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consideration of a 10-day discount was prohibited by paragraph 9(a), quoted above. See, also, paragraph 2-407.3(c) of the Armed Services Procurement Regulation (ASPR). As a consequence, the Fink bid was evaluated at its offered price, or $741 more than the C&S Sanitary Co. bid.
When this result was communicated to Fink, it offered to change the discount terms to 2-percent, 20 days.
Fink contends that the modification should have been accepted under ASPR 2-305 since the modification of an otherwise successful bid can be considered if it makes the terms of the bid more favorable to the Government. Fink's request was denied because it constituted a late bid modification consideration of which is barred by paragraph 8(a) of the solicitation instructions and conditions. Moreover, it is contended that the 10-day discount was such an obvious mistake on the face of Fink's bid, that the contracting officer had a duty under ASPR 2-406.1 to verify the bid, calling attention to the mistake. Lastly, it is contended that since Fink justifiably relied, to its detriment, on the contracting officer's representations, the Government is estopped to deny the existence of the contract.
Concerning the effect of ASPR 2-305, we observe that since the 10-day prompt payment discount could not be considered for evaluation purposes, Fink was never in fact the low bidder. Consequently, we agree that the late bid modification could not be relied upon to make Fink the lowest evaluated bidder.
Fink implies that it was prejudiced by the contracting officer's failure to verify promptly what was an apparent mistake on the face of the bid in offering a 10-day prompt payment discount. Specifically, Fink contends that after the June 14 opening, the contracting officer should have noted Fink's mistake and called it to its attention, citing ASPR 2-406.l. This action, it is alleged, would have made it improbable that Fink would have purchased an additional truck after receipt of the contract number.
In our opinion, the offer of a 10-day discount was not an apparent mistake which required the contracting officer to verify the bid under the provisions of ASPR 2-406.2. The offer of a 10-day discount period is not precluded by the invitation for bids nor does such an offer preclude the Goverment from taking advantage of the discount should the nondiscounted bid be low (see ASPR 2-407.3(d)).
If it is Fink's contention that either it intended a 20-day discount or that it was mistaken in believing a 10-day discount could be evaluated and would therefore have offered a 20-day discount had it properly read the IFB, we feel that no relief can be granted on either theory. ASPR 2–406.3(a)(3) states:
"(3) Where the bidder requests permission to correct a mistake in his bid and clear and convincing evidence establishes both the existence of a mistake and the bid actually intended, a
determination permitting the bidder to correct the mistake
"(4) Where the evidence is not clear and convincing that
In the present case, even if we assume that a mistake has been proven, we can find no evidence on the face of the bid as to the actual intention of the bidder. Such evidence is required to displace a lower bidder. See 52 Comp. Gen. 604 (1973); B-174460, April 27, 1972; and B-164584, October 4, 1968. Thus, Fink cannot now substitute an acceptable discount term to make lower its evaluated bid price.
Regarding the issue of estoppel, we note that the Court of Claims in Emeco Industries, Inc. v. United States, No. 547-71, October 17, 1973, has recently reasserted the four elements propounded in United States v. GeorgiaPacific Company, 421 F. 2d 92 (9th Cir. 1970), that must be present in order to establish an estoppel:
1) the party to be estopped must know the facts;
2) he must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe it is so intended;
3) the latter must be ignorant of the true facts;
4) he must rely on the former's conduct to his injury.
The present situation, however, differs from that set our in Emeco. There the Government was aware of all of the true facts when it acted so as to induce Emeco into acting to its detriment. In the instant case, as of June 25, the date of the Government's allegedly inducing actions, the produring activity, by its own misfeasance, was not aware of the true facts. We believe that this mistake should not, however, be a basis for relieving the Government of liability, See 52 Comp. Gen. 215, 218 (1972).
In reasonably reconstructing the events of June 25, 1973, we feel that both parties left the meeting held on that day believing that Fink Sanitary
Service should be the party performing refuse collection and disposal services commencing July 1. 1973. Indeed, we believe that the Government also was aware of Fink's plans to purchase an additional truck to accomplish this contract.
The agency's actions in giving the contract number to the apparent low bidder (whose status, known to the other bidder, had not protested although known for a week) just 6 days prior to the commencement of the contract period is, we believe, an action which a reasonable bidder has a right to believe was intended for it to act upon--here to prepare for commencement of the contract.
We further believe that at the time Fink acted to its detriment in reliance upon the actions of the Government, the bidder was ignorant of the true facts—that actual award to Fink Sanitary Service was impossible since it was not in fact the lowest responsive bidder to the IFB.
In sum, we find that Fink has met the criteria set forth in Emeco and that the Government should be estopped to deny the existence of a contract between itself and Fink. However, the nature of the agreement so reached must be examined to determine the Government's liability, if any, for its failure to comply with the agreement.
In Emeco, the Court of Claims did not address itself to the important problem inherent in holding the Government liable on a contract which its agent (the contracting officer), as in the instant case, had no authority to enter. Emeco was not the lowest responsive, responsible offeror on the portion of the solicitation to which estoppel was applied. Neither, in fact,
, was Fink low bidder on this procurement. The general rule is that the contracting officer has no authority to award a contract to other than the lowest responsive, responsible offeror and that an award to another party is illegal. B-162535, October 13, 1967; B-149466, July 27, 1962; 38 Comp. Gen. 368 (1958). In such circumstances, the injured party is entitled only to the value of the goods and services provided to the Government on a theory of quantum meruit. B-149466, 38 Comp. Gen., supra.
However, in 52 Comp. Gen., supra, at page 218, we stated that:
"* * * We are in agreement with the position of the
F. 2d 400 (187 Ct. cl. 627), then the award may be canceled
Therefore, since in the instant case Fink neither directly contributed to the mistake upon which its bid was evaluated nor was it on direct notice prior to the "award" that a mistake had been made (also a requirement for estoppel), we are unable to say that such an "award", while improper, was plainly or palpably illegal. The agreement entered into between the Government and Fink is merely terminable for the convenience of the Government and not void ab initio.
Accordingly, we conclude that the contract, improperly "awarded" to Fink on June 25, 1973, although not illegal, should be terminated for the convenience of the Government since "award" was made to other than the lowest responsive bidder.
As this decision contains a recommendation for corrective action to be taken, it is being transmitted by letters of today to the congressional committees named in section 232 of the Legislative Reorganization Act of 1970, Public Law 91-510.