A-93717, APRIL 14, 1938, 17 COMP. GEN. 841

A-93717: Apr 14, 1938

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THAT IT HAD FAILED TO CHANGE THE UNIT OF QUANTITY ON THE BID FORM TO THAT USED IN COMPUTING ITS BID AND THAT WHICH IS GENERALLY USED IN DETERMINING THE COST OF THE COMMODITY INVOLVED. IS NOT THE LOWEST BID RECEIVED. WHERE AN EXTENDED TOTAL IN A BID DOES NOT AGREE WITH THE UNIT PRICE FOR THE QUANTITY INVOLVED AND IT IS APPARENT TO THE CONTRACTING OFFICER THAT THE DISCREPANCY IS IN THE DESIGNATED UNIT RATHER THAN IN THE UNIT PRICE OR THE TOTAL PRICE AND THE BIDDER CONFIRMS THE CONTRACTING OFFICER'S INTERPRETATION BEFORE ANY AWARD IS MADE. BIDS WERE RECEIVED FROM LINDE AIR PRODUCTS COMPANY. NOTED THAT THE TOTAL COST OF EACH ITEM IN THE BID SUBMITTED BY AIR REDUCTION SALES COMPANY WAS NOT THE PRODUCT OF THE UNIT PRICE AND THE QUANTITY.

A-93717, APRIL 14, 1938, 17 COMP. GEN. 841

CONTRACTS - MISTAKES - BIDS - FAILURE TO SHOW PROPER UNIT - CORRECTION AND AWARD PROCEDURE WHERE, BECAUSE OF THE EMERGENCY NEED, A CONTRACTING OFFICER MADE AWARD ON A BID AS SUBMITTED NOTWITHSTANDING HE NOTICED THAT THE EXTENDED PRICES DID NOT AGREE WITH THE UNIT PRICES SHOWN THEREIN, AND THE BIDDER, UPON BEING REQUESTED, AFTER AWARD, TO VERIFY ITS BID, STATED, IN ACCORDANCE WITH CONTRACTING OFFICER'S PRIOR INTERPRETATION, THAT IT HAD FAILED TO CHANGE THE UNIT OF QUANTITY ON THE BID FORM TO THAT USED IN COMPUTING ITS BID AND THAT WHICH IS GENERALLY USED IN DETERMINING THE COST OF THE COMMODITY INVOLVED, THE BID MAY BE CORRECTED TO THE PRICE CLEARLY INTENDED, BUT IF THE BID, AS CORRECTED, IS NOT THE LOWEST BID RECEIVED, THE AWARD SHOULD BE CANCELED AS TO THE UNDELIVERED PORTION OF THE INVOLVED MATERIAL AND PAYMENT MADE FOR THE DELIVERED PORTION AT NOT TO EXCEED THE AMOUNT BID BY THE LOWEST BIDDER ON THE ITEMS INVOLVED. WHERE AN EXTENDED TOTAL IN A BID DOES NOT AGREE WITH THE UNIT PRICE FOR THE QUANTITY INVOLVED AND IT IS APPARENT TO THE CONTRACTING OFFICER THAT THE DISCREPANCY IS IN THE DESIGNATED UNIT RATHER THAN IN THE UNIT PRICE OR THE TOTAL PRICE AND THE BIDDER CONFIRMS THE CONTRACTING OFFICER'S INTERPRETATION BEFORE ANY AWARD IS MADE, THE CORRECTION MAY BE MADE WITHOUT SUBMITTING THE MATTER TO THE GENERAL ACCOUNTING OFFICE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, APRIL 14, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF MARCH 26, 1938, AS FOLLOWS:

ON FEBRUARY 18, 1938, THE REGIONAL OFFICE OF THE SOIL CONSERVATION SERVICE AT SPOKANE, WASHINGTON, ENTERED INTO AN UNNUMBERED CONTRACT WITH THE AIR REDUCTION SALES COMPANY, SEATTLE, WASHINGTON, IN ACCEPTANCE OF ITS BID SUBMITTED IN RESPONSE TO INVITATION TO BID NO. CIV-273, UNDER WHICH BIDS OPENED AT SPOKANE, WASHINGTON, ON FEBRUARY 15, 1938.

