B-155409, FEB. 5, 1965

B-155409, FEB. 5, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 27, 1964, WITH ENCLOSURES, FROM MR. J. E. MOODY, GENERAL COUNSEL, REPORTING ON THE CLAIM OF WINDSOR WAX COMPANY, INC., FOR AN ADDITIONAL AMOUNT OF $3,065.88 UNDER CONTRACT NO. GS-05S-1718, BECAUSE OF AN ALLEGED ERROR IN THE BID UPON WHICH THE CONTRACT WAS BASED.

INVITATION NO. CH-FT-446, ISSUED SEPTEMBER 5, 1963, REQUESTED BIDS ON VARIOUS ITEMS OF WAX AND WAX REMOVER. ITEMS 12 AND 13 COVERED ONE POUND CANS OF SLOW DRYING AUTOMOBILE WAX AND ITEMS 14 AND 15 COVERED ONE-POUND CANS OF FAST DRYING AUTOMOBILE WAX. ON OCTOBER 22, 1963, WINDSOR WAS AWARDED A CONTRACT AS LOW BIDDER ON THESE FOUR ITEMS IN THE RESPECTIVE AMOUNTS OF $0.44, $0.435, $0.42 AND $0.415 PER CAN. THE CONTRACTOR HAS ALLEGED THAT AN ERROR WAS MADE, IN THAT ITS BID PRICES WERE BASED ON A 7- OUNCE CAN INSTEAD OF A 1-POUND CAN, AND HAS SUBMITTED A WORK SHEET WHICH INDICATES THAT AN ERROR PROBABLY WAS MADE.

HOWEVER, IN ORDER TO AUTHORIZE RELIEF IT MUST APPEAR EITHER THAT THERE WAS A MUTUAL MISTAKE OR THAT THE ERROR WAS SO APPARENT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF IT AND SOUGHT TO TAKE ADVANTAGE THEREOF. THERE IS NO EVIDENCE OF A MUTUAL MISTAKE AND THE ONLY POSSIBLE BASIS FOR CONSIDERING THAT THERE MAY HAVE BEEN CONSTRUCTIVE NOTICE WOULD APPEAR TO BE A COMPARISON OF PRICES BID.

THE SECOND LOW BIDDER ON ITEMS 14 AND 15 QUOTED PRICES OF $0.675 AND $0.665, RESPECTIVELY, AND TWO ADDITIONAL BIDS WERE RECEIVED ON ITEM 14 IN THE AMOUNTS OF $0.75 AND $0.78 AND ONE ON ITEM 15 IN THE AMOUNT OF $0.75. IT IS REPORTED THAT THE CONTRACTING OFFICER DID NOT CONSIDER A COMPARISON OF PRICES TO BE INDICATIVE OF POSSIBLE ERROR ON THE PART OF THE LOW BIDDER. HOWEVER, IN VIEW OF THE WIDE DISPARITY IN BID PRICES ON ITEMS 14 AND 15, WE BELIEVE THAT THE CONTRACTING OFFICER SHOULD HAVE VERIFIED WINDSOR'S PRICE ON THESE ITEMS, AND SINCE THE EXISTENCE OF ERROR HAS BEEN REASONABLY ESTABLISHED, PAYMENT FOR ITEMS 14 AND 15 MAY BE MADE AT PRICES NO HIGHER THAN THOSE OF THE NEXT LOW BIDDER, AS ADMINISTRATIVELY RECOMMENDED.

ON ITEMS 12 AND 13 WINDSOR BID $0.44 AND $0.435, RESPECTIVELY. REGO LABORATORIES, INC. (WHO DID NOT BID ON ITEMS 14 AND 15), SUBMITTED THE SECOND LOW BIDS ON ITEMS 12 AND 13 IN AMOUNTS OF $0.475 AND $0.470, AND THE REMAINING TWO BIDDERS SUBMITTED PRICE OF $0.605 AND $0.69 ON ITEM 12 AND $0.595 AND $0.68 ON ITEM 13. WHILE IT MAY WELL BE ARGUED THAT THE SMALL DIFFERENCE OF 3 1/2 CENTS PER CAN BETWEEN THE LOW AND SECOND LOW BIDS ON ITEMS 12 AND 13 WOULD PRECLUDE CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF ERROR IN THE LOW BID, WE HAVE BEEN INFORMALLY ADVISED THAT THE ONLY MATERIAL DIFFERENCE BETWEEN THE SLOW DRYING WAX PURCHASED UNDER ITEMS 12 AND 13 AND THE FAST DRYING WAX PURCHASED UNDER ITEMS 14 AND 15 IS THAT THE SLOW DRYING WAX CONTAINS SILICONE. IT WOULD THEREFORE APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE EXPECTED TO RECEIVE UNIT BID PRICES ON ITEMS 12 AND 13 WHICH WERE ONLY A FEW CENTS HIGHER THAN THOSE OFFERED BY THE SAME BIDDER ON ITEMS 14 AND 15. INDEED, AN EXAMINATION OF THE BID PRICES SUBMITTED BY THE THREE BIDDERS WHO BID ON BOTH TYPES OF WAX INDICATES SUCH PRICES WERE HIGHER ON ITEMS 12 AND 13 THAN ON ITEMS 14 AND 15 BY AMOUNTS OF $0.02, $0.07, AND $0.09 PER CAN. VIEW OF OUR HOLDING ABOVE TO THE EFFECT THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR IN WINDSOR'S BID PRICE ON ITEMS 14 AND 15, AND THAT SUCH PRICES MAY THEREFORE BE ADJUSTED FROM $0.42 AND $0.415 TO THE NEXT LOWEST BID PRICES OF $0.675 AND $0.665 ON ON THOSE ITEMS, IT IS APPARENT THAT THE CONTRACTING OFFICER MUST ALSO BE CHARGED WITH CONSTRUCTIVE NOTICE THAT THERE WAS ERROR IN WINDSOR'S BID PRICES WHICH OFFERED TO FURNISH THE MORE EXPENSIVE WAX CALLED FOR UNDER ITEMS 12 AND 13 AT THE SUBSTANTIALLY LOWER PRICES OF $0.44 AND $0.435 PER CAN. WE MUST THEREFORE CONCLUDE THAT WINDSOR IS ALSO ENTITLED TO AN ADJUSTMENT OF ITS PRICES ON ITEMS 12 AND 13. HOWEVER, IN THE ABSENCE OF EVIDENCE THAT THE PRICES OF $0.475 AND $0.470 SUBMITTED ON THESE ITEMS BY REGO LABORATORIES WAS ALSO IN ERROR, IT MUST BE ASSUMED THAT YOUR ADMINISTRATION COULD HAVE PURCHASED FROM REGO AT THOSE PRICES IF WINDSOR HAD GIVEN TIMELY NOTICE OF ITS ERROR AND HAD BEEN PERMITTED TO WITHDRAW ITS BID. AN ADJUSTMENT OF WINDSOR'S CONTRACT PRICES ON ITEMS 12 AND 13, NOT TO EXCEED THE PRICES BID BY REGO LABORATORIES ON THESE ITEMS, WOULD THEREFORE APPEAR TO BE PROPER.

A COPY OF THIS DECISION SHOULD BE ATTACHED TO THE VOUCHER ON WHICH PAYMENT TO WINDSOR IS MADE IN ACCORDANCE WITH THE FOREGOING.