B-125167, OCT. 20, 1955

B-125167, OCT. 20, 1955

TO SMART AND FINAL IRIS COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 14, 1955, REQUESTING A REVIEW OF SETTLEMENT DATED JUNE 16, 1955, WHICH DISALLOWED YOUR CLAIM FOR $568.76, UNDER CONTRACT NO. DA 34-031 AIV 767, 4-A-QM-332, O.I. 7521, IN VIEW OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID ON WHICH THE CONTRACT WAS AWARDED.

IN RESPONSE TO AN INVITATION FOR BIDS YOU AGREED TO FURNISH TO THE FORT SILL ARMY BASE 445,500 INDIVIDUAL BAGS OF TEA AT $0.00583 A BAG. APPEARS THAT AFTER THE ACCEPTANCE OF YOUR BID YOU ALLEGED AN ERROR THEREIN IN THAT YOU INTENDED TO QUOTE A PRICE ON THE BASIS OF FURNISHING 200 TEA BAGS TO THE POUND SINCE YOU WERE UNABLE TO PACK 150 BAGS TO THE POUND, AS CALLED FOR BY THE INVITATION. IT APPEARS FURTHER THAT SUBSEQUENT NEGOTIATIONS WITH RESPECT TO THE ALLEGED ERROR BETWEEN THE CONTRACTING OFFICE AND YOU RESULTED IN A SUPPLEMENTAL AGREEMENT TO THE CONTRACT WHICH PROVIDED FOR FURNISHING 200 BAGS OF TEA TO THE POUND BUT ALLOWED NO CHANGE IN THE TOTAL ORIGINAL POUNDS OF TEA REQUIRED. YOUR CLAIM OF $568.76, REPRESENTING THE ALLEGED LOSS TO YOU, APPEARS TO HAVE BEEN REDUCED TO $142.09, WHICH YOU STATE IS THE LOSS SUSTAINED BY YOU ONLY FOR THE OVERDELIVERY OF THE NUMBER OF INDIVIDUAL TEA BAGS FORCED UPON YOU.

YOUR REQUEST FOR REVIEW APPEARS TO BE BASED UPON THE PROBABILITY OF CONSTRUCTIVE NOTICE TO THE CONTRACTING OFFICER OF AN ERROR IN YOUR BID PRIOR TO AWARD FOR THE REASONS ADVANCED BY YOU.

NOTICE TO THE CONTRACTING OFFICER IS THE SOLE ISSUE UPON WHICH THE LEGAL CONCLUSIONS IN A MATTER SUCH AS WE HAVE HERE MUST BE PREDICATED. IN THIS CONNECTION, A REVIEW OF THE ABSTRACT OF BIDS REVEALS THE RECEIPT OF FIVE OTHER BIDS RANGING IN PRICE FROM $0.0006204 TO $0.00836, FOR EACH TEA BAG. HENCE, YOUR BID OF$0.00583 A BAG WAS NOT OUT OF LINE WITH THE OTHER BIDS RECEIVED ON AN INDIVIDUAL TEA BAG PRICE BASIS. MOREOVER, IT APPEARS THAT BIDS WERE CLEARLY REQUESTED ON AN INDIVIDUAL TEA BAG BASIS, THE NUMBER OF BAGS PER POUND BEING MERELY THE MEDIUM USED TO INDICATE THE SIZE OF THE INDIVIDUAL TEA BAGS DESIRED. IN VIEW OF THIS THE CONTRACTING OFFICER GENERALLY WOULD NOT BE EXPECTED TO FURTHER ANALYZE THE BIDS RECEIVED BEYOND COMPARING PRICES ON AN INDIVIDUAL UNIT BASIS. HOWEVER, IT MIGHT BE STATED FURTHER THAT EVEN IF THE CONTRACTING OFFICER HAD EXAMINED AND COMPARED ALL BIDS RECEIVED ON A PRICE PER POUND BASIS, THE ABSTRACT OF BIDS ALSO REVEALS IN THIS REGARD THAT WHEN CONSIDERING THE PRICES OF THE FIVE OTHER BIDS RECEIVED ON THE BASIS OF FURNISHING 100, 150 AND 200 INDIVIDUAL TEA BAGS A POUND YOUR BID OF $0.8745 A POUND REASONABLY COULD NOT BE CONSIDERED AS BEING OUT OF LINE WITH THE OTHER BIDS RECEIVED WHICH APPEAR TO HAVE RANGED FROM $0.76 TO $1.284 A POUND ON A PRICE PER POUND BASIS. INSOFAR AS CAN BE DETERMINED, THE BID OF THE EASTERN TEA CORPORATION REFERRED TO BY YOU WAS CONSIDERED BY THE CONTRACTING OFFICE AT THE UNIT PRICE OF $0.0076, A TEA BAG, PACKED 100 BAGS TO THE POUND--- WHICH APPARENTLY WAS UNACCEPTABLE--- INSTEAD OF 150 BAGS TO THE POUND AS STATED IN THE CORPORATION'S LETTER OF JULY 5, 1955.

IN VIEW OF THE FOREGOING IT MUST BE CONCLUDED THAT THERE WAS NOTHING ON THE FACE OF YOUR BID OR IN THE ATTENDANT CIRCUMSTANCES WHICH SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF AN ERROR IN YOUR BID. THE BID WAS ACCEPTED IN GOOD FAITH, THEREBY CONSTITUTING A