B-126152, DEC. 9, 1955

B-126152: Dec 9, 1955

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TO SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 22. DA 03-006 AIV-1776 IS BASED. IT WAS STATED THAT ON JUNE 10. IMMEDIATELY AFTER THE BIDS WERE OPENED. ALLEGED THAT THE CORPORATION'S BID PRICE OF $0.38 PER QUART FOR ITEM 6 WAS ERRONEOUS IN THAT IT WAS BASED ON FURNISHING HALF AND HALF. THAT ALL PRICES SHOWN ON THE CORPORATION'S BID SHOULD HAVE BEEN THE SAME AS SHOWN ON ITS PRINTED WHOLESALE PRICE LIST. IT WAS STATED FURTHER THAT THE WHIPPING CREAM CALLED FOR UNDER ITEM 6 WAS PREVIOUSLY PROCURED FROM THE TERRY DAIRY PRODUCTS CO. ITEM 6 WAS AWARDED TO THE CORPORATION ON THE BASIS OF ITS ORIGINAL BID PRICE. THERE IS NO ROOM FOR DOUBT THAT THE TERRY DAIRY PRODUCTS CO.

B-126152, DEC. 9, 1955

TO SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 22, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR THE TERRY DAIRY PRODUCTS CO., INC., LITTLE ROCK, ARKANSAS, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA 03-006 AIV-1776 IS BASED.

BY INVITATION NO. QM 03-006-55-72, THE POST PURCHASING AND CONTRACTING OFFICE, CAMP CHAFFEE, ARKANSAS, REQUESTED BIDS--- TO BE OPENED JUNE 10, 1955--- FOR FURNISHING CERTAIN ITEMS OF DAIRY PRODUCTS DURING THE PERIOD BEGINNING JULY 1, 1955, AND ENDING JUNE 30, 1956, ITEMS 1 TO 18, INCLUSIVE. IN RESPONSE, THE TERRY DAIRY PRODUCTS CO., INC. SUBMITTED A BID DATED JUNE 10, 1955, IN PART AS FOLLOWS:

CHART

"ITEM UNIT

NO. SUPPLIES OR SERVICES QUANTITY UNIT UNIT PRICE AMOUNT

CREAM AND HALF AND HALF, FRESH

IN ACCORDANCE WITH FEDERAL

SPECIFICATION C-C-671B,

1 JUNE 1951

6 TYPE II--- PASTEURIZED WHIPPING

CREAM (30.0 PERCENT MILK FAT)

NO. 2 IN FIBER CONTAINERS 1,675 QTS. .38 636.50

7 TYPE III--- PASTEURIZED

HOMOGENIZED CREAM (18.0

PERCENT MILK FAT) IN FIBER

CONTAINERS--- NO. 2 1,800 QUTS. .52 936.00 INCHE

IN ITS BID THE CORPORATION OFFERED A PROMPT PAYMENT DISCOUNT OF 24 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS. THE ONLY OTHER BID ON ITEM 6 SPECIFIED A PRICE OF $0.90 PER QUART LESS A PROMPT PAYMENT DISCOUNT OF 1 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS.

IN A REPORT DATED SEPTEMBER 21, 1955, FROM THE CONTRACTING OFFICER, IT WAS STATED THAT ON JUNE 10, 1955, IMMEDIATELY AFTER THE BIDS WERE OPENED, A REPRESENTATIVE OF THE TERRY DAIRY PRODUCTS O., INC. ALLEGED THAT THE CORPORATION'S BID PRICE OF $0.38 PER QUART FOR ITEM 6 WAS ERRONEOUS IN THAT IT WAS BASED ON FURNISHING HALF AND HALF, AND NOT PASTEURIZED WHIPPING CREAM; AND THAT ALL PRICES SHOWN ON THE CORPORATION'S BID SHOULD HAVE BEEN THE SAME AS SHOWN ON ITS PRINTED WHOLESALE PRICE LIST. IT WAS STATED FURTHER THAT THE WHIPPING CREAM CALLED FOR UNDER ITEM 6 WAS PREVIOUSLY PROCURED FROM THE TERRY DAIRY PRODUCTS CO., INC. DURING THE LAST PART OF THE FISCAL YEAR 1955 AT A PRICE OF $0.75 PER QUART LESS A PROMPT PAYMENT DISCOUNT OF 2 PERCENT FOR PAYMENT WITHIN 10 CALENDAR DAYS; AND THAT PURSUANT TO THE INSTRUCTIONS OF THE PURCHASES BRANCH, DEPUTY CHIEF OF STAFF OF LOGISTICS, WASHINGTON, D.C., ITEM 6 WAS AWARDED TO THE CORPORATION ON THE BASIS OF ITS ORIGINAL BID PRICE, SUBJECT TO CORRECTION, IF AUTHORIZED, BY THE GENERAL ACCOUNTING OFFICE.

IN A LETTER DATED JUNE 21, 1955, IN WHICH IT CONFIRMED ITS VERBAL ALLEGATION OF ERROR, THE CORPORATION REQUESTED THAT THE PRICE OF THE WHIPPING CREAM COVERED BY ITEM 6 BE INCREASED FROM $0.38 TO $0.90 PER QUART. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED A COPY OF ITS PRINTED WHOLESALE PRICE LIST WHICH SPECIFIED FOR XX CREAM (PASTEURIZED WHIPPING CREAM) A PRICE OF $0.90 PER QUART, AND FOR HALF AND HALF IN QUART CONTAINERS A PRICE OF $0.38--- THE SAME PRICE AS QUOTED BY THE CORPORATION IN ITS BID FOR THE PASTEURIZED WHIPPING CREAM REQUIRED UNDER ITEM 6.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS NO ROOM FOR DOUBT THAT THE TERRY DAIRY PRODUCTS CO., INC, MADE AN ERROR IN ITS BID, AS ALLEGED, AND IT IS APPARENT THAT THE INTENDED BID FOR ITEM 6 WAS $0.90 PER QUART. ACCORDINGLY, CONTRACT NO. DA 03-006-AIV-1776--- AWARDED BECAUSE TIME DID NOT PERMIT THE SUBMISSION OF THE MATTER OF THE ALLEGED ERROR TO OUR OFFICE PRIOR TO AWARD--- MAY BE AMENDED TO INCREASE THE UNIT PRICE FOR ITEM 6 TO $0.90, WHICH AMOUNT, WHEN REDUCED BY THE AMOUNT OF THE PROMPT PAYMENT DISCOUNT OFFERED BY THE CORPORATION IN ITS BID, WOULD NOT ALTER THE COMPANY'S POSITION AS LOW BIDDER, AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS FOR ANY WHIPPING CREAM DELIVERED OR TO BE DELIVERED BY THE CORPORATION UNDER ITEM 6 OF THE CONTRACT.

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

THE CONTRACTING OFFICER'S STATEMENT OF SEPTEMBER 21, 1955, THE CORPORATION'S PRINTED WHOLESALE PRICE LIST, AND THE ABSTRACT OF THE BIDS SUBMITTED IN RESPONSE TO INVITATION NO. QM 03-006-55-72 ARE BEING RETAINED. THE OTHER PAPERS ARE RETURNED.