B-124622, JUL. 21, 1955

B-124622, JUL. 21, 1955

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JULY 12, 1955, WITH ENCLOSURES, FROM THE ACTING CHIEF PURCHASING AGENT, VETERANS ADMINISTRATION, RELATIVE TO ERRORS ALLEGED BY LILY-TULIP CUP CORPORATION AND BY ARLINGTON SALES AGENCY, INC., TO HAVE BEEN MADE IN THEIR BIDS, DATED JUNE 16 AND JUNE 22, 1955, RESPECTIVELY, SUBMITTED IN RESPONSE TO INVITATION NO. VB-77. DECISION IS REQUESTED AS TO THE ACTION TO BE TAKEN WITH RESPECT TO THE TWO BIDS IN VIEW OF THE ALLEGATIONS OF ERROR.

THE RECORD SHOWS THAT BIDS WERE REQUESTED--- TO BE OPENED JUNE 24, 1955-- - FOR FURNISHING TUBES, EACH CONTAINING 50 7-OZ. DRINKING CUPS WITH LIDS, FOR DELIVERY IN QUANTITIES AND TO DESTINATIONS AS FOLLOWS: 2,400 TUBES TO SOMERVILLE, NEW JERSEY, ITEM NO. 1; 1,800 TO WILMINGTON, CALIFORNIA, ITEM NO. 2; AND 2,400 TO HINES, ILLINOIS, ITEM NO. 3. THE THREE BIDS RECEIVED WERE AS FOLLOWS:

CHART

ITEM 1 ITEM 2 ITEM 3 ARLINGTON SALES AGENCY, INC. $9.40 PER 1,000 NO BID $9.40 PER 1,000 LILY-TULIP CUP CORPORATION 0.994 EACH $1.037 0.994 EACH DIXIE CUP COMPANY 1.10 EACH 1.15 1.10 EACH

SINCE THE BID OF LILY-TULIP CUP CORPORATION ON ALL THE ITEMS WAS DOUBLE THE AMOUNT IT QUOTED FOR LIKE SUPPLIES IN OCTOBER, 1954, AS THE SUCCESSFUL BIDDER ON INVITATION NO. VB-17, AND SINCE THE BID OF ARLINGTON SALES AGENCY, INC. WAS ON ITS FACE NOT RESPONSIVE IN SEVERAL RESPECTS, VERIFICATION OF BOTH BIDS WAS REQUESTED.

BY LETTER OF JUNE 28, 1955, THE ARLINGTON SALES AGENCY, INC. ADVISED OF AN ERROR IN ITS BID IN THAT SINCE ITS SUPPLIER OVERLOOKED THE REQUIREMENT THAT THE CUPS WITH LIDS SHALL BE PACKED IN TUBES OF FIFTY EACH, THE BID WAS BASED ON FURNISHING THE CUPS AND THE LIDS IN STANDARD PACKING IN SEPARATE CONTAINERS. WHILE A SUPPLIER'S ERROR IS NOT ORDINARILY AN ADEQUATE BASIS FOR WITHDRAWAL OF A BID, THE EXPLANATION FURNISHED MERELY CONFIRMED THE OBVIOUS INDICATIONS THAT THE BID OF THAT CORPORATION WAS NOT RESPONSIVE AS TO THE UNIT QUOTED ON, AND THAT IT DID NOT INTEND TO OFFER THE TUBES CONTAINING FIFTY CUPS AND LIDS AT $9.40 PER THOUSAND, THE BID COULD NOT PROPERLY BE ACCEPTED AS SUBMITTED AND, THEREFORE, IT MAY BE DISREGARDED.

BY LETTER OF JUNE 28, 1955, THE LILY-TULIP CUP CORPORATION ADVISED THAT AN ERROR WAS MADE IN COMPUTING ITS BID AND THAT, AS A RESULT, ITS PRICES ARE BASED ON 100 INSTEAD OF 50 CUPS AND LIDS PER TUBE AND, BY REASON OF THE MISTAKE, ITS BID ON EACH OF THE THREE ITEMS IS TWICE AS MUCH AS ITS USUAL AND INTENDED PRICE PER TUBE OF 50 CUPS AND LIDS. IN SUBSTANTIATION OF ITS ALLEGATION OF ERROR AND ITS INTENDED BID PRICE THE CORPORATION INVITES ATTENTION TO ITS QUOTATION OF PRICES JUST HALF AS HIGH WITHIN THE PAST YEAR ON THE BASIS OF WHICH IT WAS AWARDED A CONTRACT FOR IDENTICAL SUPPLIES. IT, THEREFORE, REQUESTED THAT ITS BID ON EACH ITEM BE REDUCED FIFTY PERCENT SO THAT THE PRICE WILL BE AS INTENDED, FOR TUBES CONTAINING, AS SPECIFIED, ONLY 50 CUPS AND LIDS EACH.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE CORPORATION MADE A BONA FIDE ERROR IN ITS BID AND THAT ITS INTENDED PRICES FOR TUBES OF FIFTY CUPS WITH LIDS WERE ONE-HALF OF THE AMOUNT QUOTED ON EACH ITEM, AS ALLEGED. ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID WAS ERRONEOUS AND SINCE SUCH BELIEF WAS CONFIRMED AND THE ERROR WAS EXPLAINED SATISFACTORILY PRIOR TO AWARD THE BID OF LILY- TULIP CORPORATION MAY BE CORRECTED SO AS TO PROVIDE FOR UNIT PRICES OF $0.497 ON ITEM NO. 1, $0.5185 ON ITEM NO. 2 AND $0.497 ON ITEM NO. 3.

IN THE EVENT OF AWARD TO LILY-TULIP CUP CORPORATION, A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.