B-108287, DEC 19, 1952

B-108287: Dec 19, 1952

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PRECIS-UNAVAILABLE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTERS DATED JULY 24. WITH WHICH THERE WAS FORWARDED FOR A REPORT A LETTER DATED JANUARY 23. WAS BASED. THE CORPORATION ADVISED AS FOLLOWS: "IT HAS BEEN BROUGHT TO OUR ATTENTION THAT AN ERROR WAS MADE IN THE PRICE QUOTED ON ABOVE MENTIONED ITEM. THE PRICE QUOTED WAS .10209 EACH. WHEREAS THE CORRECT PRICE IS 1.0209 EACH. THE RECORD CONTAINS A MEMORANDUM INDICATING THAT THE CORPORATION WAS ADVISED BY TELEPHONE ON OCTOBER 18. THAT THE CONTRACTING OFFICE WAS WITHOUT AUTHORITY TO MODIFY THE CONTRACT. ERROR IS APPARENT ON THE FACE OF THE BID SINCE THE UNIT PRICE MULTIPLIED BY THE QUANTITY DOES NOT EQUAL THE BID PRICE AS EXTENDED TO THE AMOUNT COLUMN.

B-108287, DEC 19, 1952

PRECIS-UNAVAILABLE

SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTERS DATED JULY 24, AND NOVEMBER 18, 1952, FROM THE DIRECTOR OF FINANCE, REPLYING TO LETTER OF MARCH 4, 1952, WITH WHICH THERE WAS FORWARDED FOR A REPORT A LETTER DATED JANUARY 23, 1952, WHEREIN GENERAL ELECTRIC SUPPLY CORPORATION ALLEGED THAT AN ERROR HAD BEEN MADE ON ITEM NO. 4 OF ITS BID DATED MARCH 28, 1952, ON WHICH PURCHASE ORDER NO. (42-014) 16002 DATED APRIL 7, 1951, WAS BASED.

IN RESPONSE TO REQUEST NO. 08B-1252-V, THE GENERAL ELECTRIC SUPPLY CORPORATION SUBMITTED A PROPOSAL DATED MARCH 28, 1951, IN WHICH IT OFFERED TO FURNISH, F.O.B. HILL AIR FORCE BASE, UTAH, 00 "TERMINAL ELEC ALUM SOLDERLESS CABLE SIZE 00 STUD HOLE .390" DIA THOMAS & BETTS OR EQUAL KC73," ITEM NO. 4 AT $102.09 PER THOUSAND AND EXTENDED THE PRICE TO THE TOTAL PRICE COLUMN AS $10.21.

IN A LETTER DATED OCTOBER 1, 1951, THE CORPORATION ADVISED AS FOLLOWS:

"IT HAS BEEN BROUGHT TO OUR ATTENTION THAT AN ERROR WAS MADE IN THE PRICE QUOTED ON ABOVE MENTIONED ITEM. THE PRICE QUOTED WAS .10209 EACH, WHEREAS THE CORRECT PRICE IS 1.0209 EACH.

"INASMUCH AS THIS ERROR WOULD MAKE THE SELLING PRICE SOME $200.00 UNDER OUR COST, WE WOULD APPRECIATE IT VERY MUCH IF YOU COULD EITHER GIVE US A PRICE CHANGE OR CANCEL THE ORDER."

THE RECORD CONTAINS A MEMORANDUM INDICATING THAT THE CORPORATION WAS ADVISED BY TELEPHONE ON OCTOBER 18, 1951, THAT THE CONTRACTING OFFICE WAS WITHOUT AUTHORITY TO MODIFY THE CONTRACT, THAT SHIPMENT OF THE MATERIAL SHOULD BE EFFECTED AT THE CONTRACT PRICE AND THEREAFTER THE PROPER PROCEDURE WOULD BE TO FILE A CLAIM FOR THE DIFFERENCE BETWEEN THE CONTRACT PRICE AND THE ALLEGED CORRECT PRICE. PURSUANT THERETO, THE CORPORATION, BY LETTER OF JANUARY 23, 1952, REQUESTED THIS OFFICE TO AUTHORIZE AN AMENDMENT TO THE CONTRACT TO PROVIDE FOR AN INCREASE IN THE CONTRACT PRICE.

