B-127776, MAY 15, 1956

B-127776: May 15, 1956

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MAY 1. WAS AWARDED. IT IS STATED: "AT THE TIME OF EVALUATING BIDS. IT WAS NOTED THAT THE APPELLANT HAD ENTERED (1) AN APPARENTLY INCORRECT REFERENCE IN THE NEW YORK JOURNAL OF COMMERCE UNDER COLUMN II. IS NOT LISTED FOR TANK WAGON PRICES IN BOSTON. 1955 WAS BASED ON THE TANK WAGON PRICE. (4) A MAXIMUM PRICE WHICH EVIDENTLY WAS A NET PRICE AFTER DEDUCTING THE DIFFERENTIAL FROM THE ADJUSTED TANK WAGON PUBLISHED PRICE. (A) IT WAS FELT THAT THE FIRST THREE FACTORS COULD BE ADJUSTED AS AN INFORMALITY WITHOUT CHANGING THE INTENT OF THE BID. NO MENTION WAS MADE OF THE FOURTH FACTOR. * * *" BY TELEGRAM DATED AUGUST 12. THE TANK CAR PRICE ON NO. 2 HEATING OIL AND DIESEL FUEL OIL WAS BEING INCREASED 25 POINTS PER GALLON.

B-127776, MAY 15, 1956

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MAY 1, 1956, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE BOSTON ICE COMPANY ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. GS-01S -2869, DATED JULY 14, 1955, WAS AWARDED.

THE FEDERAL SUPPLY SERVICE, REGION 1, BOSTON, MASSACHUSETTS, BY INVITATION NO. BO-C-I-143-55, REQUESTED BIDS FOR FURNISHING FUEL OIL AND KEROSENE, CLASS 7, AND DRY CLEANING SOLVENTS, CLASS 51, THROUGHOUT REGION 1 DURING THE PERIOD AUGUST 1, 1955, THROUGH JULY 31, 1956. THE INVITATION PROVIDED, IN EFFECT, THAT BIDS SHOULD BE BASED ON AN ESCALATING REFERENCED PRICE AS LISTED IN A RECOGNIZED TRADE PUBLICATION TO BE SELECTED BY THE BIDDER AND THAT THE PUBLISHED PRICE FOR EACH ITEM CONCERNED FOR MAY 6, 1955, SHOULD BE USED FOR BIDDING PURPOSES. THE INVITATION FURTHER PROVIDED FOR THE BIDDER TO INDICATE A DIFFERENTIAL, IF ANY, PER GALLON, TO BE DEDUCTED FROM OR ADDED TO THE ESCALATING REFERENCED PRICE AND FOR THE BIDDER TO QUOTE A MAXIMUM PRICE PAYABLE FOR THE ITEM, PER GALLON, IF ANY.

IN A REPORT DATED MARCH 22, 1956, FROM THE CONTRACTING OFFICER, IT IS STATED:

"AT THE TIME OF EVALUATING BIDS, IT WAS NOTED THAT THE APPELLANT HAD ENTERED (1) AN APPARENTLY INCORRECT REFERENCE IN THE NEW YORK JOURNAL OF COMMERCE UNDER COLUMN II, AS ESSO STANDARD OIL CO. IS NOT LISTED FOR TANK WAGON PRICES IN BOSTON, MASS. (2) THE PRICE AS OF MAY 6, 1955 AT ?005 PER GALLON BELOW THE POSTED TANK WAGON PRICE PUBLISHED IN THE NEW YORK JOURNAL OF COMMERCE, (3) THE DIFFERENTIAL AS A DEDUCTION, INDICATING THAT THE PRICE AS OF MAY 6, 1955 WAS BASED ON THE TANK WAGON PRICE, (4) A MAXIMUM PRICE WHICH EVIDENTLY WAS A NET PRICE AFTER DEDUCTING THE DIFFERENTIAL FROM THE ADJUSTED TANK WAGON PUBLISHED PRICE.

(A) IT WAS FELT THAT THE FIRST THREE FACTORS COULD BE ADJUSTED AS AN INFORMALITY WITHOUT CHANGING THE INTENT OF THE BID, IN ORDER THAT THE BID MIGHT COINCIDE WITH THE INFORMATION REQUESTED BY THE INVITATION. CALLED MR. CLARK OF THE APPELLANT'S OFFICE, WHO HAD SIGNED THE BID, AND DISCUSSED THE FIRST THREE FACTORS. AS WE RECALL, NO MENTION WAS MADE OF THE FOURTH FACTOR. * * *"

BY TELEGRAM DATED AUGUST 12, 1955, THE BOSTON ICE COMPANY ADVISED THAT, EFFECTIVE AUGUST 15, 1955, THE TANK CAR PRICE ON NO. 2 HEATING OIL AND DIESEL FUEL OIL WAS BEING INCREASED 25 POINTS PER GALLON. IT APPEARS THAT AFTER BEING INFORMED THAT THE REQUESTED INCREASE IN THE PRICE OF THE HEATING AND DIESEL FUEL OIL WAS NOT PERMISSIBLE UNDER THE CONTRACT, THE COMPANY ADVISED BY LETTER DATED OCTOBER 3, 1955, THAT IT HAD MADE A TYPOGRAPHICAL ERROR IN ITS BID IN THAT IT HAD FAILED TO CHANGE THE CAPTION FOR COLUMN IV FROM "MAXIMUM PRICE" TO READ "DELIVERED PRICE (PRICE AT TIME OF DELIVERY)," AS SHOWN ON ITS RETAINED OFFICE COPY; THAT COLUMN III SHOWS THE DIFFERENTIAL TO BE DEDUCTED FROM TANK WAGON PRICE AT TIME OF DELIVERY; AND THAT THE COLUMN IV SPECIFICALLY SHOWS THE DELIVERY PRICE, NOT A MAXIMUM PRICE. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY, BY LETTER DATED NOVEMBER 14, 1955, SUBMITTED THE APPLICABLE PORTION OF THE RETAINED OFFICE COPY OF ITS BID WHICH SHOW THAT, ON EACH PAGE, THE COMPANY CROSSED OUT THE CAPTION "MAXIMUM PRICE PAYABLE FOR ITEM (PER GAL.)" APPEARING AT THE TOP OF COLUMN IV, AND INSERTED IN LIEU THEREOF THE CAPTION ,DELV. PRICE.' BY TELEGRAM DATED NOVEMBER 22, 1955, THE COMPANY ADVISED THAT, EFFECTIVE IMMEDIATELY, ALL VOLUNTARY ALLOWANCES ON NOS. 1 AND 2 OIL AND DIESEL OILS HAD BEEN WITHDRAWN.