THE INVITATION TO BID COVERED THE PROPOSED PURCHASE OF ACETYLENE AND OXYGEN FOR USE IN WELDING OPERATIONS, AND CALLED FOR UNIT PRICES PER TANK. BIDS WERE RECEIVED FROM LINDE AIR PRODUCTS COMPANY, AIR REDUCTION SALES COMPANY, AND SEATTLE OXYGEN COMPANY, INC.

THE REGIONAL PROCUREMENT OFFICER, PRIOR TO AWARD, NOTED THAT THE TOTAL COST OF EACH ITEM IN THE BID SUBMITTED BY AIR REDUCTION SALES COMPANY WAS NOT THE PRODUCT OF THE UNIT PRICE AND THE QUANTITY. THE BID, ON ITS FACE, DISCLOSED AN OBVIOUS ERROR IN EXTENSION, BUT THE PROCUREMENT OFFICER'S KNOWLEDGE OF COMMERCIAL PRACTICES AMONG THIS CLASS OF BIDDERS, INDICATED TO HIM THAT IT WAS THE INTENT OF THE BIDDER TO QUOTE ON A 100 CUBIC FEET BASIS INSTEAD OF PER TANK, AND THAT THE BIDDER'S REAL MISTAKE WAS DUE TO ITS FAILURE TO QUALIFY THE UNIT PRICE USED. THIS METHOD OF QUOTING APPEARS TO BE BORNE OUT BY THE FACT THAT THE TOTAL COST PER ITEM IS THE PRODUCT OF THE CAPACITY OF THE TANK AND THE UNIT PRICE, IF SUCH UNIT PRICE IS CONSTRUED AS THE PRICE PER 100 CUBIC FEET. IT WILL ALSO BE NOTED THAT SEATTLE OXYGEN, INC., WHILE QUOTING CORRECTLY ON ITEMS 1, 2, AND SUB- ITEMS, MADE A SIMILAR ERROR ON ITEM 3 AND SUB-ITEMS BY FAILING TO QUALIFY THE UNIT QUOTED UPON.

A CONSIDERABLE QUANTITY OF THE ACETYLENE AND OXYGEN SPECIFIED WAS URGENTLY NEEDED AT C.C.C. CAMPS FOR THE REPAIRING AND RECONDITIONING OF EQUIPMENT AND ANY UNDUE DELAY IN OBTAINING THEIR REQUIREMENTS WOULD RESULT IN RETARDING EARLY SPRING OPERATIONS. SINCE THE NEEDS OF THE GOVERNMENT WOULD, THEREFORE, NOT PERMIT OF THE DELAY INCIDENT TO SUBMITTING THE CASE TO YOUR OFFICE PRIOR TO AWARD FOR DETERMINATION ON THE MATTER OF MISTAKE, AWARD WAS IMMEDIATELY MADE TO THE AIR REDUCTION SALES COMPANY (8 COMP. GEN. 397).

ON FEBRUARY 28, 1938, THE AIR REDUCTION SALES COMPANY WAS REQUESTED TO VERIFY AND CONFIRM ITS BID. ON MARCH 1, 1938, THIS CONCERN REPLIED STATING THAT IT HAD NEGLECTED TO CHANGE THE UNIT ,TANK" TO "100 CUBIC FEET," AND REQUESTED THAT ITS BID BE CONSIDERED ON A UNIT PRICE PER 100 CUBIC FEET. IT WAS ALSO STATED THAT DUE TO THE PECULIAR NATURE OF THIS COMMODITY, IT IS PRACTICALLY IMPOSSIBLE TO FURNISH CYLINDERS OF A CERTAIN CONTENT AND INASMUCH AS CHARGES ARE BASED UPON THE ACTUAL CONTENT, IT IS THE PRACTICE TO USE A UNIT OF 1 OR 100 CUBIC FEET IN DETERMINING THE COST OF THE TOTAL CONTENTS.

