B-127092, FEB. 28, 1956

B-127092: Feb 28, 1956

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TO HONORABLE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 21. PROSPECTIVE BIDDERS WERE REQUESTED TO SPECIFY THEIR SHIPPING POINTS AND SHIPPING WEIGHTS. HE AND TECHNICAL PERSONNEL OF THE BUREAU OF MINES DISCOVERED THAT THE TOTAL GUARANTEED MAXIMUM SHIPPING WEIGHT SHOWN FOR ITEM 11 BY THE SUPERIOR MANUFACTURING COMPANY WAS UNUSUALLY LOW TO CONTAIN ADEQUATE STEEL FOR THE TANKS AS SPECIFIED. WE FIND THAT AN ERROR WAS MADE. "ITEM NO. 2 OF OUR ENCLOSED ESTIMATE SHEET IS AS FOLLOWS: "SHELL-8 PCS.-96 IN. - $629.79-$179.94 "IT SHOULD HAVE BEEN: "SHELL-8 PCS.-96 IN. - $5038.32-$1439.52 "THAT IS. "OUR TOTAL SHIPPING WEIGHT ON THIS VESSEL SHOULD HAVE BEEN 82. OUR SELLING PRICE SHOULD HAVE BEEN $18.

B-127092, FEB. 28, 1956

TO HONORABLE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 21, 1956, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO ERRORS THE SUPERIOR MANUFACTURING COMPANY ALLEGES IT MADE IN ITS BID OPENED ON JANUARY 11, 1956.

THE BUREAU OF MINES, HELIUM ACTIVITY, AMARILLO, TEXAS, BY INVITATION NO. 656-22, REQUESTED BIDS FOR FURNISHING, AMONG OTHER ITEMS, THREE CRUDE HELIUM STORAGE TANKS TO BE MANUFACTURED IN ACCORDANCE WITH ORDER NO. A- 98400312-D5.1, ITEM 11. THE INVITATION REQUIRES BIDDERS TO QUOTE PRICES F.O.B. ORIGIN AND F.O.B. DESTINATION (EXELL, TEXAS). PROSPECTIVE BIDDERS WERE REQUESTED TO SPECIFY THEIR SHIPPING POINTS AND SHIPPING WEIGHTS. RESPONSE, THE SUPERIOR MANUFACTURING COMPANY SUBMITTED A BID DATED JANUARY 10, 1956, OFFERING TO FURNISH THE HELIUM STORAGE TANKS UNDER ITEM 11 AT PRICES OF $7,579 EACH, F.O.B. ORIGIN, AND $7,629 EACH, F.O.B. DESTINATION. IN ITS BID THE COMPANY SPECIFIED THE SHIPPING WEIGHT OF EACH OF THE STORAGE TANKS AS 21,285 POUNDS.

IN A REPORT DATED JANUARY 31, 1956, THE CONTRACTING OFFICER STATES THAT, AT THE TIME OF OPENING OF THE BIDS, HE AND TECHNICAL PERSONNEL OF THE BUREAU OF MINES DISCOVERED THAT THE TOTAL GUARANTEED MAXIMUM SHIPPING WEIGHT SHOWN FOR ITEM 11 BY THE SUPERIOR MANUFACTURING COMPANY WAS UNUSUALLY LOW TO CONTAIN ADEQUATE STEEL FOR THE TANKS AS SPECIFIED; THAT ON JANUARY 14, 1956, A REPRESENTATIVE OF THE COMPANY ADVISED VERBALLY THAT THE COMPANY HAD MADE ERRORS ON ITEM 11 OF ITS BID; AND THAT ON JANUARY 16, 1956, THE COMPANY REQUESTED VERBALLY THAT IT BE PERMITTED TO WITHDRAW ITS BID ON THAT ITEM.

IN A NOTARIZED CONFIRMING LETTER DATED JANUARY 17, 1956, THE COMPANY STATED AS FOLLOWS:

"IN REVIEWING OUR ESTIMATES ON THE ABOVE SUBJECT JOB, WE FIND THAT AN ERROR WAS MADE.

"ITEM NO. 2 OF OUR ENCLOSED ESTIMATE SHEET IS AS FOLLOWS:

"SHELL-8 PCS.-96 IN. BY 378 IN. BY 7/8 IN. A-21-2-B--- 252 SQ. FT. - 8,997 POUNDS--- $629.79-$179.94

"IT SHOULD HAVE BEEN:

"SHELL-8 PCS.-96 IN. BY 378 IN. BY 7/8 IN. A-212-B--- 2016 SQ. FT. - 71,976 POUNDS--- $5038.32-$1439.52

"THAT IS, IN EXTENDING THE SHELL MATERIAL WE EXTENDED 1 PC. 96 IN. BY 378 IN. INSTEAD OF 8 PCS. 96 IN. BY 378 IN.

"OUR TOTAL SHIPPING WEIGHT ON THIS VESSEL SHOULD HAVE BEEN 82,264 POUNDS EACH INSTEAD OF 21,285 POUNDS EACH; AND OUR SELLING PRICE SHOULD HAVE BEEN $18,575.00 EACH F.O.B. JOB SITE EXELL, TEXAS INSTEAD OF $7,629.00 EACH F.O.B. JOB SITE, EXELL, TEXAS.

"THEREFORE, PLEASE ACCEPT THIS LETTER AS OUR WITHDRAWAL OF OUR QUOTATION ON ITEM NO. 11 CRUDE HELIUM STORAGE TANK.'

IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED THE ORIGINAL ESTIMATE SHEETS USED IN COMPUTING ITS BID PRICES FOR ITEM 11. THE NET SHIPPING WEIGHT OF ONE HELIUM STORAGE TANK IS INDICATED AS BEING 21,285 POUNDS.

THE RECORD INDICATES THAT FIVE OF THE SIX OTHER BIDDERS ON ITEM 11 SPECIFIED SHIPPING WEIGHTS OF 83,691, 84,937, 85,429, 88,400, AND 94,000 POUNDS AS THE WEIGHT OF ONE HELIUM STORAGE TANK AND THAT THE GOVERNMENT ESTIMATED THE WEIGHT OF ONE HELIUM STORAGE TANK AS BEING APPROXIMATELY 85,000 POUNDS. THUS, THE WEIGHT OF 21,285 POUNDS SPECIFIED BY THE SUPERIOR MANUFACTURING COMPANY FOR ONE HELIUM STORAGE TANK UNDER ITEM 11 IS OUT OF LINE WITH THE WEIGHTS SPECIFIED THEREFOR BY THE FIVE OTHER BIDDERS AND WITH THE GOVERNMENT'S ESTIMATED WEIGHT. ALSO, IT IS NOTED THAT THE PRICE OF $7,579 EACH F.O.B. ORIGIN QUOTED BY THE SUPERIOR MANUFACTURING COMPANY FOR ITEM 11 IS OUT OF LINE WITH THE F.O.B. ORIGIN PRICES QUOTED BY THE SIX OTHER BIDDERS, WHICH RANGED FROM $12,476 EACH TO $18,391 EACH FOR ITEM 11.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS NO ROOM FOR DOUBT THAT ERRORS AS TO THE PRICE AND SHIPPING WEIGHT OF ITEM 11 WERE MADE BY THE SUPERIOR MANUFACTURING COMPANY, AS ALLEGED. ACCORDINGLY, THE BID OF THE COMPANY AS TO ITEM 11 SHOULD BE DISREGARDED IN MAKING THE AWARD.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF JANUARY 31, 1956, ARE RETURNED.