Request for Reformation or Rescission of Contract

A firm requested reformation or rescission of its contract alleging that a mistake in the bid was discoverd after the award had been made. The General rule applicable to a mistake in bid alleged after award is that the bidder must bear the consequences of its mistake unless the mistake was mutual or the contracting officer had either actual or constructive notice of the mistake prior to the award. Here, there was no allegation or indication of mutual error or that the contracting officer had actual knowledge of the unilateral mistake, and there was only a 13 percent difference between the protester's bid and that of the second low bidder. In the case of unilateral mistakes, a valid and binding contract is consumated upon the Government's acceptance of a responsive bid unless the contracting officer knew or should have known of the probability of an error in bid, but failed to take steps to verify it. Thus, the agency's acceptance of the firm's bid constituted a valid and binding contract and GAO found no legal basis for granting the relief requested.