B-104580, OCT 15, 1951

B-104580, OCT 15, 1951

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED AUGUST 31, 1951, WITH ENCLOSURES FROM THE OFFICE OF THE DIRECTOR OF FINANCE, SUBMITTED IN RESPONSE TO LETTER DATED JULY 24, 1951, REQUESTING A REPORT RELATIVE TO AN ERROR ALLEGED BY THE BENDIX AVIATION CORPORATION, ECLIPSE-PIONEER DIVISION, TETERBORO, NEW JERSEY, TO HAVE BEEN MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT DATED APRIL 12, 1951, IS BASED.

IT APPEARS THAT IN RESPONSE TO REQUEST NO. 031-1-51-303, DATED MARCH 9, 1951, ISSUED BY THE TINKER AIR FORCE BASE, OKLAHOMA CITY, OKLAHOMA, THE BENDIX AVIATION CORPORATION SUBMITTED A BID DATED APRIL 2, 1951, OFFERING TO FURNISH 400 NO. 70715-NUT-VACUUM RELIEF VALVE-APPL. 613-1A 4A AT A PRICE OF $0.27 EACH, OR FOR A TOTAL CONSIDERATION OF $108. ALSO IT APPEARS THAT NO OTHER BIDS ON THE VALVE NUTS WERE SOLICITED BECAUSE THEY ARE PROPRIETORY TO THE BENDIX AVIATION CORPORATION. THE BID OF THE CORPORATION WAS ACCEPTED ON APRIL 12, 1951, AND PURCHASE ORDER NO. (34- 024) 51-17446 WAS ISSUED REQUESTING DELIVERY OF THE PARTS.

BY TELEGRAM DATED MAY 28, 1951, THE BENDIX AVIATION CORPORATION ALLEGED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICE OF THE VALVE NUTS SHOULD HAVE BEEN $2.70 EACH INSTEAD OF $0.27 EACH. IN REPLY THERETO, THE CONTRACTING OFFICER ADVISED THE CORPORATION BY LETTER DATED MAY 29, 1951, THAT HE WAS WITHOUT AUTHORITY TO GRANT THE RELIEF REQUESTED BUT THAT AFTER PERFORMANCE, A CLAIM FOR ADDITIONAL COMPENSATION COULD BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE.

IN A LETTER DATED JUNE 6, 1951, ADDRESSED TO THE U.S. AIR FORCE, THE BENDIX AVIATION CORPORATION REQUESTED THAT SAID PURCHASE ORDER BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $2.70 FOR THE VALVE NUTS AND STATED THAT THE ERROR IN ITS BID WAS MADE BY ITS COST DEPARTMENT IN MISPLACING THE DECIMAL POINT IN SAID UNIT PRICE. WITH SAID LETTER THE CORPORATION FURNISHED A COST BREAKDOWN ON THE VALVE NUTS. SAID COST ESTIMATE SHOWS THE PRICES FOR MATERIALS, LABOR, GENERAL AND ADMINISTRATIVE EXPENSE AND PROFIT WITH RESPECT TO THE MANUFACTURE OF ONE VALVE NUT WHICH PRICES TOTAL $2.65, TO WHICH WAS ADDED A TRANSPORTATION CHARGE OF $0.05 TO ARRIVE AT A TOTAL OF $2.70 - THE CORPORATION'S ALLEGED INTENDED PRICE.

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 OFFICE 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 FROM THE FACTS AND EVIDENCE OF RECORD THAT THE CORPORATION MADE A BONA FIDE ERROR IN QUOTING ON THE VALVE NUTS DUE TO MISPLACING A DECIMAL POINT IN SAID UNIT PRICE, AND THAT NO OTHER ITEMS WERE AWARDED TO THE CORPORATION ON WHICH IT COULD RECOUP ITS LOSS. UNDER THE CIRCUMSTANCES, IT WOULD BE INEQUITABLE TO REQUIRE THE CORPORATION TO FURNISH THE VALVE NUTS AT ITS BID PRICE.

ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE AT A PRICE OF $2.70 EACH FOR THE VALVE NUTS, AS RECOMMENDED - REFERENCE BEING MADE TO THIS DECISION ON THE VOUCHER COVERING PAYMENT FOR SAID ITEM.