B-121202, JUL. 20, 1955

B-121202, JUL. 20, 1955

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 26, 1954, WITH ENCLOSURES, RELATIVE TO AN ERROR ALLEGED BY UNIVERSAL CONCRETE PIPE COMPANY TO HAVE BEEN MADE IN ITS BID DATED MAY 7, 1954, ON WHICH CONTRACT NO. DA-28-013-AI -1300 DATED MAY 12, 1954, WAS BASED. YOU REQUEST A DECISION AS TO WHETHER THE RELIEF SOUGHT BY THE CONTRACTOR PROPERLY MAY BE GRANTED.

UPON COMPARING THE CONTRACTOR'S BID OF $24,097.70 WITH THE ONLY OTHER BID OF $26,714.60, THE CONTRACTING OFFICER PROPERLY TOOK NOTICE OF THE PROBABILITY OF ERROR IN THE CONTRACTOR'S BID. THE COST OF DELIVERY WAS KNOWN TO BE A SUBSTANTIAL FACTOR IN ANY BID RECEIVED IN RESPONSE TO THE INSTANT INVITATION, DUE TO THE WEIGHTY CHARACTER OF THE MATERIAL INVOLVED. IN VIEW THEREOF, THE DIFFERENCE BETWEEN THE COMPANY'S BID AND THE OTHER BID APPEARED CONSIDERABLE, AS THE CONTRACTING OFFICER STATES, SINCE THE COMPANY WAS REQUIRED TO SHIP FROM WEST VIRGINIA, WHEREAS THE HIGHER BIDDER'S SHIPPING POINT WAS IN NEARBY NEW YORK. BY REASON THEREOF THE CONTRACTOR WAS REQUIRED TO VERIFY ITS BID. BY LETTER OF MAY 10, 1954, THE CONTRACTOR ADVISED THAT ITS BID WAS BASED ON THE INVITATION ITSELF WHICH, WHEN RECEIVED, WAS UNACCOMPANIED BY THE COMPLETE SPECIFICATIONS AND, CONSEQUENTLY, THE BID PRICE WAS INTENDED TO INCLUDE TRANSPORTATION BY RAILROAD TO FORT DIX ONLY, THE DESTINATION SPECIFIED IN THE FIRST PARAGRAPH OF THE INVITATION. THEREFORE, PERMISSION WAS REQUESTED TO INCREASE THE BID OF $2,602.30, TO $26,700, SO AS TO INCLUDE THE ESTIMATED TRUCKING COST IN TRANSPORTING THE MATERIAL FROM THE RAILHEAD IN FORT DIX TO RANGE 16, A DISTANCE OF APPROXIMATELY FIVE MILES. SINCE THE BID, IF CORRECTED, STILL WOULD BE THE LOW BID, THE CONTRACT WAS AWARDED TO THE COMPANY SUBJECT TO CORRECTION IN PRICE, IF AUTHORIZED BY THE GENERAL ACCOUNTING OFFICE.

THE RECORD SHOWS THAT SHORTLY AFTER THE AWARD CERTAIN CHANGES WERE MADE IN THE CRIB WALL DESIGN AND CHANGE ORDER NO. 1, ISSUED JUNE 1, 1954, PROVIDED FOR MODIFICATION OF THE CONTRACT IN CERTAIN PARTICULARS, INCLUDING THE FOLLOWING CONCLUDING PROVISIONS:

"* * * THE CONTRACT PRICE WHICH NOW READS $24,097.70 IS HEREBY CHANGED TO READ $19,654.66, AS MUTUALLY AGREED.

"IT IS UNDERSTOOD AND AGREED THAT ALL OTHER TERMS AND CONDITIONS OF SAID CONTRACT SHALL BE AND REMAIN THE SAME.'

SINCE THE ORIGINAL CONTRACT AWARD WAS UPON THE EXPRESS CONDITION THAT THE CONTRACT PRICE WAS ,SUBJECT TO CORRECTION IF AUTHORIZED BY THE GENERAL ACCOUNTING OFFICE," THE MODIFIED CONTRACT PRICE, PURSUANT TO THE AGREEMENT SET FORTH IN THE FINAL PARAGRAPH OF THE CHANGE ORDER, ALSO WAS FIXED UPON THE SAME BASIS, NO ADJUSTMENT HAVING BEEN MADE THEREIN TO INCLUDE ANY COMPENSATION FOR THE TRUCKING SERVICE INVOLVED IN THE CONTRACTOR'S PENDING CLAIM FOR RELIEF.

