A-94676, MAY 10, 1938, 17 COMP. GEN. 926

A-94676: May 10, 1938

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

STATES HE LEARNED OF ERROR IN A DISCUSSION OF PRICES WITH OTHER BIDDERS AFTER HIS LATE ARRIVAL AT THE OPENING AND THAT HAD HE ARRIVED BEFORE THE OPENING HE WOULD HAVE INCREASED HIS BID TO INCLUDE STILL ANOTHER ITEMS WHICH HE HAD NOT PREVIOUSLY INCLUDED BECAUSE OF THE SCARCITY OF WORK IN HIS PLANT. THE ONLY EVIDENCE OF MISTAKE SUBMITTED IS A LETTER FROM A SUPPLIER WITH REFERENCE TO PRICES WHICH THE BIDDER CLAIMS TO HAVE MISUNDERSTOOD. EVEN THOUGH IT BE ASSUMED THAT THERE WAS A MISUNDERSTANDING BETWEEN THE BIDDER AND SUPPLIER. WAS NEVERTHELESS THE BID INTENDED TO BE SUBMITTED AND AT MOST CAN BE CONSIDERED ONLY AS ILL-ADVISED OR IMPROPERLY CONSIDERED AND THERE IS NO AUTHORITY FOR PERMITTING THE BIDDER TO WITHDRAW OR CORRECT HIS BID.

A-94676, MAY 10, 1938, 17 COMP. GEN. 926

CONTRACTS - MISTAKES - BIDS - BID PRICE AS INTENDED - CORRECTION OR WITHDRAWAL WHERE THE LOW BIDDER DID NOT ALLEGE ERROR IN HIS BID UNTIL AFTER THE BIDS HAD BEEN OPENED, AND STATES HE LEARNED OF ERROR IN A DISCUSSION OF PRICES WITH OTHER BIDDERS AFTER HIS LATE ARRIVAL AT THE OPENING AND THAT HAD HE ARRIVED BEFORE THE OPENING HE WOULD HAVE INCREASED HIS BID TO INCLUDE STILL ANOTHER ITEMS WHICH HE HAD NOT PREVIOUSLY INCLUDED BECAUSE OF THE SCARCITY OF WORK IN HIS PLANT, AND THE ONLY EVIDENCE OF MISTAKE SUBMITTED IS A LETTER FROM A SUPPLIER WITH REFERENCE TO PRICES WHICH THE BIDDER CLAIMS TO HAVE MISUNDERSTOOD, THE BID, EVEN THOUGH IT BE ASSUMED THAT THERE WAS A MISUNDERSTANDING BETWEEN THE BIDDER AND SUPPLIER, WAS NEVERTHELESS THE BID INTENDED TO BE SUBMITTED AND AT MOST CAN BE CONSIDERED ONLY AS ILL-ADVISED OR IMPROPERLY CONSIDERED AND THERE IS NO AUTHORITY FOR PERMITTING THE BIDDER TO WITHDRAW OR CORRECT HIS BID.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, MAY 10, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF APRIL 29, 1938, TRANSMITTING THE PAPERS IN CONNECTION WITH THE BID OF THE KING KARD OVERALL CO. IN RESPONSE TO INVITATION FOR BIDS NO. 669-38-225 FOR 20,000 PAIRS OF LEGGINS, WITH RESPECT TO WHICH THE SAID BIDDER STATES THAT A MISTAKE WAS MADE AND REQUESTS TO BE ALLOWED TO INCREASE THE BID PRICE.

THE FACTS WITH REFERENCE TO THE MATTER ARE SET FORTH IN LETTER OF APRIL 26, 1938, FROM THE COMMANDING OFFICER, PHILADELPHIA QUARTERMASTER DEPOT, AS FOLLOWS:

1. THE ATTACHED LETTER FROM THE KING KARD OVERALL COMPANY, DATED APRIL 25, 1938, HAS REFERENCE TO INVITATION TO BID NO. 669-38-225, OPENED AT THIS DEPOT AT 11:00 A.M., DAYLIGHT SAVING TIME, APRIL 25, 1938. COPY OF THE INVITATION TO BID, ONE NUMBER OF THE BID WHEREIN IT IS ALLEGED MISTAKE HAS BEEN MADE, AND A COPY OF THE ABSTRACT OF ALL BIDS RECEIVED, ARE FORWARDED HEREWITH.

