B-128086, SEP. 28, 1956

B-128086: Sep 28, 1956

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTERS DATED JULY 24 AND SEPTEMBER 11. ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. 34 (601) 2924 WAS AWARDED. THE COMPANY ADVISED THAT IT WAS EXTENDING THE PERIOD FOR ACCEPTANCE OF ITS BID TO APRIL 15. WHICH IT IS REPORTED WAS NOT RECEIVED BY THE COMPANY UNTIL APRIL 16. Z. ROSENBERG AND COMPANY ADVISED THE AIR FORCE BUYER BY TELEPHONE THAT ITS BID ON ITEMS 5 AND 6 WAS ERRONEOUS. IT BEING ALLEGED THAT ITS SUPPLIER'S QUOTATION WAS ERRONEOUS IN THAT IT WAS BASED ON FURNISHING A HYDRAULIC COUPLING RATHER THAN THE REQUIRED FUEL COUPLING. THE COMPANY STATED THAT THE CORRECT PRICE OF THE REQUIRED FUEL COUPLING IS $20.95 EACH. WAS THE EASTERN DISTRIBUTOR FOR THE AEROQUIP CORPORATION WHICH.

B-128086, SEP. 28, 1956

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTERS DATED JULY 24 AND SEPTEMBER 11, 1956, WITH ENCLOSURES, FROM THE OFFICE OF THE CHIEF, ADJUDICATIONS BRANCH, SETTLEMENTS DIVISION, AIR FORCE FINANCE CENTER, DENVER, COLORADO, FURNISHING THE REPORTS REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR H. Z. ROSENBERG AND COMPANY, BUFFALO, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. 34 (601) 2924 WAS AWARDED.

IN RESPONSE TO REQUEST FOR PROPOSAL NO. RFP-271-03I-1-OC-665401, ISSUED BY THE CONTRACTING OFFICE, TINKER AIR FORCE BASE, OKLAHOMA CITY, OKLAHOMA, H. Z. ROSENBERG AND COMPANY SUBMITTED A BID, AS AMENDED, OFFERING TO FURNISH THE FUEL SELF SEALING COUPLINGS DESCRIBED UNDER ITEM 5 AND 6 AT A PRICE OF $9.51 EACH. BY TELEGRAM DATED MARCH 16, 1956, THE COMPANY ADVISED THAT IT WAS EXTENDING THE PERIOD FOR ACCEPTANCE OF ITS BID TO APRIL 15, 1956. BY TELEGRAM DATED APRIL 13, 1956, WHICH IT IS REPORTED WAS NOT RECEIVED BY THE COMPANY UNTIL APRIL 16, 1956, THE CONTRACTING OFFICER ADVISED H. Z. ROSENBERG AND COMPANY THAT ITS BID AS TO ITEMS 5 AND 6 HAD BEEN ACCEPTED.

IT APPEARS THAT, UPON RECEIPT OF THE TELEGRAM, H. Z. ROSENBERG AND COMPANY ADVISED THE AIR FORCE BUYER BY TELEPHONE THAT ITS BID ON ITEMS 5 AND 6 WAS ERRONEOUS, AND BY TELEGRAM DATED APRIL 16, 1956, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT THE CONTRACT PRICE OF THE COUPLINGS COULD NOT BE INCREASED AFTER DISTRIBUTION OF THE CONTRACT. IN A LETTER DATED APRIL 18, 1956, THE COMPANY REPEATED ITS REQUEST FOR RELIEF UNDER THE CONTRACT.

BY LETTER DATED MAY 23, 1956, TO OUR OFFICE, H. Z. ROSENBERG AND COMPANY REQUESTED THAT THE CONTRACT PRICE OF ITEMS 5 AND 6 BE INCREASED FROM $9.51 TO APPROXIMATELY $24.50 EACH, IT BEING ALLEGED THAT ITS SUPPLIER'S QUOTATION WAS ERRONEOUS IN THAT IT WAS BASED ON FURNISHING A HYDRAULIC COUPLING RATHER THAN THE REQUIRED FUEL COUPLING. IN A LETTER DATED JUNE 14, 1956, THE COMPANY STATED THAT THE CORRECT PRICE OF THE REQUIRED FUEL COUPLING IS $20.95 EACH, AND THAT ITS SUPPLIER, AMNOR AVIATION COMPANY, WAS THE EASTERN DISTRIBUTOR FOR THE AEROQUIP CORPORATION WHICH, IT STATED, WAS THE SOLE MANUFACTURER OF THE REQUIRED SPECIAL COUPLING. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY FURNISHED A COPY OF A LETTER DATED MAY 23, 1956, RECEIVED FROM ITS SUPPLIER, AMNOR AVIATION COMPANY, AND A DUPLICATE COPY OF THE ORIGINAL QUOTATION RECEIVED FROM ITS SUPPLIER, IN WHICH THE COMPANY WAS QUOTED A LIST PRICE OF $14 EACH LESS A DISCOUNT OF 40 PERCENT. BY LETTER DATED JULY 25, 1956, THE COMPANY SUBMITTED A COPY OF A LETTER DATED JULY 19, 1956, RECEIVED FROM AEROQUIP CORPORATION, THE MANUFACTURER OF THE REQUIRED COUPLING, WHICH READS, IN PART, AS FOLLOWS:

