B-121648, OCT 21, 1954

B-121648, OCT 21, 1954

PRECIS-UNAVAILABLE

MR. SECRETARY:

I HAVE YOUR LETTER OF SEPTEMBER 28, 1954, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR ALLEGED BY COLUMBIA SALES COMPANY TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. N228S-5877 DATED JULY 23, 1954, WAS AWARDED.

BY INVITATION NO. B-3-55 DATED JUNE 29, 1954, THE NAVAL SUPPLY CENTER, DISPOSAL DIVISION, OAKLAND, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS USABLE MATERIALS DESCRIBED UNDER ITEMS 1 TO 96, INCLUSIVE. THE MATERIALS OFFERED UNDER ITEM 91 WAS DESCRIBED AS:

"FRAMES, FOOD CARRIER, STEEL. CAPACITY - 5 CONTAINERS. CONTAINERS ARE PROVIDED WITH 2 SIDE LOOP HANDLES, EACH CONTAINER IS FORMED TO SERVE AS A COVER FOR THE CONTAINER IMMEDIATELY BENEATH IT. COVER FOR TOP CONTAINER HAS A STRAP HANDLE. FRAME HAS SLIDING RETAINER FOR CONTAINERS AND COMBINATION SLIDING RETAINER FOR CONTAINER WITH COVER.

"APPARENTLY UNUSED, IN GOOD CONDITION.

"APPROXIMATE WEIGHT 78,540 LBS., 5000 CUBE. IN 353 BOXES."

THE QUANTITY SPECIFIED UNDER ITEM 91 WAS 10,097 UNITS AND THE UNIT FOR PRICING PURPOSES WAS SPECIFIED AS "EACH." UNDER THE DESCRIPTION OF THE SAID ITEM BIDDERS WERE ADVISED THAT BIDS THEREON SHOULD BE FOR A MINIMUM OF 1,000 UNITS.

IN RESPONSE TO THE INVITATION, COLUMBIA SALES COMPANY SUBMITTED A BID IN WHICH IT QUOTED A PRICE OF $0.678 EACH FOR 1,000 OF THE UNITS COVERED BY ITEM 91. THE RECORD INDICATES THAT TEN OTHER BIDS WERE RECEIVED FOR ALL OR A PART OF THE MATERIALS COVERED BY THE ITEM, AND THAT THE NEXT THREE HIGHEST BIDS WERE $0.0351, $0.0198 AND $0.0101 EACH, RESPECTIVELY. AWARD WAS MADE TO COLUMBIA SALES COMPANY FOR 1,000 UNITS UNDER ITEM 91.

BY LETTER OF AUGUST 15, 1954, COLUMBIA SALES COMPANY CONFIRMED A PRIOR ORAL ALLEGATION OF ERROR IN ITS BID FOR ITEM 91 AND REQUESTED THAT THE AWARD AS TO THAT ITEM BE CANCELLED AND THE AMOUNT OF $678 PAID BY IT THEREFOR BE CREDITED TO ITS ACCOUNT FOR APPLICATION ON SOME FUTURE PURCHASE. THE COMPANY ASSERTED THAT THE AMBIGUITY IN THE DESCRIPTION OF THE MATERIALS OFFERED UNDER THE ITEM PROMPTED IT TO OBTAIN INFORMATION FROM THE DISPOSAL DIVISION THROUGH A TELEPHONE CALL PRIOR TO THE PREPARATION OF ITS BID, AS TO WHETHER FOOD CONTAINERS WERE INCLUDED; THAT ITS BID PRICE FOR THE ITEM WAS BASED ON THE INFORMATION SO OBTAINED, TO THE EFFECT THAT FOOD CONTAINERS AS WELL AS FRAMES WERE INCLUDED; AND THAT THE ERROR WAS DISCOVERED ONLY WHEN IT CALLED TO REMOVE THE MATERIALS AFTER NOTICE OF THE AWARD.

IN HIS UNDATED REPORT, THE CONTRACTING OFFICER INDICATES THAT THE FEAR THAT THE INFORMATION FURNISHED IN THE TELEPHONE CONVERSATION REFERRED TO BY THE COMPANY WAS ERRONEOUS OR WAS MISUNDERSTOOD PROMPTED THE DISPOSAL DIVISION TO CONTACT THE COMPANY BY TELEPHONE AGAIN PRIOR TO THE OPENING OF THE BIDS AND ADVISE IT THAT FOOD CONTAINERS WERE NOT INCLUDED IN THE MATERIAL OFFERED UNDER ITEM 91, AND THAT ANY BID SUBMITTED SHOULD BE BASED UPON PHYSICAL INSPECTION OF THE MATERIAL. HE STATED FURTHER THAT:

"*** THE HIGH BID OF $.678 PER EACH, SUBMITTED BY THE COLUMBIA SALES COMPANY, IS FAR IN EXCESS OF THE OTHER BIDS RECEIVED FOR THIS ITEM AND IT WOULD APPEAR THAT THIS BUSINESS FIRM INTENDED UTILIZING THE ITEM FOR THE PURPOSE FOR WHICH IT WAS ORIGINALLY MANUFACTURED; HOWEVER, WITHOUT THE CONTAINERS, IT IS NOT POSSIBLE TO SO EMPLOY THIS MATERIAL."

THE DESCRIPTION OF THE MATERIAL OFFERED UNDER ITEM 21 OBVIOUSLY IS AMBIGUOUS AND THE RECORD APPEARS TO WARRANT THE CONCLUSIONS THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED. FURTHERMORE, IN VIEW OF SUCH AMBIGUITY AND THE ATTEMPT OF THIS BIDDER TO CLEAR IT UP PRIOR TO THE SUBMISSION OF A BID, IT IS THE VIEW OF THIS OFFICE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR. THEREFORE, THE BID OF THE COMPANY, WHICH WAS APPROXIMATELY TWENTY TIMES THE NEXT HIGHEST BID, SHOULD NOT HAVE BEEN ACCEPTED WITHOUT A REQUEST FOR VERIFICATION OF THE BID PRICE ON ITEM 91. HENCE, TO RETAIN THE PURCHASE PRICE AND TRY TO FORCE THE FRAMES UPON THE COMPANY AT THE PRICE SPECIFIED IN ITS BID WOULD BE UNCONSCIONABLE AND TANTAMOUNT TO BAD FAITH ON THE PART OF THE GOVERNMENT.

ACCORDINGLY, CONTRACT NO. N228S-5877 SHOULD BE CANCELLED AS TO ITEM 91, WITHOUT LIABILITY TO COLUMBIA SALES COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S UNDATED STATEMENT AND RECOMMENDATION, ARE RETURNED HEREWITH.