the integrity of the competitive bidding system." Defendants are, of course, relying on Superior Oil Co. v. Udall, 133 U.S. App. D.C. 198, 409 F.2d 1115 (1971), in which it was held that where the highest bidder for oil and gas leases which the government was offering for sale failed to sign his bid as required by the regulations, the leases should be sold to the next highest bidder. Even though this result was financially less advantageous to the government than rejecting all bids and starting over, the Court held that any other result would be "inequitable" to the second highest bidder and "damaging to the long range public interest in the integrity of the bidding process." 133 U.S. App. D.C. at 205, 409 F.2d at 1122. It based this conclusion on the fact that, by not signing its bid, Union Oil -- the high bidder -- gave itself the option of claiming the right to buy the leases (as it did) or claiming that it could not be bound because of the absence of any authorized signature. "It is not inconceivable," the Court observed, "that a high bidder in circumstances such as here who found he had made an improvident bid substantially higher than that of other bidders could well seek to exploit every arguable thesis to rid himself of the burden of what he concluded was an undesirable offer." 133 U.S. App. D.C. at 203, 409 F.2d at 1120. The agency would, of course, have no way of knowing whether the failure to sign the bid was an inadvertent omission or a tactical decision made in bad faith to gain an advantage over the other bidders.
The question for this Court is whether the integrity of the bidding process would be compromised by a determination that the telegram of June 5 is clear and convincing evidence of plaintiff's "actually intended bid" and, as such, forms the basis for permitting a bid correction pursuant to ASPR § 2.406-3(3). It is apparent that Spen had an option of sorts on June 9, when it learned that the government had not received its telegram of June 5, i.e., Spen could either let the matter drop or it could, as it did, send a confirmation copy of the telegram as dispatched and claim it to be a bid correction. However, it is equally clear that Spen had no reason to believe, when it telephoned the telegram to the Brooklyn office of Western Union, that the telegram would not be received at the designated location before bid opening. The defendants have not disputed the assertion in plaintiff's Statement of Material Facts as to Which There Is No Genuine Issue that the telephonic delivery of the telegram to Western Union's New York office "was made in sufficient time for the telegram to have been received by defendants prior to the bid opening under normal transmission conditions." Neither have defendants asserted the existence of any fact that would have put Spen on notice that the telegram might not be received in Ohio. Thus, unlike the bidder in Superior Oil, Spen had unequivocally committed itself to the bid asserted in its June 5 telegram. In such a circumstance, it is difficult to see how the integrity of the bidding process is threatened by taking the telegram to be clear and convincing evidence of Spen's "actually intended bid," meaning its bona fide intent before bid opening as opposed to an intent formed after the other bids became known.
In short, the position of the Comptroller General, which has been adopted by the agency, seems clearly arbitrary and capricious in the light of the language and purposes of ASPR § 2.406-3(3) and 10 U.S.C. § 2305(c). However, it must be reiterated that this Court is not passing on the validity in general of the principles which the Comptroller General has developed in connection with cases of asserted bid mistakes. The decision in the present action is strictly confined to these facts: the agency has found clear and convincing evidence of mistake; the assertion of the "actually intended bid" was made unequivocally before bid opening in circumstances which would lead the bidder reasonably to believe he would be bound by his asserted intent; and the bidder's bid as corrected does not displace a lower bid.
As just indicated, a determination that there is clear and convincing evidence of mistake is one of the prerequisites to bid correction. It seems plain from the record that the agency and the Comptroller General found such evidence as to items 1-4, the 67 production units originally priced at $6,000 each. It is also clear from the record herein that the agency originally took the position that there was no clear and convincing evidence of mistake as to item 5. The reasoning of the Contracting Officer in support of this position was as follows:
Although the telegram of 5 June 1972 establishes that Henry Spen intended to increase the total price of CLIN 0005 by $9,437, the evidence is not clear and convincing that the original bid of $12,500 on CLIN 0005 was in fact occasioned by a mistake. In paragraph 10 of the above-mentioned affidavit, Mr. Parker alleges that it was discovered on 5 June 1972 that the cost of the preproduction unit to be delivered and some 200 labor hours consumed in testing were omitted from the price of CLIN 0005. However, the first article is not required to be delivered to the Government as such (see paragraph (e) of Clause C27) and the 200 labor hours omitted from the price of CLIN 0005 is not otherwise explained or supported, except by comparing Exhibits H, I and J.
Although the Comptroller General, referring to the bid as a whole, has held that there was sufficient evidence of mistake to permit a bid withdrawal, he nowhere reverses the agency's specific determination that there was no clear and convincing evidence of mistake as to item 5.
Moreover, by deciding the bid protest against Spen, the Comptroller General implicitly sustained the decision reached by the agency as to that portion of the bid. The Court finds nothing in the record which amounts to clear and convincing evidence of mistake as to item 5, and a fortiori it finds nothing to suggest that the decision not to permit correction as to item 5 was arbitrary or capricious.
Accordingly, it is by the Court this 10th day of February, 1973,
Ordered that defendants' motion for summary judgment be, and the same hereby is, denied; and it is further
Ordered that plaintiff's cross-motion for partial summary judgment be, and the same hereby is, granted in part; and it is therefore further
Ordered that, if plaintiff does not avail itself of its option to withdraw its bid submitted in response to IFB 700-72-B-2207, then defendants and their officers, servants, agents and employees be, and they hereby are, directed to consider for award on IFB 700-72-B-2207 the bid of the plaintiff set forth in plaintiff's bid submitted June 2, 1972, as corrected on items 1-4 by plaintiff's telegram dated June 5, 1972, annexed as Exhibit K to Exhibit A of the verified complaint; and it is further
Ordered that the defendants and their officers, servants, agents and employees be and they hereby are enjoined from awarding a contract upon or considering for award under IFB 700-72-B-2207 any other bid until the further application of the parties to the Court and until the further order of the Court upon such application.