B-167678, AUG. 21, 1969
Highlights
WHERE LOW BIDDER OFFERED SAME EQUIPMENT OFFERED BY ITS DISTRIBUTOR WHO WAS THE SECOND LOW BIDDER BUT THE LOW BID WAS 26 PERCENT BELOW THAT OF NEXT BID. CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR BEFORE AWARD AND THEREFORE CONTRACT MAY BE CANCELED WITHOUT LIABILITY. JOHNSON: REFERENCE IS MADE TO A LETTER OF AUGUST 8. SOLICITATION M3-107-69 WHICH WAS OPENED ON JUNE 13. 985 AWARD OF ITEM 3 WAS MADE TO IN SINGER ON JUNE 25. IN SINGER'S TREASURER INFORMED THE CONTRACTING OFFICER BY PHONE THAT AN ERROR HAD BEEN MADE IN HIS COMPANY'S BID AND THAT ITS PRICE WAS NOT MEANT TO INCLUDE INSTALLATION OF THE MACHINE. A LETTER CONFIRMING THE CONVERSATION DATED JULY 1 STATED THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE ON THE BID FORM IN THAT A NOTE ON THE BOTTOM OF PAGE 12 OF THE BID STATING THAT ITS BID ON ITEM 5 DID NOT INCLUDE INSTALLATION SHOULD ALSO HAVE STATED THAT INSTALLATION WAS NOT INCLUDED FOR ITEM 3.
B-167678, AUG. 21, 1969
CONTRACTS - MISTAKES - CANCELLATION DECISION TO ADMINISTRATOR OF VETERANS ADMINISTRATION AUTHORIZING CANCELLATION OF CONTRACT FOR DISHWASHING MACHINES WITH THE IN SINGER MACHINE COMPANY BECAUSE OF MISTAKE. WHERE LOW BIDDER OFFERED SAME EQUIPMENT OFFERED BY ITS DISTRIBUTOR WHO WAS THE SECOND LOW BIDDER BUT THE LOW BID WAS 26 PERCENT BELOW THAT OF NEXT BID, CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR BEFORE AWARD AND THEREFORE CONTRACT MAY BE CANCELED WITHOUT LIABILITY.
TO MR. JOHNSON:
REFERENCE IS MADE TO A LETTER OF AUGUST 8, 1969, YOUR REFERENCE 134G, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, SUBMITTING A REQUEST PURSUANT TO SECTION 1-2.406-4 (I) OF THE FEDERAL PROCUREMENT REGULATIONS THAT AN AWARD OF AN UNNUMBERED CONTRACT ON PURCHASE ORDER 69-MC-30406 TO THE IN SINGER MACHINE COMPANY BE CANCELED BECAUSE OF A MISTAKE IN THAT COMPANY'S BID.
SOLICITATION M3-107-69 WHICH WAS OPENED ON JUNE 13, 1969, LISTED FIVE ITEMS OF DISHWASHING MACHINES FOR DELIVERY TO DIFFERENT LOCATIONS. FOUR FIRMS BID ON ITEM 3, A COMMERCIAL DISHWASHING MACHINE, INCLUDING INSTALLATION AT THE VETERANS ADMINISTRATION HOSPITAL, BRONX, NEW YORK. THE ABSTRACT OF BIDS REVEALED THE FOLLOWING PRICES:
BIDDER PRICE
THE IN SINGER MACHINE COMPANY $1,631
KESSEL KITCHEN EQUIPMENT CO., INC. 2,264
IDEAL RESTAURANT SUPPLY CO., INC. 2,730
DEVIN PRODUCTS CO. 2,985 AWARD OF ITEM 3 WAS MADE TO IN SINGER ON JUNE 25, 1969.
ON JUNE 30, 1969, IN SINGER'S TREASURER INFORMED THE CONTRACTING OFFICER BY PHONE THAT AN ERROR HAD BEEN MADE IN HIS COMPANY'S BID AND THAT ITS PRICE WAS NOT MEANT TO INCLUDE INSTALLATION OF THE MACHINE. A LETTER CONFIRMING THE CONVERSATION DATED JULY 1 STATED THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE ON THE BID FORM IN THAT A NOTE ON THE BOTTOM OF PAGE 12 OF THE BID STATING THAT ITS BID ON ITEM 5 DID NOT INCLUDE INSTALLATION SHOULD ALSO HAVE STATED THAT INSTALLATION WAS NOT INCLUDED FOR ITEM 3. THE LETTER ALSO REQUESTED CANCELLATION OF THE PREVIOUSLY MENTIONED PURCHASE ORDER.
THE CONTRACTING OFFICER IN HIS REPORT STATED THAT AT BID OPENING HE FAILED "TO ASSOCIATE THAT KESSEL KITCHEN EQUIPMENT CO., INC., BIDDING ON MODEL NO. 17 WAS THE SAME AS THE IN SINGER MACHINE COMPANY BID OF MODEL IN SINGER -COMMANDER 17.-" IN ADDITION HE STATED: "POSSIBLY WE SHOULD HAVE BEEN ON NOTICE OF ERROR BECAUSE OF KESSEL KITCHEN EQUIPMENT CO., INC., PRICE OF $2,264 VERSUS THE IN SINGER MACHINE CO., PRICE OF $1,631, A DIFFERENCE OF $633 FOR THE SAME ITEM.'
WHERE A CONTRACTING OFFICER HAS ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR PRIOR TO AWARD, ACCEPTANCE BY THE GOVERNMENT DOES NOT RESULT IN A BINDING CONTRACT AND APPROPRIATE RELIEF WILL BE ALLOWED. COMP. GEN. 575; 37 ID. 685; B-163792, APRIL 4, 1968.
IN VIEW OF THE CONTRACTING OFFICER'S OWN STATEMENT THAT HE SHOULD HAVE BEEN ON ACTUAL NOTICE OF THE POSSIBILITY OF ERROR BEFORE AWARD, AND SINCE IN SINGER'S BID WAS 26 PERCENT LESS THAN THE BID OF ITS DISTRIBUTOR (KESSEL), THE CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY TO THE BIDDER AS ADMINISTRATIVELY RECOMMENDED.