ENCLOSED, HEREWITH, ARE THE CONTRACT ENTERED INTO WITH THE AIR REDUCTION SALES COMPANY, ALL REJECTED BIDS, AN ABSTRACT OF BIDS, AND CORRESPONDENCE HAD WITH THE AIR REDUCTION SALES COMPANY AND SEATTLE OXYGEN COMPANY, INC.

IT IS REQUESTED THAT YOU REVIEW THE FACTS PRESENTED HEREIN, AND WITH THE RETURN OF ALL PAPERS, THE DEPARTMENT BE ADVISED OF THE PROPER ACTION TO FOLLOW.

YOUR ADVICE IS ALSO REQUESTED AS TO WHETHER, IN THE FUTURE, UNDER SIMILAR CIRCUMSTANCES, THE CONTRACTING OFFICER MAY CONSIDER THE BID IN ITS INTENDED FORM AFTER OBTAINING CONFIRMATION BY THE BIDDER. IF YOUR ANSWER IS IN THE AFFIRMATIVE, MAY IT BE GIVEN LIKE APPLICATION TO OTHER COMMODITIES WHERE AN ERROR IN EXTENSION APPEARS ON THE FACE OF THE BID BECAUSE OF THE BIDDER'S FAILURE TO NOTE THE UNIT PRICES USED IN VARIANCE WITH THAT APPEARING ON THE INVITATION TO BID. IT IS UNDERSTOOD, OF COURSE, THAT THE ERROR MUST BE OBVIOUS BEYOND ALL MEASURE OF DOUBT, THAT CONFIRMATION IS TO BE RECEIVED PRIOR TO AWARD, AND THAT WHILE THE EXTENSION IS INCONSISTENT IT WOULD BE CONSISTENT WITH ANOTHER UNIT, AS FOR EXAMPLE, PER POUND INSTEAD OF PER 100 POUNDS, EACH INSTEAD OF PER DOZEN, OR PER BOARD FOOT INSTEAD OF PER 1,000 BOARD FEET.

THERE APPEARS TO BE NO ROOM FOR DOUBT THAT THE UNIT PRICES QUOTED BY THE AIR REDUCTION SALES COMPANY WERE INTENDED TO BE PER 100 CUBIC FEET INSTEAD OF PER TANK AND THAT THE BIDDER FAILED TO SO QUALIFY THE UNIT PRICE USED. THE BID MAY BE CORRECTED ACCORDINGLY. IF THE BID AS CORRECTED IS NOT THE LOW BID, THE AWARD SHOULD BE CANCELED AS TO THE UNDELIVERED PORTION AND PAYMENT MADE FOR THE DELIVERED PORTION AT NOT TO EXCEED THE AMOUNT BID BY THE LOWEST BIDDER ON THE ITEMS INVOLVED.

AS TO THE REQUEST IN THE CONCLUDING PARAGRAPH OF YOUR LETTER, SUPRA, YOU ARE ADVISED THAT WHEN THE EXTENDED TOTAL DOES NOT AGREE WITH THE UNIT PRICE FOR THE QUANTITY INVOLVED AND IT IS APPARENT TO THE CONTRACTING OFFICER THAT THE DISCREPANCY IS IN THE DESIGNATED UNIT RATHER THAN IN THE UNIT PRICE OR THE TOTAL PRICE AND THE BIDDER CONFIRMS THE CONTRACTING OFFICER'S INTERPRETATION BEFORE ANY AWARD IS MADE, THE CORRECTION MAY BE MADE WITHOUT SUBMITTING THE MATTER TO THIS OFFICE.