A-94054, JUNE 15, 1938, 17 COMP. GEN. 1077

A-94054: Jun 15, 1938

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- SHOULD BE SUBMITTED FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE BEFORE AN AWARD IS MADE. THERE IS INCLOSED HEREWITH A COPY OF REQUEST FOR BIDS. THE PICATINNY ARSENAL WAS ADVISED BY SIETHER AND ELLIS. FOR THIS LOT WAS $104.22. THE DIFFERENCE BETWEEN THE LOW BID ACTUALLY RECEIVED AND THE LOWEST PRICE BID FOR HIGH-SPEED STEEL WAS APPROXIMATELY $19.00. CONSIDERABLE DELAY WOULD HAVE BEEN EXPERIENCED IN THE PROCUREMENT OF THE NECESSARY MATERIAL. CONFIRMATION OF THE ACTION TAKEN BY THE CONTRACTING OFFICER IS REQUESTED. FOR THE INFORMATION OF THE GENERAL ACCOUNTING OFFICE THERE ARE INCLOSED HEREWITH COPIES OF LETTERS FROM PICATINNY ARSENAL TO VARIOUS BIDDERS FOR THIS MATERIAL AND THEIR REPLIES THERETO.

A-94054, JUNE 15, 1938, 17 COMP. GEN. 1077

CONTRACTS - MISTAKES - BIDS - PROCEDURE THE QUESTION AS TO WHETHER A BIDDER MAY BE RELIEVED OF OBLIGATION UNDER A BID AFTER THE TIME FIXED FOR OPENING DEPENDS NOT ALONE ON WHETHER THE BIDDER MADE A MISTAKE BUT ON THE APPLICATION OF CERTAIN LEGAL PRINCIPLES TO THE ESTABLISHED FACTS IN THE PARTICULAR CASE, AND ALL SUCH QUESTIONS--- EXCEPT IN CASES SUCH AS INVOLVED IN 16 COMP. GEN. 999; 17 ID. 339; ID. 841 --- SHOULD BE SUBMITTED FOR DETERMINATION BY THE GENERAL ACCOUNTING OFFICE BEFORE AN AWARD IS MADE.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, JUNE 15, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF MAY 28, 1938, AS FOLLOWS:

REFERENCE YOUR LETTER DATED APRIL 13, 1938, A-94054, REQUESTING INFORMATION PERTAINING TO BID SUBMITTED BY SEITHER AND ELLIS, INC., TO THE PICATINNY ARSENAL, DOVER, NEW JERSEY, THERE IS INCLOSED HEREWITH A COPY OF REQUEST FOR BIDS, THE ORIGINAL BID OF SEITHER AND ELLIS, INC; AND COPY OF ABSTRACT OF BIDS RECEIVED.

DUE TO THE WIDE RANGE OF PRICES BID BY VARIOUS VENDORS THE COMMANDING OFFICER, PICATINNY ARSENAL, IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 9, A.R. 5-160, REQUESTED SEITHER AND ELLIS, INC., TO CERTIFY TO THE CORRECTNESS OF THE AMOUNT BID FOR ITEMS UNDER F TO K, INCLUSIVE, ON THIS PROPOSAL. UNDER DATE OF APRIL 7, 1938, THE PICATINNY ARSENAL WAS ADVISED BY SIETHER AND ELLIS, INC., THAT THEIR BID FOR THE FIRST THREE ITEMS COVERED CARBON STEEL INSTEAD OF HIGH SPEED STEEL. THEREUPON, THE COMMANDING OFFICER, PICATINNY ARSENAL, REQUESTED VERIFICATION OF ALL BIDS.

THE BID OF SEITHER AND ELLIS, INC., FOR THIS LOT WAS $104.22. THE BARAD TOOL AND SUPPLY COMPANY, INC., CERTIFIED THEIR BID OF $123.31 FOR THE LOT AS COVERING HIGH-SPEED STEEL.

