A-91214, DECEMBER 29, 1937, 17 COMP. GEN. 532

A-91214: Dec 29, 1937

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NOTWITHSTANDING THE MISTAKE WAS ALLEGED PRIOR TO AWARD. IS AS FOLLOWS: 1. CIRCULAR PROPOSAL 38-349 WAS ISSUED BY THE CONTRACTING OFFICER. BIDS WERE OPENED AT 10:00 A.M. THE FOLLOWING PROPOSALS WERE RECEIVED IN RESPONSE TO THIS ADVERTISEMENT. WAS RECEIVED FROM EX-CELL-O CORPORATION ENCLOSING A BID BOND FOR FILING WITH ITS BID AND ALSO ADVISING THAT ITS ESTIMATING DEPARTMENT IN FIGURING THE QUOTATION ON ITS PROPOSAL NEGLECTED TO INCLUDE A 25 PERCENT ADDITIONAL CHARGE TO PROVIDE FOR INSPECTION AND PROFIT. A LIST OF THE REVISED UNIT PRICES WAS SUPPLIED. IS ENCLOSED HEREWITH. IN REPLY THE BIDDER WAS NOTIFIED THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO PERMIT CORRECTION OF A BID AFTER THE BIDS HAVE BEEN OPENED AND READ AND THAT ITS ONLY RECOURSE WOULD BE TO FURNISH DETAILED EVIDENCE SHOWING HOW THE MISTAKE WAS MADE AND OF WHAT IT CONSISTS.

A-91214, DECEMBER 29, 1937, 17 COMP. GEN. 532

CONTRACTS - MISTAKES - BIDS - OMISSION OF INSPECTION AND PROFIT PERCENTAGES - FORFEITURE OF BID BOND WHERE, AFTER THE OPENING OF BIDS AND THEIR BEING MADE PUBLIC, THE LOW BIDDER ALLEGES ERROR IN THAT IT FAILED TO INCLUDE A PERCENTAGE TO COVER INSPECTION AND PROFIT IN ADDITION TO RESPECTIVE PERCENTAGES ALREADY ADDED TO THE COSTS OF LABOR AND MATERIAL, THE BIDDER SHOULD BE REQUIRED TO PERFORM AT THE BID PRICE OR FORFEIT ITS BID BONDS, NOTWITHSTANDING THE MISTAKE WAS ALLEGED PRIOR TO AWARD, THE ERROR, IF ANY, NOT HAVING BEEN CONCLUSIVELY ESTABLISHED AND BEING DUE SOLELY TO THE BIDDER'S OWN CARELESSNESS, AND NOT BEING SO GROSS AS TO RENDER UNCONSCIONABLE A CONTRACT BASED ON THE BID AS ORIGINALLY SUBMITTED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, DECEMBER 29, 1937:

YOUR LETTER OF DECEMBER 13, 1937, IS AS FOLLOWS:

1. CIRCULAR PROPOSAL 38-349 WAS ISSUED BY THE CONTRACTING OFFICER, MATERIAL DIVISION, AIR CORPS, WRIGHT FIELD, OHIO, UNDER DATE OF OCTOBER 14, 1937, CALLING FOR 22 ITEMS OF GAGE ASSEMBLIES, AND BIDS WERE OPENED AT 10:00 A.M. ON NOVEMBER 1, 1937. THE FOLLOWING PROPOSALS WERE RECEIVED IN RESPONSE TO THIS ADVERTISEMENT, QUOTING TOTAL PRICES AS FOLLOWS:

CHART

THE TAFT-PEIRCE MFG. CO., WOONSOCKET, R.I ---------------- $55,737.50

VINCO TOOL COMPANY, INC., DETROIT, MICHIGAN -------------- 33,285.00

EX-CELL-O CORPORATION, DETROIT, MICHIGAN ------------------ (LESS 5

PERCENT

REDUCTION FOR

AWARD ALL

ITEMS.)

22,799.00

2. PRIOR TO MAKING THE AWARD ON THE CIRCULAR PROPOSAL THE ENCLOSED LETTER, DATED NOVEMBER 6, 1937, WAS RECEIVED FROM EX-CELL-O CORPORATION ENCLOSING A BID BOND FOR FILING WITH ITS BID AND ALSO ADVISING THAT ITS ESTIMATING DEPARTMENT IN FIGURING THE QUOTATION ON ITS PROPOSAL NEGLECTED TO INCLUDE A 25 PERCENT ADDITIONAL CHARGE TO PROVIDE FOR INSPECTION AND PROFIT, AND CONSEQUENTLY REQUESTED PERMISSION TO ENTER A CLAIM FOR 25 PERCENT ADDITIONAL. A LIST OF THE REVISED UNIT PRICES WAS SUPPLIED, AND IS ENCLOSED HEREWITH. IN REPLY THE BIDDER WAS NOTIFIED THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO PERMIT CORRECTION OF A BID AFTER THE BIDS HAVE BEEN OPENED AND READ AND THAT ITS ONLY RECOURSE WOULD BE TO FURNISH DETAILED EVIDENCE SHOWING HOW THE MISTAKE WAS MADE AND OF WHAT IT CONSISTS. IN ACCORDANCE WITH SUCH ADVICE, THE BIDDER FORWARDED A CERTIFIED STATEMENT DATED NOVEMBER 16, 1937, TOGETHER WITH ESTIMATE SHEETS USED IN COMPILING THE PRICES, WHICH REVEALS THE VARIOUS COSTS APPLICABLE TO ITS BID AND WHICH DATA IS ALSO FORWARDED HEREWITH.

