B-132222, AUG. 19, 1957

B-132222, AUG. 19, 1957

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO A LETTER DATED JULY 16, 1957, WITH ENCLOSURES, FROM THE CHIEF OF PROCUREMENT, BUREAU OF FACILITIES, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR THE OLIVER CORPORATION, A. B. FARQUHAR DIVISION, YORK, PENNSYLVANIA, ALLEGES IT MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT (PURCHASE ORDER NO. 7-1 2891) DATED AUGUST 29, 1956, WAS AWARDED.

BY INVITATION NO. 1558, THE CHIEF OF PROCUREMENT, BUREAU OF FACILITIES, POST OFFICE DEPARTMENT, WASHINGTON, D.C., REQUESTED BIDS-- TO BE OPENED AUGUST 20, 1956, FOR FURNISHING TWO TYPES OF MODEL 87 AUXILIARY CONVEYORS, DELIVERY TO BE F.O.B. VARIOUS DESTINATIONS. ON PAGE 2 OF THE INVITATION IT WAS STATED THAT NINE 20-FOOT CONVEYOR UNITS AND ELEVEN 25-FOOT CONVEYOR UNITS WERE REQUIRED AND THAT THE UNITS WERE TO BE DELIVERED IN THE QUANTITIES SPECIFIED TO TWO GROUPS OF DESTINATIONS LISTED ON PAGE 3 THEREOF. IN THE GROUP COVERING THE 25 FOOT CONVEYORS, ONE CONVEYOR WAS LISTED FOR DELIVERY TO THE PTS TERMINAL, COUNCIL BLUFFS, IOWA, AND THE INDIVIDUAL QUANTITIES IN THE GROUP TOTALED 10--- ONE UNIT LESS THAN THE QUANTITY SHOWN ON PAGE 2 OF THE INVITATION. BY MEMORANDUM DATED AUGUST 15, 1956, PROSPECTIVE BIDDERS WERE ADVISED THAT THE QUANTITY OF 25-FOOT CONVEYOR UNITS SHOWN ON PAGE 3 OF THE INVITATION FOR DELIVERY TO COUNCIL BLUFFS, IOWA, SHOULD BE CHANGED FROM ONE TO TWO. IN RESPONSE THE OLIVER CORPORATION, A. B. FARQUHAR DIVISION, SUBMITTED A BID DATED AUGUST 16, 1956, OFFERING, ON PAGE 2 THEREOF, TO FURNISH NINE 20-FOOT CONVEYOR UNITS FOR THE LUMP SUM OF $8,249.77 AND ELEVEN 25-FOOT CONVEYOR UNITS FOR THE LUMP SUM OF $10,321.94, MAKING AN AGGREGATE TOTAL PRICE OF $18,571.71 FOR BOTH TYPES OF CONVEYORS. THE ABSTRACT OF THE BIDS SHOWS THAT THE TWO OTHER BIDDERS ON THE TWO TYPES OF CONVEYORS QUOTED AGGREGATE TOTAL PRICES OF $22,456 AND $29,225 AND IT IS REPORTED THAT THE GOVERNMENT'S ESTIMATE OF THE COST OF THE CONVEYORS WAS $20,000. THE BID OF THE CORPORATION WAS ACCEPTED ON AUGUST 29, 1956, AND ON THE SAME DATE, PURCHASE ORDER NO. 7-1- 2891 WAS ISSUED REQUESTING DELIVERY OF THE CONVEYORS.

THE RECORD INDICATES THAT AFTER THE OLIVER CORPORATION DELIVERED THE TWO CONVEYOR UNITS TO COUNCIL BLUFFS, IOWA, IT SUBMITTED AN INVOICE IN THE AMOUNT OF $1,179.12 FOR PAYMENT AND THAT BEFORE SUCH INVOICE COULD BE PAID BY THE POST OFFICE DEPARTMENT, IT SUBMITTED A "CORRECTED" INVOICE IN THE AMOUNT OF $2,118, OR FOR AN INCREASE OF $938.88; AND THAT THE "CORRECTED" INVOICE WAS RETURNED TO THE CORPORATION BY THE POST OFFICE DEPARTMENT WITH A NOTE TO THE EFFECT THAT ONLY THE ORIGINAL INVOICE WOULD BE PAID.

