B-125467, DEC. 5, 1955

B-125467, DEC. 5, 1955

TO THE HONORABLE EDMUND F. MANSURE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 17, 1955, WITH ENCLOSURES, FURNISHING THE REPORT REQUESTED IN OUR LETTER OF SEPTEMBER 21, 1955, RELATIVE TO AN ERROR ALLEGED BY AIR PUMPS, LTD. TO HAVE BEEN MADE IN ITS UNIT PRICE BID OF $3.674 FOR ITEM NO. 4, CODE 7905, ON WHICH CONTRACT NO. GS-03P-47-ICA, DATED AUGUST 3, 1955, WAS BASED.

THE RECORD SHOWS THAT UPON RECEIPT OF NOTICE OF AWARD AND THE CONTRACT THE CONTRACTOR ADVISED BY LETTER OF AUGUST 15, 1955, THAT IT HAD DISCOVERED A MATHEMATICAL ERROR IN "CONVERTING STERLING INTO DOLLAR CURRENCY; " THAT AS A RESULT OF THE ERROR, AN ERRONEOUS BID PRICE OF $3,674 WAS ARRIVED AT INSTEAD OF THE CORRECT INTENDED UNIT BID PRICE OF $4,674; AND THAT, BY REASON THEREOF, THE CONTRACT COULD NOT BE ACCEPTED. REPLYING THERETO, YOUR OFFICE ADVISED BY TELEGRAM OF AUGUST 23, 1955, THAT THE CONTRACT WAS BEING RETURNED AND THAT ANY FURTHER REFUSAL TO ACCEPT IT WOULD RESULT IN TERMINATION BY THE GOVERNMENT AND THE PURCHASE OF THE EQUIPMENT ELSEWHERE AGAINST ITS ACCOUNT.

IN A LETTER DATED SEPTEMBER 3, 1955, TO THE CONTRACTING OFFICER, THE CONTRACTOR'S WASHINGTON REPRESENTATIVE ADVISED THAT THE CONTRACTOR'S REQUEST FOR RELIEF WOULD BE SUBMITTED DIRECTLY TO THE GENERAL ACCOUNTING OFFICE AND THAT YOUR OFFICE WOULD BE FURNISHED A COPY THEREOF. THERE WAS RECEIVED HERE A LETTER DATED SEPTEMBER 6, 1955, EXPLAINING THE ERROR, WHICH APPEARS TO BE ESTABLISHED BY A PHOTOSTATIC COPY OF ITS ORIGINAL WORKSHEET WHICH CLEARLY DISCLOSES THAT A MATHEMATICAL ERROR WAS MADE, AND THAT ITS INTENDED PRICE WAS $4,674 EACH. ALSO, IT FORWARDED A PHOTOSTATIC COPY OF A CONTRACT DATED MARCH 25, 1955, BASED ON ITS BID OF $4,715 EACH FOR A SIMILAR MACHINE. ON THE BASIS OF THE SUBMISSION, IT REQUESTED THIS OFFICE TO AUTHORIZE AN INCREASE OF $1,000 IN THE CONTRACT PRICE FOR EACH OF THE TWO MACHINES INVOLVED.

THE ABSTRACT OF BIDS SHOWS THAT THE CONTRACTOR'S BID WAS APPROXIMATELY $2,100 LOWER THAN THE NEXT LOW BID, AND GREATLY OUT OF LINE WITH THE REMAINING BIDS WHICH RANGED FROM $6,129 TO $15,784. THERE IS, THEREFORE, A REASONABLE BASIS FOR THE VIEW THAT THE CONTRACTING OFFICER SHOULD HAVE TAKEN NOTICE OF THE PROBABILITY THAT THE CONTRACTOR HAD MADE AN ERROR AND AFFORDED IT AN OPPORTUNITY TO VERIFY THE BID PRICE BEFORE AWARD.

ACCORDINGLY, AND SINCE THERE IS LITTLE DOUBT, IF ANY, THAT THE CONTRACTOR MADE THE ERROR, AS ALLEGED, THE CONTRACT MAY BE AMENDED SO AS TO PROVIDE FOR A PRICE OF $4,674 EACH, OR $9,348 FOR THE TWO MACHINES CALLED FOR UNDER ITEM NO. 4 OF THE INVITATION, SUCH PRICE BEING LESS THAN ANY OTHER BID RECEIVED ON THE ITEM.

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