ERROR IS APPARENT ON THE FACE OF THE BID SINCE THE UNIT PRICE MULTIPLIED BY THE QUANTITY DOES NOT EQUAL THE BID PRICE AS EXTENDED TO THE AMOUNT COLUMN. IT WOULD APPEAR THAT THIS INCONSISTENCY BETWEEN THE UNIT PRICE AND THE TOTAL BID PRICE SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. THEREFORE, THE CORPORATION SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRICE ON ITEM NO. 4 PRIOR TO AWARD OF THAT ITEM. CONSEQUENTLY, THE ACCEPTANCE OF THE BID AS TO THAT ITEM DID NOT OBLIGATE THE CONTRACTOR TO FURNISH THE ARTICLES CALLED FOR THEREUNDER AT $0.10209 EACH.

A COPY OF A BID OF THE GENERAL ELECTRIC SUPPLY CORPORATION, DATED APRIL 13, 1952 - ALSO SUBMITTED TO THE BASE IN RESPONSE TO A REQUEST FOR PROPOSAL BEARING THE SAME DATE AS THE ABOVE-CITED PURCHASE ORDER - SHOWS THAT THE CORPORATION QUOTED THEREIN A PRICE OF $0.76 EACH FOR 1,000 OF IDENTICAL ARTICLES OF ELECTRICAL SUPPLY. IT IS REPORTED THAT THE CORPORATION WAS NOT THE SUCCESSFUL BIDDER IN THAT PROCUREMENT SINCE A LOWER BID OF $0.73 EACH WAS RECEIVED. UPON BEING REQUESTED TO JUSTIFY ITS REQUEST FOR THE ALLEGED CORRECT PRICE OF $1.0209 EACH FOR ITEM NO. 4 IN VIEW OF ITS OFFER AT ABOUT THE SAME TIME TO FURNISH THE SAME ARTICLE AT $0.76 EACH, THE CORPORATION FORWARDED A COPY OF A TELETYPE MESSAGE FROM ITS SUPPLIER QUOTING PRICES ON VARIOUS ITEMS INCLUDING A QUOTATION OF $102.09 PER HUNDRED FOR "200 KC73 ALUM LUGS," UPON THE BASIS OF WHICH THE CORPORATION CONTENDED THAT ITS BID PRICE OF $102.09 PER THOUSAND ERRONEOUSLY WAS BASED. AS TO THE REFERENCE TO BID OF $0.76 EACH, IT ADVISED AS FOLLOWS:

"AT THAT TIME WE CONTACTED THE BURNDY ENGINEERING COMPANY IN VERNON, CALIFORNIA, FOR A QUOTATION AND THEY GAVE US THE PRICE WHICH WE QUOTED. THIS DIFFERENCE HAD NOT BEEN NOTICED UNTIL BROUGHT TO OUR ATTENTION BY YOUR LETTER OF SEPTEMBER 3, 1952.

"IN REVIEWING OUR WORK PAPERS ON THIS PROPOSAL WE NOTICE THAT THE WORD ALUMINUM WAS NOT SPECIFIED IN OUR REQUEST TO BURNDY SO WE BELIEVE THE REASON FOR THE GREAT DIFFERENCE IN THIS PROPOSAL AND THE ONE IN QUESTION, YOUR P. O. 42-014 (16002), IS THAT ONE WAS BID ON THE BASIS OF A STANDARD LUG FOR COOPER WIRE AND THE HIGHER PRICED ONE WAS THE SPECIAL ONE FOR ALUMINUM. ALSO, THE FACT THAT WE WERE USING BURNDY PRICES INSTEAD OF THOMAS & BETTS PRICES WOULD MAKE A DIFFERENCE."

THE FACTS OF RECORD REASONABLY INDICATE THAT THE GENERAL ELECTRIC SUPPLY CORPORATION MADE A BONA FIDE MISTAKE, AS ALLEGED, IN QUOTING A PRICE OF $0.1029 EACH ON ITEM NO. 4 IN VIEW OF THE LOWER BID PRICES RECEIVED IN THE REFERRED-TO SUBSEQUENT PROCUREMENT OF IDENTICAL SUPPLIES, THE CONTENTS OF THE CONTRACTOR'S LETTER PROPERLY MAY NOT BE ACCEPTED AS ESTABLISHING CONCLUSIVELY THAT $1.0209 EACH REPRESENTS THE SUPPLIER'S CORRECT APPLICABLE PRICE, OR THE FAIR AND REASONABLE VALUE, OF THE ARTICLES HERE INVOLVED. ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE TO THE CORPORATION AT A PRICE NOT TO EXCEED $0.73 EACH, WHICH APPEARS TO BE A FAIR AND REASONABLE PRICE FOR THE ITEM.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE ADDITIONAL PAYMENT TO THE CORPORATION.