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Civil Resource Manual

75. Claims Of Mistakes In Bids

If the government knew or should have known of a mistake in a contractor's bid, and failed to request adequate verification of the bid price before award, the bidder may obtain reformation or rescission of the contract. See Geisler v. United States, 232 F.3d 864, 869 (Fed. Cir. 2000) (citing United States v. Hamilton Enterprises, Inc., 711 F.2d 1038 (Fed. Cir. 1983) and Ruggiero v. United States, 420 F.2d 709 (Ct. Cl. 1970)). A contracting officer who reasonably suspects or should suspect that a mistake has been made must request the bidder to verify the bid, and must inform the bidder of why the request for the verification is being made. See 48 C.F.R. § 14.407-1; Hamilton Enterprises, 711 F.2d at 1045-46 (citing "landmark case" of United States v. Metro Novelty Manufacturing Co., 125 F. Supp. 713 (S.D.N.Y. 1954)). Except where the government has breached its duty to examine the bid for mistakes, the bidder must show that its bid error resulted from a "clear cut clerical or arithmetical error, or a misreading of the specifications." Geisler, 232 F.3d at 869 (citations omitted).

[updated September 2013; cited in USAM 4-4.420]