B-127586, AUG. 2, 1956

B-127586: Aug 2, 1956

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JULY 23. NOM-68586 WAS AWARDED. BIDDERS WERE REQUESTED TO QUOTE F.O.B. THE BID OF THE FIRESTONE TIRE AND RUBBER COMPANY WAS NOT FORWARDED HERE BUT IT APPEARS FROM THE ABSTRACT OF BIDS THAT THE COMPANY OFFERED TO FURNISH THE TANKS AT A PRICE OF $503.85 EACH. 396.70 WAS ISSUED TO THE FIRESTONE TIRE AND RUBBER COMPANY. WAS REQUIRED AND THAT IT FAILED TO INCLUDE THE COST OF THE GROUND CLOTH IN ITS BID PRICE FOR THE TANKS. THAT THE COMPANY'S ENGINEERS AND COST ACCOUNTANTS ASSUMED THAT "TANK BOTTOM" AND "GROUND CLOTH" WERE ONE AND THE SAME THING BECAUSE ON CORPS OF ENGINEERS DRAWING D-10708-1. ITEM 12 OF THE BILL OF MATERIALS IS REFERRED TO AS "GROUND CLOTH" AND ITEM 12 OF THE PLAN VIEW IS CALLED "TANK BOTTOM.'.

B-127586, AUG. 2, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JULY 23, 1956, WITH ENCLOSURES, FROM THE QUARTERMASTER GENERAL OF THE U.S. MARINE CORPS, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR THE FIRESTONE TIRE AND RUBBER COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. NOM-68586 WAS AWARDED.

BY INVITATION NO. 135, THE COMMANDANT OF THE U.S. MARINE CORPS, WASHINGTON, D.C., REQUESTED BIDS--- TO BE OPENED FEBRUARY 7, 1956--- FOR FURNISHING TANKS, FABRIC, COLLAPSIBLE, WATER, NYLON, GR'S COATED, 3,000- GALLON CAPACITY, IN ACCORDANCE WITH PURCHASE DESCRIPTION DATED DECEMBER 15, 1955, AND CERTAIN SPECIFICATIONS AND DRAWINGS. BIDDERS WERE REQUESTED TO QUOTE F.O.B. ORIGIN AND F.O.B. DESTINATION PRICES ON THE TANKS. THE BID OF THE FIRESTONE TIRE AND RUBBER COMPANY WAS NOT FORWARDED HERE BUT IT APPEARS FROM THE ABSTRACT OF BIDS THAT THE COMPANY OFFERED TO FURNISH THE TANKS AT A PRICE OF $503.85 EACH, F.O.B. ORIGIN, MAGNOLIA, ARKANSAS. THE FOUR OTHER BIDDERS QUOTING ON AN F.O.B. ORIGIN BASIS SPECIFIED PRICES RANGING FROM $604 EACH TO $1,850 EACH. ON FEBRUARY 14, 1956, A NOTICE OF AWARD IN THE AMOUNT OF $575,396.70 WAS ISSUED TO THE FIRESTONE TIRE AND RUBBER COMPANY.

