Request for Contract Modification

A company requested a modification of its contract awarded by the General Services Administration for the sale of various lots of tungsten ores and concentrates from the national stockpile. The solicitation required bidders to specify the items desired, including any alternates, by item and lot numbers, and to specify the quantity and price bid per unit. The protesting company bid on one principal item and listed four alternate items in descending order of preference. The unit bid prices of the protester ranged from $126.11 for the principal item to $129.61 for the least preferred item. GSA, however, notwithstanding the company's bid for the items in descending order of preference, established a minimum acceptable price of $129.61 and made award to the protesting firm at that price. The basis of the company's protest was that GSA made an unauthorized and improper award at its highest alternate bid price in contravention of the express terms of its bid. GAO agreed with this contention and stated that where an agency's acceptance varies from the express terms of a bidder's offer, no valid contract is consummated. However, since delivery of the tungsten was already completed, rescission of the contract was no longer feasible and, therefore, the only equitable resolution was a modification of the contract. In this regard, GAO stated that GSA should not be allowed to rely on an improper and unauthorized act as the basis for obtaining money from a bidder in excess of the amount to which it would have been legally entitled had a proper award been made. Accordingly, it was concluded that the contract should be modified to reflect a contract price of $126.11 per unit.