IN A LETTER DATED FEBRUARY 19, 1957, IN WHICH HE REFERRED TO THE CORPORATION'S "CORRECTED" INVOICE, MR. F. L. HARRISON, ASSISTANT MANAGER- CONVEYOR DEPARTMENT, STATED:

"IN AN EFFORT TO EXPLAIN WHERE THIS ERROR OCCURRED, IT IS NECESSARY TO START WITH THE ORIGINAL INVITATION. ON THE SECOND PAGE UNDER "SUPPLIES OR SERVICES" WERE LISTED:---

20 FT. LONG UNITS - NINE

25 FT. LONG UNITS - ELEVEN

HOWEVER, ON THE BREAKDOWN OF THE DESTINATIONS ON PAGE THREE THERE WERE ONLY TEN (10) SHOWN FOR THE 25 FT. LONG UNITS.

"ATTACHED TO SUBSTANTIATE THIS REQUEST ARE BOTH THE COPY OF THE WRITER'S MEMO TO OUR TRAFFIC MANAGER, RICHARD THOMAS, AND THE SUMMARY SHEET WITH TOTALS. ON THE MEMO TO THE TRAFFIC DEPARTMENT YOU WILL NOTE THEY CHANGED THE QUANTITY FROM ONE TO TWO MACHINES ON THE LAST ITEM COVERING CONVEYORS FOR COUNCIL BLUFF. ON THE SUMMARY SHEET THE FREIGHT INCLUDED TWO CONVEYORS, WHEREAS THE BASE PRICE WAS BASED ON ONLY ONE MACHINE.'

BY LETTER DATED JUNE 14, 1957, ADDRESSED TO OUR OFFICE, THE OLIVER CORPORATION REQUESTED THAT THE CONTRACT PRICE OF THE 25-FOOT CONVEYOR UNITS BE INCREASED BY $938.88 TO COVER THE BASE COST OF ONE OF THE TWO CONVEYOR UNITS SHIPPED TO COUNCIL BLUFFS, IOWA, WHICH, IT ALLEGED, WAS NOT INCLUDED IN ITS BID PRICE. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED A COPY OF A MEMORANDUM DATED AUGUST 15, 1956- - THE SAME DATE ON WHICH THE AMENDMENT TO THE INVITATION WAS ISSUED--- FROM FRANK HARRISON, ASSISTANT MANAGER-CONVEYOR DEPARTMENT, TO RICHARD THOMAS, TRAFFIC MANAGER, IN WHICH MR. HARRISON ADVISED MR. THOMAS THAT HE HAD "RECEIVED INVITATION TO BID ON YESTERDAY ON 19 MODEL 87 POST OFFICE CONVEYORS.' IN HIS MEMORANDUM, MR. HARRISON INDICATED THAT THERE WERE "NINE 20-FT UNITS" AND "TEN 25-FT UNITS" AND HE LISTED THE VARIOUS DESTINATIONS AND INDIVIDUAL QUANTITIES AS SHOWN ON PAGE 3 OF THE ORIGINAL INVITATION. AN EXAMINATION OF THE MEMORANDUM INDICATES THAT THE TOTAL QUANTITY OF 25-FOOT UNITS WAS CHANGED FROM ,TEN" TO "ELEVEN," AND THAT THE QUANTITY TO BE SHIPPED TO COUNCIL BLUFFS, IOWA, WAS CHANGED FROM ,1" TO "2," AND THAT THE CORPORATION ESTIMATED THAT THE TOTAL FREIGHT CHARGES ON THE TWO 25-FOOT CONVEYOR UNITS TO BE SHIPPED TO COUNCIL BLUFFS, IOWA, WOULD BE $240.24. IN HIS LETTER OF FEBRUARY 19, 1957, MR. HARRISON STATED THAT THE QUANTITY CHANGES ON THE MEMORANDUM WERE MADE BY MR. THOMAS OF THE TRAFFIC DEPARTMENT. THE CORPORATION ALSO SUBMITTED ITS ORIGINAL SUMMARY ESTIMATE SHEET ON THE 20-FOOT AND 25-FOOT CONVEYOR UNITS. THE DESTINATIONS LISTED ON THE SUMMARY ESTIMATE SHEET WERE BROKEN DOWN INTO A "20-FOOT" GROUP AND A "25-FOOT" GROUP AND UNDER THE "25-FOOT" GROUP THERE IS SHOWN, AMONG OTHERS, THE FOLLOWING ENTRY: "QUANTITY--- 2; DESTINATION-- - COUNCIL BLUFFS, IOWA; BASE PRICE EACH INCLUDING CRATING--- $938.88; TOTAL PRICE F.O.B. YORK INCLUDING CRATING--- $938.88; TOTAL FREIGHT--- $240.24; AND TOTAL PRICE--- $1,179.12.' THE CORRECT AMOUNT FOR EXTENSION TO THE "TOTAL PRICE F.O.B. YORK INCLUDING CRATING" COLUMN IS $1,877.76--- TWICE THE AMOUNT SHOWN THEREIN FOR THAT ITEM. THE RECORD SHOWS THAT EXCEPT FOR THE ERROR THE CORPORATION'S TOTAL BID PRICE FOR THE ELEVEN 25- FOOT CONVEYOR UNITS WOULD HAVE BEEN IN THE AMOUNT OF $11,260.82--- $938.88 MORE THAN ITS ORIGINAL BID PRICE.