BY LETTER DATED FEBRUARY 28, 1956, THE COMPANY ADVISED THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT DID NOT UNDERSTAND THAT A GROUNDCLOTH, IN ADDITION TO A TANK BOTTOM, WAS REQUIRED AND THAT IT FAILED TO INCLUDE THE COST OF THE GROUND CLOTH IN ITS BID PRICE FOR THE TANKS; THAT THE COMPANY'S ENGINEERS AND COST ACCOUNTANTS ASSUMED THAT "TANK BOTTOM" AND "GROUND CLOTH" WERE ONE AND THE SAME THING BECAUSE ON CORPS OF ENGINEERS DRAWING D-10708-1, ITEM 12 OF THE BILL OF MATERIALS IS REFERRED TO AS "GROUND CLOTH" AND ITEM 12 OF THE PLAN VIEW IS CALLED "TANK BOTTOM.' THE COMPANY REQUESTED THAT THE CONTRACT UNIT PRICE FOR THE TANKS BE INCREASED $27.91 TO COVER THE BARE COST OF THE GROUND CLOTH. IT APPEARS FROM THE RECORD THAT THE LETTER OF FEBRUARY 28, 1956, WAS HAND CARRIED TO THE OFFICE OF THE CONTRACTING OFFICER BY A REPRESENTATIVE OF THE COMPANY AND THAT THE CONTRACTING OFFICER ADVISED THE REPRESENTATIVE THAT IT WOULD BE NECESSARY FOR THE COMPANY TO SUBMIT EVIDENCE TO PROVE THAT A BONA FIDE MISTAKE HAD BEEN MADE AND TO ESTABLISH THE INTENDED BID PRICE. IN THE LETTER OF JULY 23, 1956, THE QUARTERMASTER GENERAL STATES THAT BY LETTER DATED MARCH 8, 1956, THE COMPANY SUBMITTED EVIDENCE WHICH, IN THE OPINION OF THE CONTRACTING OFFICER, INDICATED THAT AN HONEST MISTAKE HAD BEEN MADE IN THE BID AND SATISFACTORILY ESTABLISHED THE INTENDED BID PRICE AND THAT IT WAS ON THIS BASIS THAT FORMAL CONTRACT NO. NOM-68586 WAS ISSUED ON MARCH 15, 1956, WITH THE CONDITION THAT THE UNIT PRICE WAS SUBJECT TO CORRECTION BY THE COMPTROLLER GENERAL OF THE UNITED STATES.

IN A LETTER DATED MARCH 29, 1956, ADDRESSED TO THIS OFFICE, THE COMPANY REQUESTED THAT THE CONTRACT UNIT PRICE OF THE TANKS BE INCREASED FROM $503.85 TO $531.37--- A DIFFERENCE OF $27.52--- AND IN SUPPORT OF SUCH REQUEST, IT SUBMITTED THE WORKSHEETS USED IN COMPUTING ITS BID PRICE AND A PHOTOSTATIC COPY OF SHEET NO. 1 OF CORPS OF ENGINEERS DRAWING D-10708-1.

THE FIRESTONE TIRE AND RUBBER COMPANY CONTENDS THAT THE CORPS OF ENGINEERS DRAWING D-10708-1 (GENERAL ASSEMBLY) IS MISLEADING IN THAT UNDER BILL OF MATERIALS, ITEM 12 IS LISTED AS GROUND CLOTH, WHEREAS ITEM 12 ON THE PLAN VIEW IS REFERRED TO AS TANK BOTTOM, THUS LEADING THE COMPANY TO BELIEVE BOTH ITEMS WERE ONE AND THE SAME. IN THAT REGARD, THE QUARTERMASTER GENERAL STATES IN THIS LETTER OF JULY 23, THAT AN EXAMINATION OF THE REFERRED-TO DRAWING WILL REVEAL THAT IT POSSIBLY IS MISLEADING IN THIS RESPECT AND THAT ONLY AFTER A DETAILED STUDY OF THE COMPLETE SET OF DRAWINGS AND THE PURCHASE DESCRIPTION DOES IT CLEARLY APPEAR THAT THE GROUND CLOTH AND TANK BOTTOM ARE NOT THE SAME. HENCE, IT REASONABLY APPEARS THAT THE MATTER IN WHICH THE SPECIFICATIONS WERE DRAWN WAS TO SOME DEGREE MISLEADING AND SUBJECT TO MISINTERPRETATION. IN THE CIRCUMSTANCES, AND SINCE THE ERROR WAS ALLEGED AND ESTABLISHED PRIOR TO THE ISSUANCE OF THE FORMAL CONTRACT, THE COMPANY SHOULD NOT BE REQUIRED TO FURNISH THE TANKS AT THE PRICE QUOTED IN ITS BID.

ACCORDINGLY, CONTRACT NO. NOM-68586, WHICH CONTAINED A STATEMENT THAT THE UNIT PRICE WAS SUBJECT TO CORRECTION BY THIS OFFICE, MAY BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $531.37, AND PAYMENT FOR THE TANKS IS AUTHORIZED TO BE MADE ON THAT BASIS. ON AN OVERALL BASIS, THE BID OF THE FIRESTONE TIRE AND RUBBER COMPANY, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THE TANKS.

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