B-100860, FEB 28, 1951

B-100860: Feb 28, 1951

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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED JANUARY 18. TO HAVE BEEN MADE IN ITS BID. WAS AWARDED. THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION. THE DECISION IS BEING ADDRESSED TO YOU. THE NEXT TWO LOWEST BIDS RECEIVED ON SAID ITEM WERE $23.69 AND $26.34 PER HUNDRED FEET. WAS ACCEPTED ON NOVEMBER 30. WALLACE TUBE COMPANY ADVISED THAT AN ERROR HAD BEEN MADE ON ITEM 1 OF ITS BID IN THAT THE PRICE QUOTED WAS BASED ON WELDED TUBING RATHER THAN ON SEAMLESS TUBING AND. IN SAID LETTER IT IS SHOWN THAT THE PRICE OF $18.27 PER HUNDRED FEET FOR 82. WAS BASED ON TUBING TO BE IN ACCORDANCE WITH SPECIFICATION AN-T-43. WHICH IS THE SPECIFICATION COVERING WELDED TUBING.

B-100860, FEB 28, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JANUARY 18, 1951, FROM THE CHIEF, PROCUREMENT DIVISION, DIRECTORATE, PROCUREMENT AND ENGINEERING OFFICE, DEPUTY CHIEF OF STAFF, MATERIEL, WASHINGTON, D. C., FORWARDING A LETTER DATED JANUARY 10, WITH ENCLOSURES, FROM VERNON E. YOUNG, CONTRACTING OFFICER, HEADQUARTERS, AIR MATERIEL COMMAND, WRIGHT PATTERSON AIR FORCE BASE, DAYTON, OHIO, AND REQUESTING THAT A DECISION BE RENDERED TO THE CONTRACTING OFFICER RELATIVE TO AN ERROR ALLEGED BY WALLACE TUBE COMPANY, CHICAGO, ILLINOIS, TO HAVE BEEN MADE IN ITS BID, OPENED ON OCTOBER 2, ON WHICH CONTRACT NO. AF 33(038)-17705, DATED NOVEMBER 30, 1950, WAS AWARDED.

SINCE AWARD HAS BEEN MADE IN THE PRESENT CASE, THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION. SEE 26 COMP. GEN. 993, AND 28 ID. 401. HOWEVER, SINCE A DECISION APPEARS NECESSARY, THE DECISION IS BEING ADDRESSED TO YOU.

HEADQUARTERS, AIR MATERIEL COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, BY INVITATION NO. 33-038-51-306, REQUESTED BIDS FOR 136 ITEMS OF TUBING. ITEMS 1 AND 6 COVER CHROME NICKEL STEEL, CORROSION RESISTING, ROUND, SEAMLESS TUBING, IN ACCORDANCE WITH SPECIFICATION AN-WW-T-858, AND ITEMS 7 TO 19 COVER CHROME NICKEL STEEL, CORROSION RESISTING ROUND, WELDED TUBING, COMPOSITION 2, IN ACCORDANCE WITH SPECIFICATION AN-T 43.

IN RESPONSE TO THE INVITATION, WALLACE TUBE COMPANY SUBMITTED A BID OFFERING TO FURNISH, AMONG OTHERS, ITEM 1, COVERING 82,000 FEET OF CHROME NICKEL STEEL, CORROSION RESISTING, ROUND, SEAMLESS TUBING, SIZE 1/8" OD X .032" WALL FOR $18.27 PER HUNDRED FEET. THE NEXT TWO LOWEST BIDS RECEIVED ON SAID ITEM WERE $23.69 AND $26.34 PER HUNDRED FEET, RESPECTIVELY. THE BID OF WALLACE TUBE COMPANY BEING THE LOWEST BID RECEIVED ON ITEM 1, WAS ACCEPTED ON NOVEMBER 30, 1950.