THE DIFFERENCE BETWEEN THE LOW BID ACTUALLY RECEIVED AND THE LOWEST PRICE BID FOR HIGH-SPEED STEEL WAS APPROXIMATELY $19.00. HAD THE CONTRACTING OFFICER ADVISED SIETHER AND ELLIS, INC., THAT DELIVERY MUST BE MADE ON THEIR ORDER SUBJECT TO A CLAIM BEING SUBMITTED TO THE GENERAL ACCOUNTING OFFICE ON ACCOUNT OF ALLEGED ERROR IN BID, CONSIDERABLE DELAY WOULD HAVE BEEN EXPERIENCED IN THE PROCUREMENT OF THE NECESSARY MATERIAL. EMERGENCY EXISTED AT THE PICATINNY ARSENAL, NECESSITATING THE IMMEDIATE USE OF THE TOOLS CALLED FOR TO PREVENT THE SUSPENSION OF WORK, WITH A CONSEQUENT TEMPORARY LAY-OFF OF EMPLOYEES INVOLVED. THE COST TO THE UNITED STATES RESULTING FROM SUCH TEMPORARY SUSPENSION UNTIL THE TOOLS COULD BE OBTAINED WOULD FAR EXCEED THE ADDITIONAL $19.00 PAID ON THE BASIS OF AWARD TO BARAD TOOL AND SUPPLY COMPANY, INC. ACCORDINGLY, THE CONTRACTING OFFICER REJECTED THE BID OF SEITHER AND ELLIS, INC., AS NOT BEING RESPONSIVE OF ADVERTISED SPECIFICATIONS AND ACCEPTED THE LOWEST BID FOR SUPPLYING TOOLS MEETING THE REQUIREMENTS OF THE ARSENAL. CONFIRMATION OF THE ACTION TAKEN BY THE CONTRACTING OFFICER IS REQUESTED.

FOR THE INFORMATION OF THE GENERAL ACCOUNTING OFFICE THERE ARE INCLOSED HEREWITH COPIES OF LETTERS FROM PICATINNY ARSENAL TO VARIOUS BIDDERS FOR THIS MATERIAL AND THEIR REPLIES THERETO.

THE FACTS AND CIRCUMSTANCES APPEARING IN THIS CASE WERE SUCH THAT THE ACTION OF THE CONTRACTING OFFICER IN NOT MAKING AWARD TO SEITHER AND ELLIS, INC., WAS PROPER. SEE 17 COMP. GEN. 517. HOWEVER, AS THE QUESTION AS TO WHETHER A BIDDER MAY BE RELIEVED OF OBLIGATION UNDER A BID AFTER THE TIME FIXED FOR OPENING DEPENDS NOT ALONE ON WHETHER THE BIDDER MADE A MISTAKE BUT ON THE APPLICATION OF CERTAIN LEGAL PRINCIPLES TO THE ESTABLISHED FACTS IN THE PARTICULAR CASE, ALL SUCH QUESTIONS--- EXCEPT IN CASES SUCH AS INVOLVED IN 16 COMP. GEN. 999; 17 ID. 339; ID. 841--- SHOULD BE SUBMITTED FOR DETERMINATION BY THIS OFFICE BEFORE AN AWARD IS MADE. SEE 11 COMP. GEN. 65; 17 ID. 817.

WHILE NO FURTHER QUESTION WILL BE RAISED IN THIS INSTANCE TO THE ACTION OF THE CONTRACTING OFFICE IN DISREGARDING THE ERRONEOUS BID OF SEITHER AND ELLIS, INC., AND MAKING THE AWARD TO THE NEXT LOWEST BIDDER--- THAT IS, ON THE LOWEST CORRECT BID--- THE PRACTICE SHOULD BE TO SUBMIT SUCH CASES TO THIS OFFICE FOR DETERMINATION BEFORE MAKING AN AWARD.