Claim of Mistake in Bid

The Department of Transportation (DOT) awarded a contract to furnish and install vinyl siding at two airports in New York to the only bidder. Since the bid was 30 percent below the Government estimate, the Government requested the firm to verify its bid. The firm did so, and was awarded the contract. Shortly thereafter, the firm alleged that it had misread as $300,000 the solicitation's requirements that the contractor procure liability insurance in the amount of $3,000,000, and that the additional coverage would cost $6,700. Although the mistake was unilateral, DOT believed that enforcement of the contract at the price of $10,500 would be unconscionable and suggested that the contract be rescinded. GAO disagreed with this view. Where the question of unconscionability is concerned, the test applied is whether the contract price is so low that the Government is "obviously getting something for nothing." In this case, GAO held that enforcement of the contract at the awarded price would not be unconscionable. Although the bid was 30 percent lower than the Government estimate, it was within the estimated price range of $10,000 to $20,000. The Government estimated only $3,000 for insurance. Finally, GAO noted that the firm offered to perform the contract at an increase of $3,500, which was $3,200 less than the alleged error. For the above reasons, GAO was of the opinion that the Government was not "obviously getting something for nothing."