B-127312, APR. 19, 1956

B-127312: Apr 19, 1956

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TO ADIRONDACK RADIO SUPPLY: REFERENCE IS MADE TO A LETTER OF FEBRUARY 22. WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $251.64. SINCE YOUR BID WAS CONSIDERABLY LOWER THAN THE OTHER TWO BIDS OF $2.38 AND $2.61 A ROLL. WHICH WERE RECEIVED FOR THE TAPE. HINKLE AFFIRMED THE PRICE OF $1.23 A ROLL FOR THE TAPE AS CORRECT AND SUBSEQUENTLY YOUR QUOTATION WAS ACCEPTED BY THE AIR FORCE BASE BY THE ISSUANCE OF PURCHASE ORDER NO. (30-635/55 3196 ON MARCH 8. UPON RECEIPT OF THE PURCHASE ORDER YOU DISCOVERED THAT THE TAPE WAS TO BE FURNISHED IN 60-YARD ROLLS INSTEAD OF THE 60-FOOT ROLLS UPON WHICH YOU ALLEGED YOUR QUOTATION WAS BASED. AS A RESULT OF THE ERROR YOU CLAIM THE AMOUNT OF $251.64 WHICH IS STATED TO REPRESENT THE DIFFERENCE BETWEEN YOUR QUOTATION AND THE ACTUAL COST OF FURNISHING 200 ROLLS OF THE TYPE OF INSULATION TAPE REQUIRED.

B-127312, APR. 19, 1956

TO ADIRONDACK RADIO SUPPLY:

REFERENCE IS MADE TO A LETTER OF FEBRUARY 22, 1956, IN YOUR BEHALF FROM THE ABOVE ATTORNEYS, REQUESTING REVIEW OF OUR SETTLEMENT DATED FEBRUARY 9, 1956, WHEREIN THERE WAS DISALLOWED YOUR CLAIM FOR $251.64, UNDER PURCHASE ORDER NO. (30-635/55-3196, DATED MARCH 8, 1955.

IT APPEARS THAT IN RESPONSE TO A REQUEST FOR BIDS OF THE GRIFFISS AIR FORCE BASE, ROME, NEW YORK, YOU QUOTED, BY TELEPHONE, A PRICE OF $1.23 A ROLL FOR FURNISHING 200 ROLLS--- 60 YARDS TO THE ROLL--- OF INSULATION TAPE, OR A TOTAL PRICE OF $246. SINCE YOUR BID WAS CONSIDERABLY LOWER THAN THE OTHER TWO BIDS OF $2.38 AND $2.61 A ROLL, WHICH WERE RECEIVED FOR THE TAPE, THE CONTRACTING OFFICER CALLED YOUR MR. WARD J. HINKLE ON FEBRUARY 11, 1955, AND REQUESTED A VERIFICATION OF THE QUOTATION. MR. HINKLE AFFIRMED THE PRICE OF $1.23 A ROLL FOR THE TAPE AS CORRECT AND SUBSEQUENTLY YOUR QUOTATION WAS ACCEPTED BY THE AIR FORCE BASE BY THE ISSUANCE OF PURCHASE ORDER NO. (30-635/55 3196 ON MARCH 8, 1955. UPON RECEIPT OF THE PURCHASE ORDER YOU DISCOVERED THAT THE TAPE WAS TO BE FURNISHED IN 60-YARD ROLLS INSTEAD OF THE 60-FOOT ROLLS UPON WHICH YOU ALLEGED YOUR QUOTATION WAS BASED. AS A RESULT OF THE ERROR YOU CLAIM THE AMOUNT OF $251.64 WHICH IS STATED TO REPRESENT THE DIFFERENCE BETWEEN YOUR QUOTATION AND THE ACTUAL COST OF FURNISHING 200 ROLLS OF THE TYPE OF INSULATION TAPE REQUIRED, PLUS 10 PERCENT PROFIT.

IT APPEARS THAT THE ATTORNEYS' REQUEST FOR REVIEW IS BASED PRIMARILY ON THE PREMISE THAT THE GOVERNMENT CONTRACTING OFFICER WAS AWARE OF AN ERROR IN YOUR BID, AS INDICATED BY THE REQUEST FOR VERIFICATION, BUT THAT NOTWITHSTANDING THIS THE CONTRACTING OFFICER NEITHER GAVE ANY REASON FOR HIS REQUEST NOR MADE ANY ATTEMPT TO POINT OUT THE OBVIOUS ERROR OR THE NATURE THEREOF.

THE CONTRACTING OFFICER ADMITS THAT PRIOR TO THE ISSUANCE OF THE PURCHASE ORDER HE DID SUSPECT THE PROBABILITY OF AN ERROR IN YOUR BID. HOWEVER, THE ONLY OBLIGATION PROPERLY CHARGEABLE TO THE CONTRACTING OFFICER AT THAT TIME WAS TO AFFORD YOU THE OPPORTUNITY TO VERIFY THE BID, AND THE OBLIGATION WAS FULLY SATISFIED WHEN THE CONTRACTING OFFICER CALLED MR. HINKLE AND REQUESTED A VERIFICATION. THE CONTRACTING OFFICER DID NOT OWE THE FURTHER OBLIGATION, AS CONTENDED BY THE ATTORNEYS, OF SPECIFICALLY CALLING TO MR. HINKLE'S ATTENTION THE REASON FOR HIS CALL OR THAT HE BELIEVED AN ERROR HAD BEEN MADE IN THE BID. WHILE IT DOES NOT APPEAR THAT IT WAS NECESSARY TO STATE SUCH REASON, NEVERTHELESS YOU ADMIT IN THE SECOND PARAGRAPH OF YOUR LETTER DATED APRIL 18, 1955, THAT WHEN YOU CONTACTED MR. ROSEN OF THE GRIFFISS AIR FORCE DEPOT YOU WERE ADVISED THAT HE AGAIN HAD CHECKED WITH YOU AND FOUND THAT YOU HAD VERIFIED YOUR PREVIOUS QUOTATION THAT THEY WERE 60-YARD ROLLS. THE VERY FACT, WITHOUT MORE, THAT A REQUEST WAS MADE FOR VERIFICATION OF THE BID SHOULD HAVE IMMEDIATELY PLACED ANY REASONABLY PRUDENT BIDDER ON NOTICE OF THE PROBABILITY THAT AN IRREGULARITY IN THE BID WAS SUSPECTED AND, IF YOU ELECTED TO AFFIRM THE BID WITHOUT A FURTHER EXAMINATION THEREOF, IT MUST BE CONCLUDED THAT YOU ASSUMED ANY RISK THAT MIGHT HAVE RESULTED FROM AN ERRONEOUS OR ILL-ADVISED BID. WHEN THE CORRECTNESS OF THE BID WAS AFFIRMED THE CONTRACTING OFFICER THEN HAD EVERY RIGHT TO CONSIDER THE BID FURTHER FOR ACCEPTANCE NOTWITHSTANDING THAT THE PRICE REMAINED CONSIDERABLY LOWER THAN THE OTHER TWO BIDS RECEIVED. THERE ARE MANY REASONS WHY PARTICULAR MANUFACTURERS OR DEALERS ARE MOTIVATED TO, AND DO, QUOTE PRICES CONSIDERABLY LOWER THAN THEIR COMPETITORS AND SUBSTANTIAL VARIATIONS IN BID PRICES ARE EXPERIENCED REGULARLY BY GOVERNMENT CONTRACTING OFFICERS. UNDER THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE BID WAS ACCEPTED IN GOOD FAITH THEREBY CONSUMMATING A VALID AND BINDING OBLIGATION WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.