B-124727, SEP. 21, 1955

B-124727: Sep 21, 1955

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF JULY 18. OI-23- 037-55-3796 IS BASED. THE BIDS WERE OPENED ON FEBRUARY 10 AND THE SHERMAN COMPANY'S BID WAS ACCEPTED AS TO ITEMS 7. IT WAS STATED THAT. THAT THE COMPANY WAS ADVISED THAT A REVIEW OF THE ORIGINAL COPY OF ITS BID REVEALED THAT IT HAD DEFINITELY QUOTED A PRICE OF $0.2029 PER PACKAGE FOR ITEM 27. THE COMPANY CONFIRMED ITS VERBAL ALLEGATION OF ERROR AND STATED THAT A CLERICAL ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICE OF $0.3978 SHOWN ON THE RETAINED COPY OF ITS BID FOR ITEM 27 WAS INADVERTENTLY TRANSFERRED BY ITS SECRETARY TO THE BID SUBMITTED AS $0.2029. WAS ACTUALLY THE PRICE BID ON THE SAGE COVERED BY ITEM 26.

B-124727, SEP. 21, 1955

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF JULY 18, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR THE E. SHERMAN COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. OI-23- 037-55-3796 IS BASED.

BY INVITATION NO. AV-23-037-55-34, THE POST PURCHASING AND CONTRACTING OFFICE, FORT LEONARD WOOD, MISSOURI, REQUESTED BIDS FOR FURNISHING CERTAIN SUBSISTENCE ITEMS, 28 IN NUMBER, IN SPECIFIED QUANTITIES. IN RESPONSE, THE E. SHERMAN COMPANY SUBMITTED A BID DATED FEBRUARY 8, 1955, OFFERING TO FURNISH, AMONG OTHER ITEMS, 3,360 PACKAGES OF EVAPORATED PRUNES AT A PRICE OF $0.2029 PER TWO POUND PACKAGE, ITEM 27. THE SIX OTHER BIDDERS ON ITEM 27 SPECIFIED UNIT PRICES RANGING FROM $0.33 TO $0.539. THE BIDS WERE OPENED ON FEBRUARY 10 AND THE SHERMAN COMPANY'S BID WAS ACCEPTED AS TO ITEMS 7, 20, AND 27 ON FEBRUARY 18, 1955.

IN A STATEMENT DATED MAY 5, 1955, FROM THE CONTRACTING OFFICER, IN WHICH HE RECOMMENDED THAT THE UNIT PRICE OF ITEM 27 BE INCREASED TO THE AMOUNT OF THE NEXT LOWEST BID ON THAT ITEM, IT WAS STATED THAT, UPON RECEIPT OF NOTIFICATION OF AWARD AND A COPY OF THE CONTRACT, THE E. SHERMAN COMPANY ALLEGED BY TELEPHONE THAT IT DID NOT QUOTE A PRICE OF $0.2029 PER PACKAGE FOR ITEM 27 AS SHOWN IN THE CONTRACT, AND THAT THE COMPANY WAS ADVISED THAT A REVIEW OF THE ORIGINAL COPY OF ITS BID REVEALED THAT IT HAD DEFINITELY QUOTED A PRICE OF $0.2029 PER PACKAGE FOR ITEM 27.

IN A LETTER DATED APRIL 4, 1955, THE COMPANY CONFIRMED ITS VERBAL ALLEGATION OF ERROR AND STATED THAT A CLERICAL ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICE OF $0.3978 SHOWN ON THE RETAINED COPY OF ITS BID FOR ITEM 27 WAS INADVERTENTLY TRANSFERRED BY ITS SECRETARY TO THE BID SUBMITTED AS $0.2029, WHICH AMOUNT, IT STATED, WAS ACTUALLY THE PRICE BID ON THE SAGE COVERED BY ITEM 26. THE COMPANY REQUESTED THAT THE UNIT PRICE ON ITEM 27 BE INCREASED TO THE AMOUNT OF THE NEXT LOWEST BID ON THAT ITEM. WITH THE LETTER THE COMPANY SUBMITTED THE RETAINED COPY OF ITS BID WHICH SPECIFIES UNIT PRICES OF $0.3978 FOR ITEM 27, AND $0.2029 FOR ITEM 26, ON THE PRECEDING LINE.

THE BID OF THE E. SHERMAN COMPANY CONTAINED ON ITS FACE THE IDENTICAL PRICE OF $0.2029 BOTH FOR THE SAGE REQUIRED UNDER ITEM 26 AND FOR THE PRUNES REQUIRED UNDER ITEM 27. IT SEEMS EXTREMELY IMPROBABLE THAT THE COMPANY INTENDED TO QUOTE AN IDENTICAL PRICE FOR ITEMS 26 AND 27, SINCE ITEM 27 APPEARS TO BE A MORE EXPENSIVE ITEM THAN ITEM 26. IT IS NOTED THAT EACH OF THE OTHER BIDDERS WHO QUOTED ON BOTH ITEMS 26 AND 27 QUOTED A PRICE FOR ITEM 26 WHICH IS APPROXIMATELY TWICE THE PRICE QUOTED BY EACH OF THEM FOR ITEM 27. IT IS NOTED FURTHER THAT THE NEXT LOWEST BID ON ITEM 27 IS APPROXIMATELY SIXTY PERCENT HIGHER THAN THE COMPANY'S BID ON THAT ITEM. IN THE CIRCUMSTANCES, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID OF $0.2029 PER PACKAGE FOR ITEM 27, AND CONSEQUENTLY THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

ALTHOUGH THERE APPEARS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE A BONA FIDE ERROR ON ITEM 27 OF ITS BID, AS ALLEGED, IF THE BID ON THAT ITEM BE INCREASED TO THE AMOUNT ALLEGEDLY INTENDED, IT WILL NOT BE THE LOWEST BID ON THAT ITEM. ACCORDINGLY, AND SINCE IT IS REPORTED THAT DELIVERIES OF THE ITEM HAVE BEEN MADE, SUBJECT TO ACTION ON THE CLAIM FOR RELIEF, PAYMENT IS AUTHORIZED TO BE MADE UNDER ITEM 27 OF THE CONTRACT IN THE AMOUNT OF THE NEXT LOWEST CORRECT BID ON THAT ITEM.

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

THE CONTRACTING OFFICER'S STATEMENTS DATED MAY 5 AND JUNE 16, 1955, A COPY OF THE ABSTRACT OF BIDS, AND PHOTOSTATIC COPIES OF THE CONTRACTOR'S LETTER OF APRIL 4, 1955, AND RETAINED COPY OF ITS BID ARE BEING WITHHELD. THE OTHER PAPERS ARE RETURNED.