B-101869, APR 9, 1951

B-101869: Apr 9, 1951

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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: I HAVE YOUR LETTER OF MARCH 5. TO HAVE BEEN MADE IN ITS BID DATED DECEMBER 15. IS BASED. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ALL ITEMS ON DECEMBER 27. WAS ISSUED REQUESTING DELIVERY OF THE CAPACITORS. ADVISED THE CONTRACTING OFFICER AS FOLLOWS: "WE HAVE JUST RECEIVED YOUR ORDER 33096-51-6904E AS A RESULT OF OUR SUBJECT BID. "UPON RE-EXAMINING OUR QUOTATION WE FIND WE HAVE MADE A RATHER SERIOUS ERROR. WE ARE HEREWITH REQUESTING AN AMENDMENT ON THIS PURCHASE ORDER TO COMPENSATE FOR THAT ERROR. "OUR QUOTATION WAS MADE BASED ON THE ASSUMPTION THAT OUR UNIT COST OF ALL ITEMS LISTED WAS .15[. UPON PLACING THE ORDER WITH THE FACTORY THEY IMMEDIATELY ADVISED US THAT OUR COST IS .35[.

B-101869, APR 9, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

I HAVE YOUR LETTER OF MARCH 5, 1951, WITH ENCLOSURES, RELATIVE TO AN ERROR ALLEGED BY HUGHES-PETERS, INCORPORATED, TO HAVE BEEN MADE IN ITS BID DATED DECEMBER 15, 1950, ON WHICH UNNUMBERED CONTRACT DATED DECEMBER 27, 1950, IS BASED. YOU REQUEST A DECISION AS TO THE ACTION TO BE TAKEN IN THE MATTER.

IT APPEARS THAT IN RESPONSE TO REQUEST FOR PROPOSAL NO. WF-51-2420 DATED DECEMBER 7, 1950, ISSUED BY THE BASE CONTRACTING SECTION, WRIGHT PATTERSON AIR FORCE BASE, DAYTON, OHIO, HUGHES-PETERS, INCORPORATED, SUBMITTED A BID WHEREIN IT OFFERED TO FURNISH CERTAIN QUANTITIES OF DUMONT ELECTRIC CORPORATION NON-INDUCTIVE MIDGET PAPER CAPACITORS, TYPES P1-9A, P1-8B, P1- 7B, P1-5A, P2-4A AND P2-3A, ITEMS 1 THROUGH 6, RESPECTIVELY, AT A PRICE OF $0.185 EACH. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ALL ITEMS ON DECEMBER 27, 1950, AND PURCHASE ORDER NO. (33-096)51-6904-E, WAS ISSUED REQUESTING DELIVERY OF THE CAPACITORS.

BY LETTER DATED JANUARY 20, 1951, HUGHES-PETERS, INCORPORATED, ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

"WE HAVE JUST RECEIVED YOUR ORDER 33096-51-6904E AS A RESULT OF OUR SUBJECT BID.

"UPON RE-EXAMINING OUR QUOTATION WE FIND WE HAVE MADE A RATHER SERIOUS ERROR. WE ARE HEREWITH REQUESTING AN AMENDMENT ON THIS PURCHASE ORDER TO COMPENSATE FOR THAT ERROR.

"OUR QUOTATION WAS MADE BASED ON THE ASSUMPTION THAT OUR UNIT COST OF ALL ITEMS LISTED WAS .15[. HOWEVER, UPON PLACING THE ORDER WITH THE FACTORY THEY IMMEDIATELY ADVISED US THAT OUR COST IS .35[.

"BASED ON THIS LAST INFORMATION WE ARE SEEKING AN AMENDMENT TO CHANGE THE UNIT COST OF ALL ITEMS ON THIS ORDER FROM .181/2[ EACH, TO .43[ EACH. THIS CANNOT BE ACCOMPLISHED WE WOULD BE MOST HAPPY TO CONSIDER A CANCELLATION ON THIS ORDER.

