Request for Contract Relief

A company claimed that it made a mistake on the unit price in its bid, resulting in a lower price than the company could produce the item for. Seven months after the award of the contract, the company notified the procuring agency of this fact and requested relief of the contract claiming that the contracting officer should have been on constructive notice of a possible mistake. The agency denied relief and requested the opinion of GAO on the matter. The general rule concerning a mistake in a bid which is alleged after the award is that the bidder must bear the consequences of a mistake unless the mistake is mutual or the contracting officer had actual or constructive notice of the error prior to award. It was held that where the spread among bid prices received was uniform, with the difference between the low and second low bid prices being only 16.5 percent, and the contracting officer believed the low bidder was already in production of the item, constructive notice of a possible mistake in the bid did not exist. Furthermore, GAO has no jurisdiction to review denial of the claim by a Government agency. Accordingly, the contract is valid and binding on all the parties thereto, and the relief requested by the company may not be granted.