B-124121, JUN. 23, 1955

B-124121: Jun 23, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED MAY 25. WAS AWARDED. THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION SINCE AN AWARD HAS BEEN MADE IN THE PRESENT CASE. SINCE A DECISION IS NECESSARY. IT IS BEING ADDRESSED TO YOU. THE TYPE OF BEDSPRINGS REQUIRED UNDER ITEM 1 WAS CHANGED FROM BOX STYLE COIL SPRING CONSTRUCTION TO OPEN STYLE COIL SPRING CONSTRUCTION. IT IS STATED THAT A REPRESENTATIVE FROM THE EWING MATTRESS COMPANY WAS PRESENT AT THE BID OPENING AND THAT IMMEDIATELY AFTER THE READING OF THE BIDS. HE CLAIMED THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT THE UNIT PRICES FOR THE BEDSPRINGS AND MATTRESSES WERE REVERSED. STATED THAT BECAUSE THE MATTRESSES WERE URGENTLY NEEDED AND SINCE THE COMPANY'S INTENDED BID PRICE FOR THAT ITEM WAS LOWER THAN ANY OF THE OTHER BIDS RECEIVED.

B-124121, JUN. 23, 1955

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED MAY 25, 1955, FROM THE COMMANDER, 3600TH COMBAT CREW TRAINING WING (FIGHTER), LUKE AIR FORCE BASE, GLENDALE, ARIZONA, FORWARDING AN UNDATED STATEMENT, WITH ENCLOSURES, FROM CAPTAIN D. A. COSCARELLI, CONTRACTING OFFICER, LUKE AIR FORCE BASE, GLENDALE, ARIZONA, AND REQUESTING THAT A DECISION BE RENDERED TO THE CONTRACTING OFFICER AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR THE EWING MATTRESS COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. AF 02/604/-221 DATED MAY 20, 1955, WAS AWARDED.

THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION SINCE AN AWARD HAS BEEN MADE IN THE PRESENT CASE. SEE 26 COMP. GEN. 993; 28 ID. 401. HOWEVER, SINCE A DECISION IS NECESSARY, IT IS BEING ADDRESSED TO YOU.

BY INVITATION NO. 02-604-55-32, DATED APRIL 26, 1955, THE PURCHASING AND CONTRACTING OFFICE, LUKE AIR FORCE BASE, GLENDALE, ARIZONA, REQUESTED BIDS FOR FURNISHING 145 BEDSPRINGS AND 145 MATTRESSES AS DESCRIBED UNDER ITEMS 1 AND 2, RESPECTIVELY. BY AMENDMENT NO. 1 DATED MAY 3, 1955, THE TYPE OF BEDSPRINGS REQUIRED UNDER ITEM 1 WAS CHANGED FROM BOX STYLE COIL SPRING CONSTRUCTION TO OPEN STYLE COIL SPRING CONSTRUCTION. IN RESPONSE TO THE INVITATION, THE EWING MATTRESS COMPANY SUBMITTED A BID OFFERING TO FURNISH UNDER THE ORIGINAL ITEM 1 BEDSPRINGS AT A PRICE OF $19 EACH AND TO FURNISH UNDER ITEM 2 MATTRESSES AT A PRICE OF $17 EACH. THE COMPANY ALSO SUBMITTED ANOTHER BID, ON AMENDMENT NO. 1, OFFERING TO FURNISH UNDER ITEM 1 THEREOF BEDSPRINGS AT A PRICE OF $17 EACH.

IN AN UNDATED STATEMENT FROM THE CONTRACTING OFFICER, IT IS STATED THAT A REPRESENTATIVE FROM THE EWING MATTRESS COMPANY WAS PRESENT AT THE BID OPENING AND THAT IMMEDIATELY AFTER THE READING OF THE BIDS, HE CLAIMED THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT THE UNIT PRICES FOR THE BEDSPRINGS AND MATTRESSES WERE REVERSED, AND THAT AT SUCH TIME THE REPRESENTATIVE EXHIBITED THE COMPANY'S WORKSHEETS IN SUPPORT OF THE ALLEGED ERROR. IN HIS LETTER OF MAY 25, 1955, THE COMMANDER, 3600TH COMBAT CREW TRAINING WING (FIGHTER), STATED THAT BECAUSE THE MATTRESSES WERE URGENTLY NEEDED AND SINCE THE COMPANY'S INTENDED BID PRICE FOR THAT ITEM WAS LOWER THAN ANY OF THE OTHER BIDS RECEIVED, THE BID OF THE EWING MATTRESS COMPANY, AS TO ITEM 2, WAS ACCEPTED ON THE BASIS OF ITS BID PRICE OF $17 EACH.

