B-151019, JUN. 19, 1963

B-151019, JUN. 19, 1963

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTER MAY 29, 1963, WITH ENCLOSURES, FROM THE DEPUTY DIRECTOR OF ADJUDICATION, AIR FORCE ACCOUNTING AND FINANCE CENTER, UNITED STATES AIR FORCE, DENVER, COLORADO, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR WHICH THE GRAYBAR ELECTRIC COMPANY, INC., OKLAHOMA CITY, OKLAHOMA, ALLEGES IT MADE IN ITS QUOTATION ON WHICH NEGOTIATED CONTRACT NO. AF34/601/-13607, CALL 11, IS BASED.

IT APPEARS FROM THE RECORD THAT ON SEPTEMBER 10, 1962, ORAL QUOTATIONS WERE SOLICITED BY THE TINKER AIR FORCE BASE, OKLAHOMA, FOR FURNISHING, AMONG OTHER ITEMS, 200 FEET OF 1 1/4 IN. COPPER PIPE, ITEM 3 OF REQUEST FOR QUOTATIONS DATED AUGUST 17, 1962; THAT THE GRAYBAR ELECTRIC COMPANY, INC., ORALLY QUOTED A PRICE OF $0.4751 PER FOOT FOR THE COPPER PIPE; AND THAT ON SEPTEMBER 11, 1962, A PURCHASE FOR THE COPPER PIPE AND TWO OTHER ITEMS WAS ISSUED TO THE GRAYBAR ELECTRIC COMPANY, INC.

IT IS REPORTED THAT ON SEPTEMBER 18, 1962, THE GRAYBAR ELECTRIC COMPANY, INC., ADVISED THE CONTRACTING OFFICE THAT ITS ORIGINAL BID PRICE FOR THE COPPER PIPE WAS BASED ON A 1947 PRICE SHEET AND THAT A LATER COMPARISON OF PRICES OF LIKE ITEMS INDICATED THAT THE CORPORATION'S UNIT PRICE OF $0.4751 FOR THE PIPE WAS FAR BELOW COST; THAT THE CORPORATION REQUESTED THAT THE PRICE OF THE PIPE BE INCREASED TO $0.69 PER FOOT; AND THAT ON SEPTEMBER 18, 1962, CHANGE ORDER NO. 1 WAS ISSUED INCREASING THE PRICE OF THE COPPER PIPE TO $0.69 PER FOOT. IT IS ALSO REPORTED THAT ON FEBRUARY 6, 1963, AFTER DELIVERY OF THE ELECTRICAL SUPPLIES, THE CORPORATION REQUESTED THAT THE UNIT PRICE OF THE COPPER PIPE BE CORRECTED TO READ $1.69 PER FOOT. THE CORPORATION STATED THAT THE ERROR IN THE PRICING OF THE COPPER PIPE RESULTED FROM QUOTING ON A NONSTOCK ITEM FOR WHICH CURRENT FACTORY PRICE SHEETS WERE NOT IMMEDIATELY AVAILABLE. THE RECORD SHOWS THAT ON OCTOBER 10, 1962, THE CORPORATION SUBMITTED TO THE FINANCE OFFICE AN INVOICE WHICH INDICATED A PRICE OF $1.69 PER FOOT FOR THE COPPER PIPE; THAT THE INVOICE WAS RETURNED TO THE CORPORATION BECAUSE THE PRICE SHOWN THEREON FOR THE PIPE DID NOT CONFORM TO THE PRICE SHOWN ON CHANGE ORDER NO. 1; THAT ON MARCH 3, 1963, THE CORPORATION SUBMITTED A CORRECTED INVOICE WHICH SHOWED A PRICE OF $0.69 PER FOOT FOR THE COPPER PIPE; AND THAT SUCH INVOICE WAS PAID BY THE FINANCE OFFICER ON MARCH 19, 1963.

BY LETTER DATED MARCH 5, 1963, ADDRESSED TO OUR OFFICE, THE GRAYBAR ELECTRIC COMPANY, INC., REQUESTED THAT THE UNIT PRICE FOR THE COPPER PIPE BE CORRECTED TO READ $1.69. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION BY LETTER DATED APRIL 12, 1963, SUBMITTED A COPY OF AN INVOICE DATED OCTOBER 2, 1962, RECEIVED FROM ITS SUPPLIER, PHELPS DODGE COPPER PRODUCTS CORPORATION, WHEREIN THE CORPORATION WAS BILLED A PRICE OF $1.693 PER FOOT, LESS THAN 20 PERCENT COMMISSION, FOR THE COPPER PIPE.

THE RECORD INDICATES THAT THE GRAYBAR ELECTRIC COMPANY, INC., SUBMITTED THE ONLY BID RECEIVED ON THE COPPER PIPE; THAT THE ESTIMATED PRICE ON THE PURCHASE REQUEST WAS $1.50 PER FOOT; AND THAT THE CORPORATION PAID ITS SUPPLIER $1.3544 PER FOOT OR $270.88 FOR THE COPPER PIPE. THE RECORD LEAVES LITTLE DOUBT THAT THE CORPORATION'S BID AS CORRECTED BY CHANGE ORDER NO. 1 WAS ERRONEOUS AND TO COMPEL IT TO FURNISH THE COPPER PIPE AT A PRICE OF $0.69 PER FOOT WOULD APPEAR TO BE INEQUITABLE.

ACCORDINGLY, SINCE THE COPPER PIPE HAS BEEN DELIVERED, AN ADDITIONAL PAYMENT OF $132.88--- THE DIFFERENCE BETWEEN THE AMOUNT PAID BY THE CORPORATION TO ITS SUPPLIER FOR THE COPPER PIPE AND THE AMOUNT RECEIVED BY IT FROM THE GOVERNMENT FOR THAT ITEM--- IS AUTHORIZED TO BE MADE.

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