2. MR. JOSEPH GREENBARG OF THE KING KARD OVERALL COMPANY CALLED ON THE CONTRACTING OFFICER OF THIS DEPOT AT 11:55 A.M., APRIL 25, AND STATED THAT IN DISCUSSION WITH A REPRESENTATIVE OF THE DIANA LEGGING CORPORATION, THAT HE HAD JUST ASCERTAINED THAT HE HAD MADE A MISTAKE IN HIS BID IN THAT HE HAD INCLUDED AS A COMPONENT OF HIS BID PRICE AN ITEM OF 2 3/4 CENTS PER PAIR OF LEGGINS FOR THREE SMALL ITEMS OF HARDWARE, WHEREAS, HE SHOULD HAVE INCLUDED FOR THESE ITEMS TWICE THAT AMOUNT.

3. HE STATED THAT HE HAD INTENDED TO BE PRESENT AT THE OPENING OF BIDS, BUT DUE TO TROUBLE WITH HIS AUTOMOBILE HE WAS DELAYED AND DID NOT REACH THE DEPOT UNTIL 11:15 A.M. UPON BEING ASKED THE NATURE OF THE TROUBLE WITH HIS CAR, HE STATED THAT HE FOUND AT THE PACKARD AGENCY THAT IT WAS DUE TO A GASKET AND THAT HE WAS TOLD TO BRING THE CAR THERE THE FOLLOWING DAY FOR REPAIR. UPON BEING ASKED WHY HE WAS SO LATE IN GETTING TO THE PACKARD AGENCY, HAVING IN MIND THAT HE INTENDED TO BE AT THE DEPOT AT 11:00 A.M., HE REPLIED THAT HE DID NOT FEEL WELL.

4. HE STATED THAT HAD HE ARRIVED AT THE DEPOT PRIOR TO THE OPENING OF BIDS, THAT HE HAD INTENDED TO RAISE HIS BID PRICE 3 CENTS PER PAIR TO COVER SUCH ITEMS AS COST OF COMPENSATION INSURANCE AND OTHER OVERHEAD ITEMS, AS HE HAD NOT INCLUDED SUCH ITEMS IN HIS BID PRICE AS FIRST MADE OUT BECAUSE OF THE SCARCITY OF WORK IN HIS PLANT.

5. MR. GREENBARG REMARKED THAT HE WAS STILL NOT ENTIRELY CLEAR WITH REGARD TO THE MATTER AND BEFORE GOING INTO IT FURTHER, HE WANTED TO SEND TO HIS OFFICE FOR COPIES OF CORRESPONDENCE WITH HIS SUPPLIER AND ALSO COMMUNICATE WITH THAT COMPANY BY TELEPHONE.

6. MR. GREENBARG AGAIN CALLED ON THE CONTRACTING OFFICER THE AFTERNOON OF APRIL 25, 1938, AND SHOWED HIM A COPY OF LETTER WRITTEN BY HIS COMPANY TO THE NORTH AND JUDD MFG. CO., APRIL 19, 1938, AND REPLY THERETO BY THAT COMPANY UNDER DATE OF APRIL 20, 1938. THESE COMMUNICATIONS ARE ATTACHED. IT IS NOTED TAT THE SUPPLIER QUOTED "$27.50 PER THOUSAND PIECES SET.' THE LETTER REFERRED TO SAMPLES ATTACHED. THE SAMPLES IN QUESTION WERE IN A SMALL ENVELOPE; THE ENVELOPE REFERRED TO AND CONTENTS AS ALLEGED TO HAVE BEEN RECEIVED BY THE BIDDER ARE ATTACHED HERETO.

7. IT IS NOTED THAT THREE PIECES OF HARDWARE (1 BUCKLE, 1 CLIP, AND 0 TIP) ARE REQUIRED FOR ONE LEGGIN AND THAT TWO PIECES OF EACH TYPE OF HARDWARE WERE ENCLOSED IN THE ENVELOPE. IT IS FURTHER NOTED, HOWEVER, THAT ONE OF EACH TYPE OF PIECE, THAT IS, THREE PIECES, CONSTITUTING A SET, HAVE LABELS ATTACHED THERETO. IN THE OPINION OF THIS DEPOT, THIS CLEARLY INDICATES THAT A SET CONSISTS OF THREE PIECES OF HARDWARE, THE THREE PIECES CONSTITUTING THE COMPLETE ASSEMBLY OF THE ITEMS CONCERNED FOR A LEGGIN.

