B-127957, MAY 24, 1956

B-127957, MAY 24, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MAY 16, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL) RELATIVE TO AN ALLEGED ERROR IN AN UNDATED PROPOSAL SUBMITTED BY THE LINCOLN CAGE COMPANY ON WHICH CONTRACT NO. N171- 9835-A DATED FEBRUARY 9, 1956, WAS BASED. YOU REQUEST A DECISION AS TO WHETHER THE CONTRACT MAY BE CANCELLED.

ON JANUARY 24, 1956, THE SUPPLY DEPARTMENT, NAVAL GUN FACTORY, WASHINGTON, REQUESTED PROPOSALS FOR FURNISHING F.O.B. WASHINGTON, D.C., TWO (2) GAGES. LINCOLN GAGE COMPANY PROPOSED TO FURNISH THE TWO GAGES STRICTLY IN ACCORDANCE WITH THE SPECIFICATIONS FOR $52.60. NO UNIT PRICE WAS QUOTED ALTHOUGH A SPACE THEREFOR WAS PROVIDED ON THE PROPOSAL FORM IMMEDIATELY PRECEDING THE AMOUNT COLUMN IN WHICH THE COMPANY'S QUOTATION WAS INSERTED. THE ABSTRACT OF PROPOSALS SHOWS THAT FIVE OTHER PROPOSALS FOR FURNISHING TWO GAGES, RANGING IN AMOUNTS FROM $87.60 TO $192, WERE RECEIVED. EACH QUOTED THE APPROPRIATE UNIT PRICE.

UPON RECEIPT OF THE NOTICE OF AWARD, THE COMPANY ADVISED OF A MISTAKE IN ITS PROPOSAL IN THAT ITS UNIT PRICE OF $52.60 WAS INSERTED IN THE AMOUNT COLUMN OF THE PROPOSAL FORM INSTEAD OF IN THE UNIT COLUMN AS INTENDED. THEREFORE, SINCE THE INTENDED QUOTATION WAS $52.60 EACH, OR $105.20 FOR THE TWO GAGES, IT REQUESTED THAT A CHANGE ORDER BE ISSUED CORRECTING THE CONTRACT PRICE TO CONFORM WITH ITS INTENDED QUOTATION. IT HAS REFUSED TO PROCEED WITH PERFORMANCE OF THE CONTRACT AT THE PRICE PRESENTLY SPECIFIED THEREIN.

THE CONTRACTING OFFICER'S UNDATED STATEMENT OF FACTS AND RECOMMENDATION CONTAINS, AMONG OTHERS, THE FOLLOWING PERTINENT STATEMENT:

"THE PRICE DIFFERENTIAL SHOULD HAVE BEEN NOTICED PRIOR TO PLACEMENT OF THE CONTRACT, AS THE ESTIMATE FOR THESE GAGES WAS $65.00 EACH, TOTAL $130.00. THE UNIT PRICE OF THE NAVAL GUN FACTORY ESTIMATE IS MORE THAN THE TOTAL AMOUNT OF LINCOLN GAGE COMPANY'S QUOTATION. THERE IS ALSO SUFFICIENT VARIANCE IN THE PRICE RANGE OF THE 6 PROPOSALS TO HAVE PUT THE PROCURING ACTIVITY ON NOTICE THAT A POSSIBLE ERROR WAS INVOLVED.'

IN VIEW THEREOF, THE CONCLUSION IS WARRANTED THAT THE LINCOLN GAGE COMPANY SHOULD HAVE BEEN REQUESTED TO VERIFY ITS PROPOSAL BEFORE THE ACCEPTANCE THEREOF. SINCE THIS WAS NOT DONE, THE ACCEPTANCE, IN THIS CASE, DID NOT CONSUMMATE A VALID AND BINDING CONTRACT. CONSEQUENTLY, AS RECOMMENDED BY THE CONTRACTING OFFICER, CONTRACT NO. N171-9835-A SHOULD BE CANCELLED.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACTS AND RECOMMENDATION, ARE RETURNED.