IT IS NOTED FURTHER THAT ON PAGE 2 OF THE ORIGINAL INVITATION, PROSPECTIVE BIDDERS WERE REQUIRED TO INSERT A LUMP SUM PRICE FOR FURNISHING ELEVEN 25-FOOT CONVEYOR UNITS TO THE DESTINATIONS LISTED ON PAGE 3 THEREOF. CONSEQUENTLY, IN ORDER TO HAVE MADE A PROPER BID ON THE CONVEYOR UNITS, IT WAS ESSENTIAL THAT THE LIST OF DESTINATIONS ON PAGE 3 OF THE INVITATION BE EXAMINED PRIOR TO SUBMITTING A BID. THE RECORD INDICATES THAT ON AUGUST 15, 1956--- THE DAY ON WHICH THE AMENDMENT TO THE INVITATION WAS ISSUED--- MR. HARRISON, ASSISTANT MANAGER--- CONVEYOR DEPARTMENT, COPIED FROM PAGE 3 OF THE INVITATION THE VARIOUS DESTINATIONS AND THE QUANTITIES SHOWN THEREON INCLUDING THE ERRONEOUS QUANTITY SHOWN FOR COUNCIL BLUFFS, IOWA, AND THAT HE THEN TRANSMITTED SUCH LIST TO MR. THOMAS OF THE TRAFFIC DEPARTMENT, WHO, IT APPEARS AT THE TIME OF COMPUTING THE APPLICABLE FREIGHT CHARGES WAS AWARE THAT THE QUANTITY OF 25-FOOT CONVEYOR UNITS TO BE SHIPPED TO COUNCIL BLUFFS, IOWA, HAD BEEN CHANGED FROM "1" TO "2.' THE RECORD DOES NOT INDICATE WHO PREPARED THE SUMMARY ESTIMATE SHEET FROM WHICH IT APPEARS THE TOTAL BID PRICE FOR THE 25-FOOT CONVEYOR UNITS WAS COMPUTED. WE ARE OF THE OPINION THAT THE GOVERNMENT CONTRIBUTED TO THE MISTAKE MADE BY THE CORPORATION BY INCORRECTLY STATING ON PAGE 3 OF THE ORIGINAL INVITATION THE QUANTITY OF CONVEYOR UNITS TO BE SHIPPED TO COUNCIL BLUFFS, IOWA.

ACCORDINGLY, AN ADDITIONAL PAYMENT OF $938.88 IS AUTHORIZED TO BE MADE TO THE OLIVER CORPORATION, A. B. FARQUHAR DIVISION, FOR THE QUANTITY OF 25- FOOT CONVEYOR UNITS DELIVERED BY THE CORPORATION.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE PAYMENT AUTHORIZED HEREIN.