8. MR. DAVID GOLDMAN, REPRESENTATIVE OF THE DIANA LEGGING CORPORATION, 334 BOWERY, NEW YORK CITY, BIDDER NO. 2, WAS IN THE DEPOT AT THE TIME MR. GREENBARG FIRST CALLED AND HE WAS SUBSEQUENTLY INTERVIEWED BY THE CONTRACTING OFFICER. HE STATED THAT HIS UNDERSTANDING OF A SET OF HARDWARE WAS THE HARDWARE ASSEMBLY FOR A LEGGIN AND NOT FOR A PAIR OF LEGGINS; THAT HIS COMPANY HAD RECEIVED QUOTATIONS ON THESE ITEMS FROM THE NORTH AND JUDD MFG. CO., $27.50 PER M SETS, AND THAT HIS COMPANY HAD INCLUDED AN ITEM IN THEIR BID PRICE ACCORDINGLY.

9. UPON REFERRING TO RECORDS OF THIS DEPOT, IT IS NOTED THAT PURCHASES WERE MADE OF LEGGINS, CANVAS, DISMOUNTED, IN THE PAST AS FOLLOWS:

TABLE

DATE: QUANTITY PRICE

APRIL 2, 1934--------------- 117,285 $0.5538

MAY 1, 1934----------------- 20,215 .6099

JANUARY 8, 1935------------- 156,082 .6781

IT IS NOTED, HOWEVER, THAT THERE HAVE BEEN SOME MINOR CHANGES IN THE SPECIFICATION FOR THE LEGGINS, AS A RESULT OF WHICH, IN THE OPINION OF THIS DEPOT, THE COST OF THE LEGGINS COVERED BY THE PRESENT SPECIFICATIONS WOULD BE APPROXIMATELY 1 CENT MORE THAN LEGGINS BOUGHT UNDER THE OLD SPECIFICATION.

10. THE OTHER TWO BIDDERS UNDER SUBJECT INVITATION ALLOWED ONLY TWO DAYS FOR ACCEPTANCE OF THEIR BIDS. BOTH COMPANIES ARE BEING REQUESTED TO ALLOW FIFTEEN ADDITIONAL DAYS FOR ACCEPTANCE.

11. IT IS RECOMMENDED THAT AWARD BE MADE TO THE LOW BIDDER, KING KARD OVERALL COMPANY, AT THE BID PRICE SUBMITTED BY THAT COMPANY, NAMELY, $0.598 PER PAIR, LESS 1/4 OF 1 PERCENT, 20 DAYS

THE KING KARD OVERALL CO.'S LETTER OF APRIL 25, 1938, IS AS FOLLOWS:

UNDER OPENING DATE OF THIS A.M., BID 669-28-225, EASTERN STANDARD TIME, APRIL 25, 1938, WE BID $0.5980 EACH FOR 20,000 PAIR OF LEGGINS. THE WRITER REACHED THE ARMY BID ROOM AT 11.15 A.M. AND MET MR. CROSS OF HOOPER AND CO., MR. FIESS, THE THREAD SALESMAN, AND MR. GOLDMAN OF THE DIANA LEGGING COMPANY. THEY STATED TO ME THAT I WAS LOW BIDDER ON LEGGINS. GOT DISCUSSING PRICES AND MR. GOLDMAN ASKED ME HOW I FIGURED MY PRICE. TOLD HIM THAT I HAD RECEIVED A PRICE OF $27.50 A THOUSAND PAIRS OF LEGGINS FOR THE HARDWARE. HE SAID THAT I WAS ALL WRONG AND GOT TO FIGURE AT LEAST DOUBLE BECAUSE IT MEANT $27.50 PER THOUSAND, SINGLE SETS. AFTER THIS DISCUSSION I WENT IN AND SAW YOUR MAJOR GRICE AND SPOKE TO HIM AND EXPLAINED TO HIM THIS CONDITION.

