B-124942, AUG. 12, 1955

B-124942: Aug 12, 1955

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TO SECRETARY OF THE NAVY: REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1. MAY BE CANCELLED BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID AS SUBMITTED. CARRIER AT NINE" AS WAS INTENDED AND AS IT APPEARS ON THE WORKSHEET FURNISHED BY THE BIDDER. THE ASSERTION THAT THE MISTAKE WAS MADE IN TRANSPOSING THE FIGURES FROM THE WORKSHEET TO THE BID IS CONFIRMED BY THE FACT THAT THE FIGURE OF $3.08 PER TON FREIGHT RATE IS INCLUDED BOTH ON THE BID AND ON THE WORKSHEET. WAS FAR LOWER THAN ANY OF THE OTHER BIDS RECEIVED PURSUANT TO THE SUBJECT INVITATION. THAT IT WAS SUBSTANTIALLY LOWER THAN PRICES ACTUALLY PAID DURING THE CURRENT PROCUREMENT SEASON. WAS LIKEWISE MATERIALLY LOWER THAN CURRENT MARKET PRICES AS QUOTED IN A TRADE JOURNAL.

B-124942, AUG. 12, 1955

TO SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER CONTRACT NO. N424S-1710 AWARDED TO A. L. WATSON AND COMPANY, INC., FOR 4,000 TONS OF ANTHRACITE COAL, BUCKWHEAT NO. 2, AT $5.25 PER TON PURSUANT TO ITS BID ON THAT PORTION OF ITEM NO. 7 OF INVITATION NO. IFB-424-1225-55, MAY BE CANCELLED BY REASON OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID AS SUBMITTED.

THE DOCUMENTS TRANSMITTED WITH YOUR LETTER INDICATE THAT THE BID OF A. L. WATSON AND COMPANY, INC., FOR 4,000 TONS OF BUCKWHEAT NO. 2 COAL UNDER ITEM NO. 7 OF THIS INVITATION OFFERED THE COAL FOR $5.25 PER TON DELIVERED F.O.B. CARRIER AT DESTINATION. THE BID SHOWED A FREIGHT RATE OF $3.08 PER TON WHICH ESTABLISHED A PRICE OF ONLY $2.17 PER TON FOR THE COAL AT THE MINE.

PRIOR TO RECEIPT OF FORMAL NOTICE OF AWARD, THE BIDDER NOTIFIED THE NAVY PURCHASING DEPARTMENT BY LETTER DATED JULY 18, 1955, THAT A MISTAKE HAD BEEN MADE IN ITS BID AS SUBMITTED CONSISTING OF PLACING THE FIGURE OF $5.25 IN THE SPACE FOLLOWING THE WORDS "UNIT PRICE BID PER NET TON DELIVERED F.O.B. CARRIER AT DESTINATION WITH ALL TRANSPORTATION CHARGES PAID BY CONTRACTOR" RATHER THAN IN THE SPACE FOLLOWING THE WORDS "UNIT PRICE BID PER NET TON DELIVERED F.O.B. CARRIER AT NINE" AS WAS INTENDED AND AS IT APPEARS ON THE WORKSHEET FURNISHED BY THE BIDDER. THE ASSERTION THAT THE MISTAKE WAS MADE IN TRANSPOSING THE FIGURES FROM THE WORKSHEET TO THE BID IS CONFIRMED BY THE FACT THAT THE FIGURE OF $3.08 PER TON FREIGHT RATE IS INCLUDED BOTH ON THE BID AND ON THE WORKSHEET.

THE RECORD FURTHER SHOWS THAT THE BID OF A. L. WATSON AND COMPANY, INC., WAS FAR LOWER THAN ANY OF THE OTHER BIDS RECEIVED PURSUANT TO THE SUBJECT INVITATION, THAT IT WAS SUBSTANTIALLY LOWER THAN PRICES ACTUALLY PAID DURING THE CURRENT PROCUREMENT SEASON, AND WAS LIKEWISE MATERIALLY LOWER THAN CURRENT MARKET PRICES AS QUOTED IN A TRADE JOURNAL.

IN VIEW OF THE FACTS AS HEREINBEFORE STATED, THERE CAN BE NO DOUBT THAT A BONA FIDE MISTAKE WAS MADE BY A. L. WATSON AND COMPANY, INC., IN ITS BID AS SUBMITTED AND THAT THE ERROR IN PRICE WAS OF SUCH A SUBSTANTIAL NATURE AS COMPARED WITH OTHER BIDS AND WITH CURRENT MARKET PRICES THAT THE PROCUREMENT PERSONNEL INVOLVED SHOULD HAVE REQUESTED CONFIRMATION BEFORE MAKING THE AWARD.

ACCORDINGLY, CONTRACT NO. N424S-1710 MAY BE CANCELLED WITHOUT LIABILITY TO A. L. WATSON AND COMPANY, INC., AS ADMINISTRATIVELY RECOMMENDED.