"BEING SOMEWHAT AWARE OF ARMY AND GOVERNMENT REGULATIONS WE KNOW WE MUST PRESENT TO YOU BONIFIED PROOF THAT OUR CLAIM IS JUST. FIRST OF ALL THE QUESTION MAY BE ASKED, WHY WE ASSUMED OUR COST WAS .15[. THIS INFORMATION WAS CONFUSED IN A TELEGRAM FROM OUR SUPPLIER READING: 'RETEL PRICE .35[ EACH.' THE WORD 'RETEL' WAS WRITTEN IN LONG HAND WHEN TAKEN OVER THE TELEPHONE, AND WAS TAKEN TO MEAN 'RETAIL, OR LIST PRICE', AND OUR DISCOUNT FROM 35% LIST WOULD MAKE OUR COST APPROXIMATELY .15[ EACH."

IN SUPPORT OF ITS ALLEGATION OF ERROR THE CORPORATION SUBMITTED THE PRINTED PRICE LIST OF ITS SUPPLIER, DUMONT ELECTRIC CORPORATION, AND A TELEGRAM DATED JANUARY 15, 1951, RECEIVED FROM ITS SUPPLIER, IN WHICH IT WAS STATED:

"YOUR ORDER 1450D PRICES LISTED AS .15 EACH TELEGRAM SENT YOU QUOTED .35 EACH HOLDING ORDER ADVISE."

THE PRICE LIST OF THE CORPORATION'S SUPPLIER SPECIFIES LIST PRICE OF $0.60 EACH FOR TYPES P1-9A AND P1-8B CAPACITORS AND LIST PRICES OF $0.50 EACH AND $0.70 EACH FOR TYPES P1-7B AND P1-5A CAPACITORS, RESPECTIVELY. NO PRICES ARE SHOWN ON SAID PRICE LIST FOR TYPES P2-4A AND P2-3A CAPACITORS. IN HIS UNDATED REPORT THE CONTRACTING OFFICER STATES THAT THE RECORDS OF HIS OFFICE INDICATE THAT IDENTICAL MATERIAL PREVIOUSLY WAS PROCURED FROM THE DUMONT ELECTRIC CORPORATION - THE MANUFACTURER OF SAID MATERIAL - UNDER PURCHASE ORDERS NOS. (33-096) 49 2255, (33-096)49-6474, AND (33-096)40-11263, AND THAT SAID ORDERS INDICATE NET UNIT PRICES OF $0.25 AND $0.40 EACH AND LIST UNIT PRICES OF $0.50 TO $0.80 EACH.

ORDINARILY WHERE ONLY ONE BID IS RECEIVED ON AN ITEM - AS IN THE PRESENT CASE - THERE IS NO BASIS FOR COMPARISON OF BIDS; HENCE, THERE IS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. SEE 17 COMP. GEN. 560; AND 26 ID. 415. HOWEVER, IN THE PRESENT CASE, IT APPEARS THAT THE CONTRACTOR QUOTED LESS THAN ONE-HALF OF ITS INTENDED BID PRICE, WHICH IS ITS ESTABLISHED PRICE FOR THE ITEM IN QUESTION. ALSO, IT APPEARS THAT THE CONTRACTOR WAS NOT AWARDED ANY OTHER ITEMS ON WHICH IT COULD RECOUP ITS LOSS. UNDER THE CIRCUMSTANCES IT WOULD BE INEQUITABLE TO REQUIRE THE CONTRACTOR TO FURNISH THE CAPACITORS AT ITS BID PRICE.

ACCORDINGLY, PURCHASE ORDER NO. (33-096)51-6904-E MAY BE AMENDED TO PROVIDE FOR A PRICE OF $0.43 EACH FOR THE CAPACITORS CALLED FOR UNDER ITEMS 1 THROUGH 6 THEREOF, AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS - REFERENCE BEING MADE TO THIS DECISION ON THE VOUCHER OR VOUCHERS COVERING PAYMENT FOR SAID ITEMS.