3. PRICES QUOTED BY EX-CELL-O CORPORATION, AS CORRECTED, ARE CONSIDERED FAIR AND REASONABLE WHEN COMPARED WITH THE OTHER BIDS RECEIVED. DECISION IS REQUESTED AS TO WHETHER THE EX-CELL-O CORPORATION MAY BE PERMITTED TO CORRECT ITS BID. IF SUCH ACTION IS AUTHORIZED ITS AGGREGATE CORRECTED BID, LESS 5 PERCENT REDUCTION ALLOWED FOR AWARD UNDER ALL ITEMS ADVERTISED, WILL BE LOWER THAN THE AGGREGATE INDIVIDUAL LOW BID ON EACH ITEM. IN VIEW OF THE FACT THAT THE ERROR, IF MADE, WAS APPARENTLY DUE SOLELY TO NEGLECT OF THE BIDDER, IT IS THE RECOMMENDATION OF THIS OFFICE THAT THE EX-CELL-O CORPORATION BE HELD TO THE TERMS OF ITS BID AS SUBMITTED. IT IS BELIEVED THAT, IN THE INTEREST OF THE GOVERNMENT, ALL BIDDERS SHOULD BE IMPRESSED WITH THE NECESSITY OF GIVING TO THE PREPARATION OF BIDS THE SERIOUS ATTENTION DESERVED, AND THAT, EXCEPT IN CASE OF PALPABLE MISTAKE, BIDDERS SHOULD BE BOUND BY THE TERMS OF THEIR PROPOSALS.

4. A COPY OF THE CIRCULAR PROPOSAL, THE ABSTRACT OF PROPOSALS RECEIVED IN RESPONSE THERETO AND THE BID OF EX-CELL-O CORPORATION ARE FORWARDED HEREWITH WITH THE REQUEST THAT ALL PAPERS BE RETURNED AT AN EARLY DATE.

ON NOVEMBER 6, 1937, AFTER THE BIDS WERE OPENED ON NOVEMBER 1, 1937, AND THE BIDS OF THE OTHER TWO BIDDERS MADE PUBLIC, THE EX-CELL-O CORPORATION ADDRESSED THE FOLLOWING LETTER TO THE CONTRACTING OFFICER:

IN ACCORDANCE WITH YOUR REQUEST, WE ARE ENCLOSING THE GOVERNMENT FORM OF BID BOND WHICH SHOULD HAVE ACCOMPANIED OUR PROPOSAL OF OCTOBER 30.

OUR ESTIMATING DEPARTMENT NEGLECTED TO INCLUDE AN ADDITIONAL 25 PERCENT FOR INSPECTION AND PROFIT WHEN FIGURING THE ITEMS COVERED BY OUR QUOTATION. IN THEIR ANXIETY TO GET THIS BID IN BEFORE THE CLOSING DATE, THE PROPOSAL WAS MAILED WITHOUT THIS 25 PERCENT BEING ADDED.

WE UNDERSTAND THAT WE ARE TO RECEIVE THE AWARD FOR THE MANUFACTURE OF THESE GAGES. HOWEVER, IF IT IS POSSIBLE AT THIS TIME, WE WOULD LIKE TO ENTER A CLAIM FOR 25 PERCENT ON THIS AWARD AS OUR COMPANY WILL LOSE A CONSIDERABLE AMOUNT IF THIS CANNOT BE DONE.

ENCLOSED IS A LIST OF THE ITEMS SHOWING THE PRICES AS THEY SHOULD BE.

IF YOU DESIRE, UPON COMPLETION OF THE WORK INVOLVED IN PROCESSING THESE GAGES, WE WILL BE WILLING TO HAVE YOU CHECK OVER OUR COST COVERING THIS WORK.

GAGES OF THIS TYPE REQUIRE CONSIDERABLY MORE INSPECTION TIME THAN OTHER DETAILS AND WE FEEL QUITE CONFIDENT THAT, IF YOU TAKE INTO CONSIDERATION THE AMOUNT OF WORK INVOLVED, YOU WILL FEEL THAT OUR CLAIM IS JUSTIFIABLE.