IN A LETTER DATED FEBRUARY 16, 1956, THE COMPANY STATED:

"YOU ARE ADVISED THAT WORDS IN HEADING OF COLUMN IV "MAXIMUM PRICE PAYABLE FOR ITEM (PER L.)," ON THE ORIGINAL INVITATION FOR BIDS, DATED MAY 12, 1955, AND THE WORK COPY WERE CROSSED OUT AND THE WORDS,"DELV. PRICE" ADDED. THIS NOTATION WAS ERRONEOUSLY OMITTED FROM THE FINISHED COPY SUBMITTED TO GENERAL SERVICES ADMINISTRATION, REGION 1, BOSTON, MASSACHUSETTS. THE FINISHED COPY DID, HOWEVER, CONTAIN ITEMS IN COLUMN IV, SPECIFICALLY MARKED, SOME WITH THE WORDS,"FIRM," OR ,FLAT," WHEN IT WAS MEANT TO DIFFER FROM THE PURPOSE OF THE CHANGED CAPTION,"DEL-D PRICE," AS SHOWN ON THE INVITATION FOR BIDS, AND THE WORK SHEET. ALL OTHER ITEMS SHOWN DID CONFORM TO THE CHANGED CAPTION,"DEL-D PRICE," INDICATING AN INTENTION TO QUOTE A FLUCTUATING PRICE, WHICH IS INDICATIVE OF THE FACT THAT THE PRICES QUOTED IN THE SUBMITTED BID ARE IDENTICAL WITH THOSE CONTAINED IN COLUMN IV OF THE CHANGED CAPTION "DEL-D PRICE" IN THE WORK SHEET AND THE INVITATION FOR BIDS AS SUBMITTED.

"IN VIEW OF THE FOREGOING, IT IS OBVIOUS, THAT A CLERICAL ERROR WAS MADE IN NEGLECTING TO CHANGE THE CAPTION TO "DEL-D PRICE," IN COLUMN IV ON THE BID SUBMITTED.

"IT IS REQUESTED THAT ON ADJUSTMENT BE MADE TO CONFORM WITH THE CHANGED CAPTION, AS HERETOFORE, OUTLINED. THE PRICES UNDER THIS BID AS QUOTED WOULD STILL BE THE LOWEST AND THE MOST ADVANTAGES TO THE GOVERNMENT, AND AT THE SAME TIME WOULD NOT RENDER AN INJUSTICE TO THIS COMPANY, AS WOULD BE IF THE PRICES WITHOUT THE CHANGED CAPTION,"DEL-D PRICE," IN COLUMN IV OF THE BID WERE TO BE ENFORCED AGAINST US.'

IN HIS REPORT THE CONTRACTING OFFICER STATES THAT AN ESTIMATED 494,500 GALLONS OF FUEL OIL WILL BE DELIVERED DURING THE PERIOD OF THE CONTRACT AND THAT THE AMOUNT OF MONEY INVOLVED IN THE SUBSEQUENT INCREASES IN PRICE REPRESENTS A SUBSTANTIAL SUM.

IT IS SIGNIFICANT THAT, AT THE TIME OF EVALUATING THE BIDS, THE CONTRACTING OFFICER NOTED, AMONG OTHER DISCREPANCIES IN THE BID, THAT THE COMPANY HAD QUOTED A MAXIMUM PRICE WHICH, HE STATES, EVIDENTLY WAS A NET PRICE AFTER DEDUCTING THE DIFFERENTIAL FROM THE ADJUSTED TANK WAGON PUBLISHED PRICE; AND THAT WHILE HE BROUGHT OTHER DISCREPANCIES TO THE ATTENTION OF THE COMPANY, HE FAILED TO BRING THE DISCREPANCY AS TO THE MAXIMUM PRICE TO ITS ATTENTION. IT HAS BEEN HELD THAT WHERE A CONTRACTING OFFICER KNOWS THE BASIS OF A PROBABLE ERROR IN A BID HE IS DUTY BOUND TO OUT THE BIDDER ON NOTICE OF THE MISTAKE HE SURMISES. SEE UNITED STATES V. METRO NOVELTY MFG. CO., INC., 125 F.SUPP. 713.

ACCORDINGLY, CONTRACT NO. GS-01S-2869 MAY BE AMENDED TO PROVIDE FOR THE CHANGING OF THE CAPTION FOR COLUMN IV FROM "MAXIMUM PRICE" TO "DELIVERED PRICE" AND PAYMENT FOR THE DELIVERIES MADE AND TO BE MADE MAY BE EFFECTED ON THE BASIS OF SUCH CORRECTION, THE PRICES PAID, HOWEVER, NOT TO EXCEED THE LOWEST MAXIMUM PRICES QUOTED BY ANY OTHER BIDDER FOR THE ITEMS IN QUESTION.

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