B-125434, SEP. 30, 1955

B-125434: Sep 30, 1955

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6. WAS BASED. BIDS WERE REQUESTED FOR FURNISHING. THE CORPORATION'S BID WAS $0.0166 PER POUND. IN THAT AN INTENDED TRUCKING CHARGE OF $0.66 PER 100 POUNDS WAS ENTIRELY OMITTED THROUGH INADVERTENCE. SHOWING THAT ONLY $0.01 PER 100 POUNDS (BASED ON THE COMPUTED TAX ON $0.66 PER HUNDRED POUNDS TRUCKING CHARGE) WAS ADDED TO THE PRICE. REASONABLY ESTABLISHES THAT THE ERROR WAS MADE. ITS BID WOULD HAVE BEEN. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS RECEIVED ON ITEM NO. 2 WERE $0.0224. THE CONTRACTING OFFICER INDICATES THAT HE NOTICED THAT THE LOW BID WAS OUT OF LINE BUT CONCLUDED IT WAS NOT TOO FAR OUT OF LINE IN VIEW OF THE LARGE TOTAL QUANTITY PROPOSED TO BE PURCHASED.

B-125434, SEP. 30, 1955

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 6, 1955, WITH ENCLOSURES, RELATIVE TO AN ALLEGED ERROR IN A BID DATED APRIL 19, 1955, SUBMITTED BY THE SOLVAY PROCESS DIVISION, ALLIED CHEMICAL AND DYE CORPORATION, ON WHICH CONTRACT NO. DA-28-013-AI-1448 DATED APRIL 22, 1955, WAS BASED.

BY INVITATION NO. AI-28-013-55-69, BIDS WERE REQUESTED FOR FURNISHING, F.O.B. DESTINATION, FORT DIX, NEW JERSEY, ITEM NO. 2, COVERING 115,000 POUNDS SODA ASH IN 100 POUND BAGS--- ONE-FIFTH OF THE QUANTITY, 23,000 POUNDS, TO BE DELIVERED ON OR ABOUT THE FIRST DAY OF MAY, JUNE, JULY, AUGUST AND SEPTEMBER, 1955. THE CORPORATION'S BID WAS $0.0166 PER POUND, F.O.B. DESTINATION. UPON RECEIPT OF NOTICE OF AWARD, THE CORPORATION, BY LETTER OF MAY 3, 1955--- CONFIRMING ADVICE BY TELEPHONE CONVERSATION OF APRIL 27, 1955--- EXPLAINED THAT AN ERROR HAD BEEN MADE IN CALCULATING ITS UNIT BID PRICE ON THE BASIS OF THE 23,000 POUNDS, THE QUANTITY CALLED FOR IN EACH OF THE FIVE DELIVERIES, IN THAT AN INTENDED TRUCKING CHARGE OF $0.66 PER 100 POUNDS WAS ENTIRELY OMITTED THROUGH INADVERTENCE. THE CORPORATION'S ORIGINAL WORKSHEET, SHOWING THAT ONLY $0.01 PER 100 POUNDS (BASED ON THE COMPUTED TAX ON $0.66 PER HUNDRED POUNDS TRUCKING CHARGE) WAS ADDED TO THE PRICE, F.O.B. FACTORY, OF $1.65 PER 100 POUNDS, REASONABLY ESTABLISHES THAT THE ERROR WAS MADE, AS ALLEGED, BY FAILURE TO INCLUDE THE INTENDED BASE TRUCKING CHARGE OF $0.66 PER HUNDRED POUNDS, AND THAT, IF NOT FOR THE ERROR, ITS BID WOULD HAVE BEEN, AS ALLEGEDLY INTENDED, $2.32 PER 100 POUNDS, OR $0.0232 PER POUND.

THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS RECEIVED ON ITEM NO. 2 WERE $0.0224, $0.0231 AND $0.0257 PER POUND, F.O.B. FORT DIX, NEW JERSEY. IN THE FIRST PARAGRAPH OF HIS REPORT DATED JUNE 1, 1955, THE CONTRACTING OFFICER INDICATES THAT HE NOTICED THAT THE LOW BID WAS OUT OF LINE BUT CONCLUDED IT WAS NOT TOO FAR OUT OF LINE IN VIEW OF THE LARGE TOTAL QUANTITY PROPOSED TO BE PURCHASED, AND INASMUCH AS THE INITIAL SHIPMENT WAS DUE MAY 1, 1955, THE CONTRACTOR WAS NOTIFIED OF AWARD BY TELEPHONE ON APRIL 22, 1955. SUBSEQUENTLY IN THE SAME REPORT, HE STATES, IN PERTINENT PART, AS FOLLOWS:

"UPON INQUIRING FROM REPRESENTATIVES OF SOME OF THE OTHER BIDDERS IT WAS LEARNED THAT SINCE THE ORDER CONSISTS OF SEVERAL DELIVERIES, SPACED A MONTH APART, THE UNIT COST IS BASED ON THE INDIVIDUAL DELIVERY QUANTITIES RATHER THAN ON THE ENTIRE QUANTITY OF THE ORDER. FURTHER, SINCE THE ITEM IS HIGHLY COMPETITIVE THE UNIT PRICE SUBMITTED BY THE LOW BIDDER IS CONSIDERABLY OUT OF LINE WHEN COMPARING THE DIFFERENCE BETWEEN THE LOW BID AND THE NEXT LOW BID WITH THE DIFFERENCE BETWEEN THE LATTER BID AND THE HIGHEST BID.'

FURTHERMORE, IT IS ADMINISTRATIVELY REPORTED IN THE 4TH INDORSEMENT DATED JULY 28, 1955, BY THE COMMANDING GENERAL, FORT DIX, NEW JERSEY, THAT A REVIEW OF PAST COMPETITIVE PURCHASES OF THE IDENTICAL PRODUCT DISCLOSES THAT THE PRICE PREVIOUSLY PAID F.O.B. DESTINATION AVERAGED $0.0223 PER POUND IN LOTS OF 23,000 POUNDS, OR OVER (CARLOAD LOTS) AND THAT, THEREFORE, IT IS CONSIDERED THAT THE REQUESTED ADJUSTMENT IN PRICE IS REASONABLE.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD THERE IS NO DOUBT THAT THE CONTRACTOR MADE A BONA FIDE ERROR IN ITS BID ON ITEM NO. 2 AND THAT ITS INTENDED BID PRICE WAS $0.0232 PER POUND, AS SATISFACTORILY EXPLAINED BY IT WITHIN A REASONABLE TIME AFTER RECEIPT OF THE INFORMAL NOTICE OF AWARD.

CONSIDERING THE CHARACTER OF THE CONTRACT MATERIAL, THE HIGHLY COMPETITIVE MARKET, AND THE CONTENTS OF THE STATEMENT OF THE CONTRACTING OFFICER, IT APPEARS THAT THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE OTHER BIDS ON ITEM NO. 2, WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID--- PARTICULARLY IN VIEW OF THE INFORMATION AVAILABLE TO HIM IN THE PURCHASING OFFICE PERTAINING TO THE AVERAGE PRICE PAID FOR THE IDENTICAL PRODUCT IN LIKE QUANTITIES. CONSEQUENTLY, THE CONCLUSION IS WARRANTED THAT THE CONTRACTOR SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO VERIFY ITS BID PRICE PRIOR TO AWARD.

ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE TO THE CONTRACTOR FOR THE SODA ASH DELIVERED UNDER THE CONTRACT, IN AN AMOUNT IN ADDITION TO THE CONTRACT PRICE, EQUAL TO THE DIFFERENCE BETWEEN $0.0166 PER POUND, SPECIFIED IN THE CONTRACT, AND THE NEXT LOWEST BID PRICE OF $0.0224 PER POUND, AS RECOMMENDED BY THE CONTRACTING OFFICER.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.