IMMEDIATELY I WENT BACK TO OUR PLANT AND GOT IN TOUCH WITH THE NORTH AND JUDD MFG. CO., AND ASKED THEM WHAT THEY MEANT BY THEIR $27.50 THOUSAND SET PRICE AND THEY EXPLAINED THAT MEANT $27.50 PER THOUSAND FOR ONE SET OF THREE PIECES, WHILE IN THEIR LETTER, WHEN THEY QUOTED US, THEY HAD MAILED US TWO SETS, AND WE FIGURED ON THE TWO SETS WHICH IT ACTUALLY DOES TAKE FOR A PAIR OF LEGGINS. THEREFORE, WE UNDER-BID ON OUR PRICE TO THE EXTENT OF ABOUT 2 3/4 CENTS PER PAIR OF LEGGINS. WE, THEREFORE, ASK YOU TO THROW OUT THE BID, READVERTISE, OR MAKE AWARD TO THE NEXT LOWEST BIDDER, OR INCREASE OUR PRICE 2 3/4 CENTS PER PAIR OF LEGGINS, AND WE WILL IMMEDIATELY ACCEPT THE AWARD.

P.S. TIME FOR ACCEPTANCE OF OUR BID IS HEREBY EXTENDED 30 ADDITIONAL DAYS. KING KARD OVERALL CO. BY JOSEPH GREENBARG.

THE OTHER BIDS RECEIVED WERE $0.688 AND $0.833 PER PAIR.

THE NUMEROUS DECISIONS OF THIS OFFICE HAVE BEEN TO THE EFFECT THAT AFTER ALL BIDS HAVE BEEN OPENED, AS IN THIS CASE AND BIDDERS HAVE ASCERTAINED THE AMOUNT QUOTED BY OTHER BIDDERS WHEREBY THERE MIGHT ARISE A TEMPTATION TO REVISE A BID EITHER UPWARD OR DOWNWARD AS MIGHT SERVE THE INTERESTS OF THE PARTICULAR BIDDER, THE PERMITTING OF ANY CHANGE IN A BID IS A MATTER FOR MOST SERIOUS CONSIDERATION AND SUCH SITUATION MAKES NECESSARY STRICT ADHERENCE TO THE WELL-ESTABLISHED RULE THAT IN ORDER TO AUTHORIZE THE CORRECTION OR WITHDRAWAL OF A BID BEFORE ACCEPTANCE ON THE BASIS OF A MISTAKE ALLEGED AFTER THE OPENING OF THE BIDS, THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, AND THERE SHOULD BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS A BONA FIDE MISTAKE IN THE BID AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR AVOIDING THE CONSEQUENCE OF AN ILL-ADVISED BID. THE CLAIM OF ERROR IN THIS CASE WAS NOT ALLEGED UNTIL AFTER THE OPENING OF THE BIDS AND AFTER THE BIDDER ALLEGING MISTAKE HAD BEEN ADVISED OF THE BIDS SUBMITTED BY OTHER BIDDERS AND AFTER THE BIDDER HAD DISCUSSED WITH REPRESENTATIVES OF OTHER BIDDERS THE MATTER OF PRICES SUBMITTED. FURTHERMORE, THE BIDDER DOES NOT SUBMIT ANY EVIDENCE OF MISTAKE OTHER THAN A LETTER FROM NORTH AND JUDD MANUFACTURING CO. WITH REFERENCE TO THE PRICES FOR BUCKLES AND CLIPS WHICH THE BIDDER ALLEGES HE MISUNDERSTOOD. EVEN ASSUMING THAT THERE WAS A MISUNDERSTANDING BETWEEN THE SUB-BIDDER, FROM WHOM THE BIDDER CLAIMING MISTAKE AS TO PRICES SET FOR BUCKLES AND CLIPS WAS TO OBTAIN THE HARDWARE TO GO ON THE LEGGINS, AND THE BIDDER, THE FACT REMAINS THAT THE BID AS SUBMITTED BY THIS BIDDER WAS THE BID INTENDED TO BE SUBMITTED, THERE BEING INVOLVED ONLY A MISUNDERSTANDING ON THE PART OF THE BIDDER AS TO THE PRICE AT WHICH IT COULD OBTAIN THE NECESSARY HARDWARE. IN OTHER WORDS, THE MOST THAT CAN BE SAID IS THAT THE BID WAS ILL-ADVISED OR NOT PROPERLY CONSIDERED BEFORE BEING SUBMITTED IT IS NOTED, ALSO, THAT THE AMOUNT OF THE ALLEGED ERROR IS LESS THAN 5 PERCENT OF THE AMOUNT OF THE BID.

IN VIEW OF THE FACTS OF RECORD IT MUST BE HELD THAT THERE IS NO AUTHORITY FOR PERMITTING KING KARD OVERALL CO. TO WITHDRAW OR CORRECT ITS BID. SEE 15 COMP. GEN. 1049.