B-142981, DEC. 6, 1960

B-142981, DEC. 6, 1960

TO E. R. QUESADA, ADMINISTRATOR, FEDERAL AVIATION AGENCY:

IN OUR DECISION B-142981, JULY 13, 1960, WE HELD THAT CONTRACT NO. FA-530 DATED DECEMBER 23, 1959, AWARDED TO COMPUTER SYSTEMS, INC., COULD NEITHER BE CANCELED NOR REFORMED TO PROVIDE FOR AN INCREASE IN THE CONTRACT PRICE. THE CONTRACTOR, BY LETTER OF SEPTEMBER 21, 1960, HAS REQUESTED RECONSIDERATION OF THE MATTER ON THE BASIS THAT THE FACTS STATED IN OUR DECISION WERE NOT ENTIRELY CORRECT.

NOTWITHSTANDING THAT THE EARLIER DECISION WAS ADDRESSED TO YOU WE DEEM IT APPROPRIATE TO CONSIDER THE REQUEST FOR RECONSIDERATION FROM THE CONTRACTOR, SINCE THE FIRST SUBMISSION APPEARS TO HAVE BEEN MADE AT THE CONTRACTOR'S BEHEST.

WE HAVE RE-EXAMINED THE MATTER IN THE LIGHT OF THE ADDITIONAL INFORMATION SUBMITTED BY THE CONTRACTOR IN HIS LETTER OF SEPTEMBER 21, AND BY THE FEDERAL AVIATION AGENCY IN A LETTER OF OCTOBER 11, 1960, FROM THE CHIEF, MATERIEL CONTRACTS BRANCH. SCHEDULE II OF INVITATION NO. O-2031B1, DATED SEPTEMBER 4, 1959, CALLED FOR BIDS FOR TRANSISTORIZED DUAL-DUAL CHANNEL AMPLIFIER ASSEMBLIES AND ASSOCIATED ITEMS IN QUANTITIES OF 100, 250, 500 AND 1,000. UPON OPENING ON OCTOBER 1, 1959, IT WAS FOUND THAT COMPUTER SYSTEMS, INC., HAD SUBMITTED THE SECOND LOW BID FOR THE ITEM IN THE QUANTITY TO BE PROCURED. THE LOWER BID WAS REJECTED FOR REASONS WHICH NEED NOT BE CONSIDERED HERE. IN A LETTER OF MAY 20, 1960, FROM THE DIRECTOR, BUREAU OF FACILITIES AND MATERIEL, WE WERE ADVISED THAT THE BID SUBMITTED BY COMPUTER SYSTEMS FOR THE LOWEST QUANTITY WAS GENERALLY IN LINE WITH THE OTHER BIDS. HOWEVER, THE CONTRACTING OFFICIALS NOTED THAT WITH RESPECT TO THE HIGHER QUANTITIES, FOR WHICH THE CONTRACT WAS IN FACT AWARDED, THE PRICES SUBMITTED BY COMPUTER SYSTEMS WERE CONSIDERABLY LOWER.

ON DECEMBER 4, 1959, REPRESENTATIVES OF FAA VISITED THE CONTRACTOR'S FACILITIES IN NEW YORK TO DISCUSS THE BID AND TO DETERMINE THE ADEQUACY OF THE BIDDER'S FACILITIES TO SUCCESSFULLY EXECUTE THE CONTRACT. IN THE COURSE OF THE VISIT THE REPRESENTATIVES OF FAA ADVISED THE BIDDER THAT THE CONTRACT INCLUDED PREPARATION OF CERTAIN MANUALS. ALTHOUGH THE BID HAD BEEN BASED ON HAVING ONLY TO REPRODUCE ALREADY PREPARED MANUALS IT WAS DECIDED BY OFFICIALS OF COMPUTER SYSTEMS TO DISREGARD THIS FAILURE AND ABSORB THE UNANTICIPATED COST IN THE REGULAR CONTRACT PRICE. IT NOW APPEARS FROM THE NEW INFORMATION FURNISHED THAT WHILE THE ABSTRACT OF BIDS WAS MADE AVAILABLE TO THE BIDDER'S REPRESENTATIVES FOR INSPECTION, THE FACT THAT THE BID SUBMITTED BY COMPUTER SYSTEMS APPEARED OUT OF LINE AS TO THE HIGHER QUANTITIES, AS NOTED IN THE CITED LETTER OF MAY 20, WAS NEVER BROUGHT SPECIFICALLY TO THE ATTENTION OF THE BIDDER'S REPRESENTATIVES.

