Tales from the National Appeal Chamber: Can a discrepancy in a bid price between figures and words be treated as a typographical error? | In Principle

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Tales from the National Appeal Chamber: Can a discrepancy in a bid price between figures and words be treated as a typographical error?

Sometimes typos occur when preparing bid documents, and can be corrected by the contracting authority if the contractor provides the required clarification. But not all mistakes can be cured, especially those concerning the bid price, as they directly affect the contractor’s position in the ranking. An example of such a mistake is when a price is given in figures and then restated differently in words. The National Appeal Chamber explained in its ruling of 1 June 2021 (case no. KIO 1040/21) why such a mistake cannot be corrected.

After opening the bids in a public procurement procedure, the contracting authority published information showing that one of the contractors had submitted a bid with a price of “PLN 1,550,000.00 (one million seven hundred ninety-nine thousand 0/100 zlotys).” To resolve this apparent discrepancy, the contracting authority called on the contractor to provide an explanation, including to clarify which of the prices in the bid form was binding. In response, the contractor indicated that its bid price was PLN 1,550,000 gross. As this was the lowest price in the procedure, the contracting authority selected the offer as the most advantageous.

Another contractor disagreed with the decision of the contracting authority and appealed to the National Appeal Chamber. It pointed out that at the time of the explanation, the contractor knew the prices of the other bids submitted in the procedure, in particular the second-ranked bid (PLN 1,793,300), and therefore, with this knowledge, indicated the lower amount as its bid price. As a consequence, the contracting authority committed a breach of law, as it should not have called on the contractor for clarification and treated the discrepancy as a mere typographical error, but should have rejected its bid and selected the second-ranking bidder. The appellant pointed out that the difference between the price expressed in words and the price expressed in figures was so big that it could not be ruled out that the bidder deliberately included two prices in the bid, so that, after consulting the other bids, it could indicate as the correct value the one that would be more advantageous for itself.

The contractor submitted two bids

The chamber found that submitting a bid differing depending on the type of notation (in figures or in words) can be treated as submitting de facto two independent bids. Thus, after the offers were opened, and examining the bids offered by other contractors, the contractor could choose the price allowing it to obtain the contract. In the opinion of the chamber, the offer did not reveal any information from which it could conclude that there was certainly a mistake that could be corrected, or enabling an unequivocal determination of which of the prices was the correct price.

It is clear from Art. 218(1) of the Public Procurement Law that each contractor may submit only one bid. This means that if a contractor has directly or indirectly submitted two different prices to the contracting authority for the same contract, its action may be treated as contrary to the law. As a consequence, the bid should be rejected under Art. 226(1)(3), pursuant to which the contracting authority shall reject a bid if it does not comply with the law. This is the position taken by the chamber, which held: “Since the contractor … submitted two bids in the procedure, it is not compliant with Art. 218(1) of the Public Procurement Law, and thus the contractor’s bid is rejected pursuant to Art. 226(1)(3).”

This effect should occur regardless of whether the contractor is regarded as submitting two bids or one variant bid. Such doubts may arise because the contractor has submitted one bid form indicating two different prices. But regardless of what we call the contractor’s actions, it had the opportunity to select one of the prices in the bid form after opening of the bids and reading out the other contractors’ prices. This violates the basic principle of public procurement described in Art. 16 of the law, that the contracting authority shall prepare and conduct the public procurement procedure in a manner ensuring fair competition and equal treatment of contractors, and in a transparent and proportionate manner. According to the chamber, “In a situation where a contractor has the opportunity to choose its price after opening of the bids and learning the prices of other contractors, this definitely constitutes a violation of the principle of equal treatment of contractors, as it puts one contractor in a privileged, different and much more advantageous position than other contractors.”

The contracting authority should not request clarification from the contractor

In view of the above, the contracting authority was not entitled to call on the contractor to submit an explanation. As the chamber pointed out, in this situation, the contractor did not clarify its offer, but chose one of the prices, which is unacceptable and violates the principle of equal treatment of contractors. Besides, there was no mistake in the contractor’s bid, but a bid with an alternative price, which is an irremovable error in the bid. This means that the contracting authority had yet another basis for rejecting the bid challenged by the appellant, namely Art. 226(1)(10) of the law, indicating that the contracting authority should reject the bid if it contains errors.

By the same token, the contracting authority made an unjustified and illegal correction of an error in the bid of one of the contractors in a situation where the prices quoted by the contractor differed in figures and words. It was most glaring that when providing an explanation, the contractor already knew the prices of other bidders, including the price of the appellant’s bid, which meant that it could choose the price more advantageous in the pending public procurement procedure.

Grasping at straws

During the hearing, the contracting authority presented various arguments in its defence. However, the chamber did not give that evidence much weight, pointing out among other things that the statement of the contracting authority at the hearing that it obtained information on the procedure from the Public Procurement Office helpline was irrelevant. In the opinion of the chamber, “It should first be noted that it is not known how the actual state of the affairs was presented by the contracting authority. Moreover, as indicated above, the contracting authority is obliged to conduct the proceedings in a transparent manner and in such a way as to ensure equal treatment of contractors, which did not occur in the case of the present procedure.”

Equally without merit were the assertions of the contracting authority regarding the amounts it had (or did not have) available to perform the contract, and arguments regarding whether to cancel the procedure due to a lack of funds to perform the contract. The chamber found that this issue was not relevant to the allegations raised by the appellant or the irregularity in the selection of the most advantageous bid by the contracting authority. As a consequence, the chamber decided to uphold the appeal and ordered the contracting authority to cancel the bid selection procedure and re-evaluate the bids, but without the rejected bid in question.

Cyprian Herl, Infrastructure, Transport, Public Procurement & PPP practice, Wardyński & Partners