ON NOVEMBER 16, 1937, THE EX-CELL-O CORPORATION ADDRESSED A SECOND LETTER TO THE CONTRACTING OFFICER AS FOLLOWS:

IN ACCORDANCE WITH YOUR LETTER OF NOVEMBER 8, WE ARE ENCLOSING OUR QUOTATION SHEETS SHOWING EXACTLY WHERE THE ERROR OCCURRED IN THE PRICES WHICH WE SUBMITTED TO YOU ON OCTOBER 30.

YOU WILL NOTICE THAT EACH AND EVERY ITEM IS BROKEN DOWN SHOWING EXACTLY WHAT MATERIAL AND LABOR IS INVOLVED IN THE MANUFACTURE OF THESE PARTS. THE NECESSARY CORRECTIONS ARE SHOWN IN RED PENCIL SO THAT THEY CAN BE READILY IDENTIFIED.

THE TOTAL AMOUNT OF THE BID IS NOW $29,373.47. IN THE EVENT ALL OF THE ITEMS ARE ORDERED, THE TOTAL AMOUNT WILL BE LESS 5 PERCENT, WHICH IS $27,904.80.

IN CHECKING OVER OUR SUMMARY SHEET, YOU WILL NOTICE THAT THERE IS A DIFFERENCE IN THE PRICE OF THE THIRD ITEM. OUR ITEMIZED QUOTATION DATA SHEET FOR ITEM NO. 3 IS CORRECT SHOWING THE ORIGINAL PRICE OF $321. HOWEVER, WHEN IT WAS TRANSPOSED TO OUR SUMMARY SHEET, AN ERROR OF $100 WAS MADE, AND THAT IS WHY, IN OUR LETTER OF NOVEMBER 6, WE SHOWED THE PRICE OF $276.25 EACH, AS THE PRICE OF THIS ITEM. OF COURSE, WITH THE 25 PERCENT WHICH WAS OMITTED ON THIS ITEM, AS WELL AS ON ALL OF THE OTHERS, THE CORRECT PRICE OF ITEM NO. 3 IS NOW $401.21. THIS INFORMATION IS SUBSTANTIATED BY THE INFORMATION SHOWN ON OUR ESTIMATE SHEET FOR ITEM NO. 3.

THE WORK SHEETS SUBMITTED IN SUPPORT OF THE ALLEGATION OF ERROR IN THE BID LIST THE COST OF MATERIAL--- TO WHICH THERE WAS ADDED 10 PERCENT--- AND THE COST OF LABOR AT $1.10 PER HOUR TO WHICH THERE WAS ADDED AN ITEM OF 100 PERCENT AS OVERHEAD. IT IS NOW CONTENDED BY THE BIDDER THAT THERE SHOULD HAVE BEEN ADDED 25 PERCENT TO COVER INSPECTION AND PROFIT, TO BE COMPUTED ON THE 10 PERCENT ALREADY ADDED TO THE MATERIAL COST AND ON THE 100-PERCENT OVERHEAD AS WELL AS ON THE ACTUAL COST OF LABOR AND MATERIAL.

WHILE ERROR WAS ALLEGED BEFORE AN AWARD WAS MADE, THE ALLEGED ERROR HAS NOT BEEN CONCLUSIVELY ESTABLISHED. THAT IS TO SAY, ON THE PRESENT RECORD THERE IS ROOM FOR DOUBT WHETHER THERE WAS IN FACT ANY ERROR AND STILL GREATER DOUBT AS TO WHETHER THE BIDDER INTENDED TO ADD, IN ADDITION TO THE 10 PERCENT ON MATERIAL AND THE 100 PERCENT ON THE ENTIRE LABOR COST, 25 PERCENT TO COVER INSPECTION AND PROFIT. FURTHERMORE, SUCH ERROR, IF ANY, AS MAY HAVE BEEN MADE WAS DUE SOLELY TO THE BIDDER'S OWN CARELESSNESS OR INATTENTION TO DETAILS, AND THE MISTAKE WAS NOT SO GROSS AS WOULD RENDER UNCONSCIONABLE A CONTRACT BASED ON THE BID AS ORIGINALLY SUBMITTED.

ON THE FACTS APPEARING THIS OFFICE IS WITHOUT AUTHORITY TO REFORM THE BID OR TO AUTHORIZE ITS REJECTION AND WAIVER OF THE REQUIREMENTS OF THE BID BOND. (15 COMP. GEN. 1049.)

ACCORDINGLY, YOU ARE ADVISED THAT THE EX-CELL-O CORPORATION SHOULD BE REQUIRED TO PERFORM AT ITS BID PRICE OR TO FORFEIT ITS BID BOND. (SEE SCOTT V. UNITED STATES, 44 CT.CLS. 524.) ..END :