BASED ON THE INSPECTION, IT WAS DETERMINED THAT THE BIDDER'S FACILITIES WERE ADEQUATE AND AWARD WAS MADE TO THAT FIRM ON DECEMBER 23, 1959. LETTER OF APRIL 28, 1960, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT THE BID ON SCHEDULE II WAS FOUND TO BE IN ERROR BECAUSE THE PRICE COMPUTATIONS WERE INADVERTENTLY BASED ON DUAL RATHER THAN DUAL-DUAL CHANNEL EQUIPMENT. IT WAS FURTHER STATED THAT THE ERROR WAS NOT NOTED BY THE CONTRACTOR UNTIL SOMETIME IN MARCH, MORE THAN TWO MONTHS AFTER THE DATE OF AWARD. THE CONTRACTOR REQUESTED, IN VIEW OF THE ERROR, THAT EITHER THE CONTRACT BE CANCELED OR REFORMED TO PROVIDE FOR INCREASED COMPENSATION. THE MATTER WAS SUBMITTED TO US AND BASED ON OUR UNDERSTANDING OF THE FACTS DERIVED FROM THE INFORMATION THEN PRESENTED, WE CONCLUDED THAT THE CONTRACTOR PRIOR TO AWARD WAS IN EFFECT REQUESTED TO VERIFY THE BID PRICES AND WAS GIVEN AMPLE OPPORTUNITY TO CHECK THE COMPUTATIONS UPON WHICH THE BID PRICE WAS DETERMINED. IT NOW APPEARS HOWEVER THAT THE PRIOR UNDERSTANDING WAS NOT CORRECT AND THAT WHILE THE POSSIBILITY OF ERROR GENERALLY WAS BROUGHT TO THE BIDDER'S ATTENTION PRIOR TO AWARD, THE PARTICULAR DISCREPANCY WHICH WAS NOTED BY THE CONTRACTING OFFICIALS AS OUT OF LINE WITH THE OTHER BIDS AND WITH COMPUTER SYSTEMS' BID FOR THE LOWER QUANTITIES, WHICH APPARENTLY GAVE RISE TO A SUSPICION OF ERROR ON THE PART OF THE CONTRACTING OFFICIALS, WAS NOT SPECIFICALLY BROUGHT TO THE ATTENTION OF COMPUTER SYSTEMS. WHEN, AS IN THIS SITUATION, THE CONTRACTING OFFICER SUSPECTS ERROR HE SHOULD SPECIFICALLY ADVISE THE BIDDER OF THE EXACT NATURE OF THE ERROR SUSPECTED AND REQUEST VERIFICATION. WHEN HE FAILS TO DO SO AN ATTEMPTED AWARD ON THE BASIS OF THE BID AS SUBMITTED CONTAINING THE SUSPECTED ERROR IS INVALID. UNITED STATES V. METRO NOVELTY MANUFACTURING CO., INC., 125 F.SUPP. 713; 35 COMP. GEN. 136. CF. 39 COMP. GEN. 405.

THE VALIDITY OF THE INTENDED PRICE PUT FORTH BY THE CONTRACTOR IS DISPUTED BY THE CONTRACTING OFFICER AND FURTHER HAS NOT BEEN CONCLUSIVELY ESTABLISHED BY THE COMPETENT EVIDENCE NECESSARY TO PERMIT CORRECTION OF THE BID. 35 COMP. GEN. 279, 281. IN ACCORDANCE WITH THE FOREGOING, THE CONTRACT PRICE MAY NOT BE MODIFIED BUT THE AWARD TO COMPUTER SYSTEMS, INC., SHOULD BE WITHDRAWN.