITUATION IN THE FUTURE.