B-116083, AUG 21, 1953

B-116083, AUG 21, 1953

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JULY 6, 1953, FROM THE OFFICE OF THE DIRECTOR OF FINANCE, FORWARDING A COMMUNICATION DATED MAY 29, 1953, FROM SEYMOUR BLATT, LIEUTENANT COLONEL, USAF, CONTRACTING OFFICER, HEADQUARTERS UNITED STATES AIR FORCES IN EUROPE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY W. H. HAYDEN AND COMPANY, LTD., TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. AF 61(514)-355 DATED MARCH 9, 1953, IS BASED.

SINCE THE 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 PROMPT DECISION APPEARS NECESSARY, THE DECISION IS BEING ADDRESSED TO YOU.

UNDER THE TERMS OF THE CITED CONTRACT, W. H. HAYDEN AND COMPANY, LTD., AGREED TO FURNISH, AMONG OTHER ITEMS, 5,258 BOXES OF PAPER FASTENERS, 1" SHANK, FOR $0.09 PER BOX OF 144 (ONE GROSS), ITEM 1, AND TO FURNISH 3,587 BOXES OF PAPER FASTENERS WITH A 2" SHANK, FOR $0.10 PER BOX OF 144 (ONE GROSS), ITEM 2. THE TOTAL CONTRACT PRICE FOR THE FASTENERS REQUIRED UNDER ITEMS 1 AND 2 IS $831.92.

BY LETTER DATED MAY 21, 1953, W. H. HAYDEN AND COMPANY, LTD., ADVISED THAT IN QUOTING ON ITEMS 1 AND 2 OF THE CONTRACT (ITEMS 133 AND 134 OF REQUEST FOR PROPOSAL NO. 53-807), IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD QUOTED ONLY ONE-TWELFTH OF ITS INTENDED BID PRICES FOR SAID ITEMS; THAT THE CORRECT PRICES FOR ITEMS 1 AND 2 ARE $1.155 AND $1.449 PER BOX OF 144, RESPECTIVELY, AND, THEREFORE, THE COMPANY REQUESTED THAT THE CONTRACT PRICES OF ITEMS 1 AND 2 BE CORRECTED ACCORDINGLY. THE COMPANY SUBMITTED IN SUPPORT OF ITS ALLEGATION OF ERROR, A COPY OF A QUOTATION RECEIVED FROM FISK, DAVEY & COMPANY, ASTON, BIRMINGHAM 6, ENGLAND, WHEREIN W. H. HAYDEN AND COMPANY, LTD., WAS QUOTED A PRICE, AS CONVERTED, OF $12.04 PER GREAT GROSS (12 GROSS) FOR THE PAPER FASTENERS REQUIRED UNDER ITEM 1, AND A PRICE, AS CONVERTED, OF $15.12 PER GREAT GROSS (12 GROSS) FOR THE PAPER FASTENERS REQUIRED UNDER ITEM 2 OF THE CONTRACT. IN SAID LETTER THE COMPANY STATED THAT TO ITS SUPPLIER'S PRICES SHOULD BE ADDED 15 PERCENT TO COVER THE COST OF BOXING AND LABELLING AND THE ITEM OF PROFIT.

IT IS REPORTED THAT ONLY ONE OTHER BID ON THE PAPER FASTENERS WAS RECEIVED IN RESPONSE TO THE INVITATION AND THAT SAID BID, AFTER CORRECTION FOR DEDUCTIBLE TAXES AMOUNTS TO $0.492754 PER BOX FOR ITEM 133, AND TO $0.6973 PER BOX FOR ITEM 134 OF THE INVITATION.

ORDINARILY, NO FAIR COMPARISON WITH OTHER BIDS CAN BE MADE WHERE ONLY TWO WIDELY VARIANT BIDS ARE RECEIVED ON AN ITEM - AS IN THE PRESENT CASE - THERE BEING MORE REASON FOR CONSIDERING A LOW BID TOO LOW THAN FOR CONSIDERING THAT A MISTAKE WAS MADE BY THE HIGH BIDDER IN QUOTING A PRICE TOO HIGH. SEE 20 COMP. GEN. 286. HOWEVER, WHEN THERE IS CONSIDERED THE NATURE OF THE ITEM AND THE NUMBER OF PAPER FASTENERS TO BE PACKED IN A BOX (144), IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID OF $0.09 AND $0.10 PER BOX FOR ITEMS 133 AND 134, RESPECTIVELY, AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION THEREOF.

ALTHOUGH THERE APPEARS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE A BONA FIDE ERROR ON ITEMS 133 AND 134 OF ITS BID, AS ALLEGED, IF THE BIDS ON SAID ITEMS WERE INCREASED TO THE AMOUNTS ALLEGEDLY INTENDED, THEY WILL NOT BE THE LOWEST BIDS THEREON. ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE FOR ANY PAPER FASTENERS DELIVERED UNDER ITEMS 1 AND 2 OF THE CONTRACT IN THE AMOUNTS OF THE NEXT LOWEST RESPECTIVE BIDS THEREON.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.

A DUPLICATE SET OF THE PAPERS IN THE CASE IS BEING RETAINED IN THIS OFFICE. THE OTHER SET OF PAPERS IN THE CASE IS RETURNED HEREWITH.