ACCORDING TO THE CONTRACTOR'S BREAKDOWN OF THE FACTORS ON WHICH ITS BID WAS BASED, THE BID PRICE INCLUDED ONLY THE MATERIAL, AMOUNTING TO $19,977.95, PLUS $4,119.75, THE CONTRACTOR'S ESTIMATE OF THE APPLICABLE FREIGHT CHARGES THEREON TO FORT DIX. ON THE FACE OF THE BID IT WAS AT LEAST QUESTIONABLE WHETHER THE COMPANY PROPOSED TO FURNISH THE SERVICE OF TRUCKING THE MATERIAL FROM FORT DIX TO RANGE 16, SINCE THE INVITATION PROPER EXPRESSLY PROVIDED FOR DELIVERY F.O.B. FORT DIX, WHEREAS THE TECHNICAL PROVISIONS, INCORPORATED IN THE INVITATION AS A PART THEREOF, AND CALLING FOR DELIVERY F.O.B. RANGE 16 WERE SO INCONSISTENT AS TO PRODUCE AN OBVIOUS AMBIGUITY AND UNCERTAINTY. EVEN IF THE BID COULD PROPERLY HAVE BEEN CONSTRUED AS BINDING THE BIDDER TO THE INCONSISTENT PROVISIONS OF THE SPECIFICATIONS, THE CONTRACTING OFFICER WAS FULLY ADVISED BEFORE AWARD THAT IT WAS NOT SO INTENDED, AND HIS ACCEPTANCE THEREFORE CONSUMMATED A CONTRACT ONLY FOR DELIVERY F.O.B. FORT DIX. RESPONSE TO THE REQUEST, IN OFFICE LETTER OF MARCH 25, 1955, FOR DATA IN SUPPORT OF THE CONTRACTOR'S CLAIM, THERE HAVE BEEN PRESENTED PHOTOSTATIC COPIES OF THE APPLICABLE RAILROAD FREIGHT BILLS, INVOICES COVERING THE TRUCKING SERVICES FOR WHICH REIMBURSEMENT IS REQUESTED, AND CANCELED CHECKS IN PAYMENT THEREOF. WITH RESPECT THERETO, MR. BUDERMAN, THE CONTRACTOR'S REPRESENTATIVE, ADVISED THAT THE PENDING CLAIM FOR REIMBURSEMENT OF THE AMOUNT PAID BY THE CONTRACTOR FOR TRUCKING SERVICES MAY BE REDUCED TO THE EXTENT THAT THE PRICE OF $19,654.66 FIXED IN CHANGE ORDER "A" EXCEEDS THE AGGREGATE OF ITS BID PRICE FOR THE MATERIAL ACTUALLY FURNISHED, PLUS THE APPLICABLE RAILROAD FREIGHT CHARGES THEREON TO FORT DIX.

ON THE BASIS OF THE DOCUMENTS FURNISHED, IT NOW HAS BEEN ESTABLISHED SATISFACTORILY THAT THE AMOUNT OF $4,042.39 WAS PAID FOR RAILROAD FREIGHT SERVICE AND THAT THE AMOUNT PAID FOR THE REQUIRED TRUCKING SERVICES WAS $1,599.42, AS CLAIMED. THE CONTRACTOR'S PRICE FOR THE 3,826 PIECES OF CRIBBING FURNISHED, BASED ON THE UNIT PRICES ON WHICH THE BID WAS COMPUTED, AMOUNTS TO $15,312.42, AND BY ADDING THERETO THE SUM OF $84 REPRESENTING THE INVOICED DELIVERED COST OF THE ,EXPANSION JOINT MATERIAL" NOT CALLED FOR UNDER THE ORIGINAL CONTRACT, THERE IS OBTAINED AS THE PRICE FOR ALL THE CONTRACT MATERIAL DELIVERED THE AMOUNT OF $15,396.42. SINCE THE PAID RAILROAD FREIGHT BILLS AMOUNTED TO $4,042.39, THE AGGREGATE PRICE OF THE MATERIAL PLUS FREIGHT IS $19,438.81 ($15,396.42, PLUS $4,042.39); AND SINCE THE ADJUSTED PRICE SPECIFIED IN THE CHANGE ORDER EXCEEDS THE AGGREGATE AMOUNT OF THE PRICE OF THE MATERIALS PLUS FREIGHT BY $215.85 ($19,654.66 MINUS $19,438.81), THE CONTRACTOR'S CLAIM FOR REIMBURSEMENT OF THE TRUCKING COSTS IN THE AMOUNT OF $1,599.42 MAY BE REDUCED TO THAT EXTENT, OR TO $1,383.57 PURSUANT TO THE AFOREMENTIONED AUTHORIZATION.

ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE TO THE UNIVERSAL CONCRETE PIPE COMPANY OF THE SUM OF $1,383.57, IN ADDITION TO THE PRICE SPECIFIED IN THE CHANGE ORDER AND HERETOFORE PAID, FOR EFFECTING DELIVERY OF THE CONTRACT MATERIAL, AS REQUIRED, TO RANGE 16.