B-126957, FEB. 29, 1956

B-126957, FEB. 29, 1956

TO HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 9, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) RELATIVE TO AN ALLEGED ERROR ON ITEM NO. 1A OF AN UNDATED BID SUBMITTED BY THE OSTROM LUMBER COMPANY ON WHICH CONTRACT NO. DA35-026-ENG-26550 DATED DECEMBER 22, 1955, WAS BASED. YOU REQUEST A DECISION AS TO WHETHER, IN VIEW OF THE ALLEGED ERROR, THE CONTRACT PRICE ON ITEM NO. 1A MAY BE INCREASED $7 PER MBF.

IN THE INVITATION FOR BIDS AS ORIGINALLY ISSUED ITEM NO. 1A CALLED FOR GREEN ROUGH LUMBER. ADDENDUM NO. 3 TO THE INVITATION AMENDED THE SPECIFICATIONS BY REQUIRING THE LUMBER UNDER ITEM NO. 1A TO BE DRY IN LIEU OF "GREEN.' THE COMPANY'S BID WAS ACCOMPANIED BY A SIGNED COPY OF THIS ADDENDUM ON WHICH IT WAS WRITTEN THAT THE AMENDMENT PROVIDED FOR THEREIN WAS CONSIDERED IN DETERMINING ITS BID PRICE. UPON RECEIPT OF THE CONTRACT, HOWEVER, THE COMPANY ADVISED THAT ACTUALLY IT HAD NOT CONSIDERED HOW ADDENDUM NO. 3 EFFECTED A CHANGE IN THE SPECIFICATIONS FOR ITEM NO. 1A AND THAT CONSEQUENTLY ITS BID ON THAT ITEM INADVERTENTLY WAS BASED ON FURNISHING GREEN LUMBER AS ORIGINALLY REQUIRED UNDER THAT ITEM INSTEAD OF DRY LUMBER AS REQUIRED UNDER THE AMENDED SPECIFICATIONS. THEREFORE, IT REQUESTS THAT THE PRICE FOR THE LUMBER CALLED FOR UNDER ITEM NO. 1A BE INCREASED $7 PER FBM, OR FROM $75 TO $82PER MFBM.

THE COMPANY BID A FLAT PRICE OF $80 PER MFBM FOR DRY LUMBER OF A SIMILAR TYPE CALLED FOR UNDER ITEMS NOS. 1 THROUGH 4 AND $85 PER MFBM FOR DRY LUMBER ALSO OF SIMILAR TYPE CALLED FOR UNDER ITEMS NOS. 5 THROUGH 7 WITH THE KNOWLEDGE THAT ITEMS NOS. 1 THROUGH 7, A TOTAL OF 52,100 FBM, WOULD BE ,AWARDED AS A WHOLE.' IN VIEW THEREOF, AND SINCE THE ONLY OTHER BIDDER ON THESE ITEMS QUOTED PRICES OF $94 PER MFBM ON ITEM NO. 1A, $89 PER MFBM ON ITEMS 1 THROUGH 4 AND $115 PER MFBM ON ITEMS NOS. 5 THROUGH 7, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY THAT THE COMPANY HAD MADE AN ERROR IN ITS BID OF ONLY $75 PER MFBM FOR THE DRY LUMBER CALLED FOR UNDER ITEM 1A AND THAT, THEREFORE, A VERIFICATION OF THE COMPANY'S BID SHOULD HAVE BEEN REQUESTED BEFORE IT WAS ACCEPTED AS TO ITEM NO. 1A. SINCE THIS WAS NOT DONE, THE CONCLUSION IS WARRANTED THAT THE ACCEPTANCE AS TO ITEM NO. 1A DID NOT RESULT IN A VALID AND BINDING CONTRACT. THEREFORE, THE COMPANY SHOULD NOT BE REQUIRED TO FURNISH THE QUANTITY OF DRY LUMBER CALLED FOR UNDER ITEM NO. 1A AT A PRICE OF $75 PER MFBM. IN THE ALTERNATIVE THE COMPANY IS ENTITLED TO FAIR AND REASONABLE COMPENSATION FOR THE LUMBER DELIVERED AS REQUIRED UNDER ITEM NO. 1A.

ACCORDINGLY, SINCE THE CONTRACTOR REQUESTS A PRICE OF $82 PER MFBM FOR THE DRY LUMBER INVOLVED AND SINCE THE CONTRACTING OFFICER STATES THAT THE PRICE THUS REQUESTED FOR THE LUMBER REPRESENTS FAIR AND REASONABLE COMPENSATION THEREFOR, PAYMENT IS AUTHORIZED TO BE MADE TO THE OSTROM LUMBER COMPANY FOR THE QUANTITY OF LUMBER DELIVERED AND ACCEPTED UNDER ITEM NO. 1A AT A PRICE OF $82 PER MFBM, SUCH PRICE BEING LESS THAN THE NEXT LOWEST BID RECEIVED THEREFOR.