BY LETTER DATED MAY 21, 1955, THE COMPANY CONFIRMED ITS VERBAL ALLEGATION OF ERROR AND REQUESTED THAT THE CONTRACT PRICE OF THE MATTRESSES BE CHANGED FROM $17 EACH TO $19 EACH--- ITS ALLEGED INTENDED BID PRICE. ITS LETTER THE COMPANY STATED---

"IT IS CUSTOMARY IN THE BEDDING INDUSTRY TO FIGURE THE COST OF THE MATTRESS FIRST AS IT IS A MORE EXPENSIVE ITEM THAN THE SPRING I FIGURED A NET PROFIT ON EACH ITEM OF $2.50 AND ADDED IT TO THE NET COST OF THE MATTRESS OF $16.50, MAKING A TOTAL OF $19.00. THIS UNIT PRICE OF $19.00 WAS PLACED IN ERROR IN ITEM NO. 1 AND EXTENDED TO $2755.00. I THEN FIGURED THE COST OF THE BEDSPRING TO BE $14.50, ADDED THE $2.50 PROFIT, PLACED THE UNIT PRICE OF $17.00 IN ERROR IN ITEM NO. 2 AND EXTENDED IT TO $2465.00.

"I THEN TRANSFERRED THE ITEM NO. 2 FIGURES TO THE AMENDMENT SHEET AS IN MY MIND I THOUGHT THE BEDSPRING WAS SECOND. AFTER THESE TOTALS WERE ENTERED I FILLED IN THE REMAINDER OF THE INVITATION. I WOULD LIKE TO CALL ATTENTION TO ITEM 14B IN THE TERMS AND CONDITIONS, ESTIMATED PERCENTAGE OF PROFIT. FIGURING $2.50 NET PROFIT ON AN ITEM OF $19.00 WOULD AMOUNT TO A PROFIT OF 13 PERCENT. BECAUSE OF A FEW EXPENSES THAT CANNOT BE ANTICIPATED ON AN ORDER OF THIS NATURE I F/I/GURED THAT OUR NET PROFIT WOULD BE APPROXIMATELY 12.5 PERCENT, AS I INDICATED IN ITEM 14B OF TERMS AND CONDITIONS. HAD I FIGURED A $ .50 PROFIT ON A $17.00 ITEM AS SUCH WOULD BE THE CASE IF MY REQUEST FOR CHANGE IS NOT GRANTED, THEN MY PROFIT WOULD BE LESS THAN 3 PERCENT.'

IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS WORKSHEETS WHICH SHOW THAT IT ESTIMATED THE COST OF THE BEDSPRING AS $14.50 AND THE COST OF THE MATTRESS AS $16.50. UNDER PARAGRAPH 14 (B) OF THE TERMS AND CONDITIONS OF THE INVITATION FOR BIDS, THE COMPANY LISTED ITS ESTIMATED PERCENTAGE OF PROFIT AS BEING 12.5 PERCENT AND, IF THAT PERCENTAGE IS APPLIED TO THE AMOUNT OF $16.50--- THE COMPANY'S ESTIMATED COST OF THE MATTRESS--- THE TOTAL WILL BE APPROXIMATELY $19.

THE EWING MATTRESS COMPANY QUOTED AN IDENTICAL PRICE OF $17 FOR THE BEDSPRING REQUIRED UNDER ITEM 1 AND FOR THE MATTRESS REQUIRED UNDER ITEM 2. IT SEEMS OBVIOUS THAT THE COMPANY DID NOT INTEND TO QUOTE AN IDENTICAL PRICE FOR ITEMS 1 AND 2, SINCE ITEM 2 APPEARS TO BE A MORE EXPENSIVE ITEM THAN ITEM 1. ALSO, THE ABSTRACT OF BIDS SHOWS THAT EACH OF THE THREE OTHER BIDDERS QUOTED A HIGHER PRICE FOR ITEM 2 THAN FOR ITEM 1.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE EWING MATTRESS COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED, AND IT IS APPARENT THAT THE INTENDED BID PRICE FOR ITEM 2 WAS $19 EACH. ACCORDINGLY, CONTRACT NO. AF 02/604/-221 MAY BE AMENDED TO INCREASE THE UNIT PRICE FOR ITEM 2 TO $19, WHICH AMOUNT IS STILL LOWER THAN THE NEXT- LOWEST BID RECEIVED ON THAT ITEM, AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT. THE CONTRACTING OFFICER'S UNDATED STATEMENT, THE ABSTRACT OF BIDS AND THE CONTRACTOR'S WORKSHEETS ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.