BY LETTER DATED DECEMBER 5, 1950, WALLACE TUBE COMPANY ADVISED THAT AN ERROR HAD BEEN MADE ON ITEM 1 OF ITS BID IN THAT THE PRICE QUOTED WAS BASED ON WELDED TUBING RATHER THAN ON SEAMLESS TUBING AND, THEREFORE, THE COMPANY REQUESTED TO BE RELIEVED FROM THE CONTRACT. IN RESPONSE TO LETTER OF DECEMBER 7 REQUESTING THAT EVIDENCE BE SUBMITTED IN SUPPORT OF ITS ALLEGED ERROR, WALLACE TUBE COMPANY, BY LETTER DATED DECEMBER 13, 1950, SUBMITTED A PHOTOSTATIC COPY OF A LETTER DATED SEPTEMBER 6, FROM THE TRENT TUBE COMPANY, ADDRESSED TO IT, QUOTING PRICES FOR VARIOUS ITEMS COVERED BY THE INVITATION HERE INVOLVED. IN SAID LETTER IT IS SHOWN THAT THE PRICE OF $18.27 PER HUNDRED FEET FOR 82,000 FEET OF 1/8" OD X .032" WALL, WAS BASED ON TUBING TO BE IN ACCORDANCE WITH SPECIFICATION AN-T-43, WHICH IS THE SPECIFICATION COVERING WELDED TUBING, RATHER THAN SPECIFICATION AN-WW- T-858 COVERING SEAMLESS TUBING, WHICH IS REQUIRED BY ITEM 1 OF THE INVITATION.

IN A STATEMENT OF FACTS AND RECOMMENDATION, DATED JANUARY 10, 1951, THE CONTRACTING OFFICER REPORTED, IN PART, AS FOLLOWS:

"A REVIEW OF THE FILES, AND IN PARTICULAR CONTRACTOR'S LETTERS DATED 13 DECEMBER 1950 (WITH PHOTOSTATIC ATTACHMENTS), AND 21 DECEMBER 1950, WILL INDICATE THAT HIS CONTENTION OF ALLEGED ERROR HAS A POSSIBLE FOUNDATION OF FACT. A COPY OF THE ABSTRACT OF BIDS SHOWS HIS PRICE, AS A WAREHOUSE, TO HAVE BEEN $18.27 PER 100 FEET, WHILE THE NEXT BIDDER, ELLWOOD IVINS STEEL TUBE WORKS, INC., A DIRECT PRODUCING MILL, QUOTED $23.69 PER 100 FEET. THIS REPRESENTS A PRICE DIFFERENTIAL OF $4,444.40, IN FAVOR OF THE WAREHOUSE, A CONDITION NOT NORMALLY EXISTENT IN THE STEEL INDUSTRY."

THE ABSTRACT OF BIDS SHOWS THAT THE PRICES FOR THE 72 OTHER ITEMS ON WHICH THE COMPANY QUOTED WERE CLOSE TO THE PRICES QUOTED THEREON BY THE NEXT LOW BIDDER, AND THAT ON ITEMS 7 THROUGH 19 THEREOF, COVERING WELDED TUBING, THE PRICES QUOTED BY THE COMPANY WERE IDENTICAL OR ONLY SLIGHTLY MORE THAN THE PRICES QUOTED BY THE BIDDER WHICH RECEIVED THE AWARD THEREON. MOREOVER, THE NEXT LOW BID WAS SUBMITTED BY A PRODUCER WHEREAS THE WALLACE TUBE COMPANY APPEARS TO BE A JOBBER. UNDER THE CIRCUMSTANCES, IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR AS TO ITEM 1 OF THE BID OF THE COMPANY AND, THEREFORE, THE COMPANY SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID ON ITEM 1 PRIOR TO AWARD.

ON THE BASIS OF THE FACTS OF RECORD, THERE APPEARS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, AND SINCE THE ERROR WAS ALLEGED PROMPTLY, THE WALLACE TUBE COMPANY MAY BE RELIEVED FROM OBLIGATION UNDER ITEM 1 OF CONTRACT NO. AF 33(038)-17705, DATED NOVEMBER 30, 1950.

THE PAPERS SUBMITTED WITH THE LETTER OF JANUARY 18, 1951, WITH THE EXCEPTION OF THE STATEMENT OF FACTS DATED JANUARY 10, 1951, FROM THE CONTRACTING OFFICER, ARE RETURNED HEREWITH.