"AT THE REQUEST OF MR. BERG ENDERSEN OF AMNOR AVIATION COMPANY, WE ARE FORWARDING THREE COPIES OF AEROQUIP STANDARD DRAWING NUMBER O14001 S5.

"THIS STANDARD DRAWING COVERS AEROQUIP PART NUMBER 014001-S5-20D SELF- SEALING COUPLING. WE UNDERSTAND YOU HAVE 900 PIECES OF THIS PART ON ORDER THROUGH OUR DISTRIBUTOR, AMNORAVIATION COMPANY, MAMARONECK, NEW YORK.

"IN ORDER TO CLARIFY THE CONFUSION SURROUNDING THE CORRECT PRICE FOR THIS PART, WE WOULD LIKE TO STATE THAT THE ESTABLISHED LIST PRICE IS $29.86 EACH. IN ADDITION, OUR NET PRICE TO AMNOR AVIATION COMPANY IS $14.93 EACH.

"WE HOPE THAT THIS INFORMATION WILL HELP YOU IN YOUR NEGOTIATIONS WITH THE FINANCE DEPARTMENT OF THE U.S. GOVERNMENT IN WASHINGTON, D.C.

"IT IS INDEED UNFORTUNATE THAT THE MISUNDERSTANDING REGARDING THE CORRECT PRICE OF THIS PART HAS ARISEN. HOWEVER, AS YOU CAN SEE FROM THE PRICES MENTIONED, THE PRICE QUOTED TO YOU BY OUR DISTRIBUTOR WAS IN ERROR AND AS A RESULT, HE STANDS TO LOSE A CONSIDERABLE SUM OF MONEY.

"THE COUPLING IS A SPECIAL FUEL COUPLING MANUFACTURED AND SOLD PREVIOUSLY ONLY TO REPUBLIC AVIATION CORPORATION FOR USE ON THEIR MODEL F84F AIRPLANE. POSSIBLY, FOR THIS REASON AMNOR AVIATION DID NOT REALIZE THE SPECIAL NATURE AND LIMITED USAGE OF THIS COUPLING.

"IN VIEW OF THE SITUATION AND THE MISUNDERSTANDING REGARDING THE CORRECT PRICE, WE FEEL THAT THE FINANCE DEPARTMENT OF THE U.S. GOVERNMENT SHOULD MAKE AN ADJUSTMENT IN YOUR CONTRACTED PRICE.'

IT IS REPORTED THAT THE TWO OTHER BIDS RECEIVED ON THE COUPLINGS COVERED BY ITEMS 5 AND 6 WERE SUBMITTED BY THE AEROQUIP CORPORATION AND THE AERO- COUPLING CORPORATION WHO SPECIFIED PRICES OF $14.75 AND $14.85 EACH, RESPECTIVELY, AND THAT THESE COMPANIES ARE THE ONLY KNOWN MANUFACTURERS OF THE REQUIRED COUPLINGS. IN VIEW OF THE DIFFERENCE BETWEEN THE BID OF H. Z. ROSENBERG AND COMPANY OF $9.51 EACH FOR THE COUPLINGS COVERED BY ITEMS 5 AND 6 AND THE OTHER BIDS ON THOSE ITEMS, THE POSSIBILITY OF ERROR WAS APPARENT AND, IN THE CIRCUMSTANCES, THE BID AS TO ITEMS 5 AND 6 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, IT IS APPARENT THAT THE COMPANY MADE AN ERROR IN QUOTING A PRICE OF $9.51 EACH FOR ITEMS 5 AND 6. HOWEVER, IF THE BID BE CORRECTED TO THE INTENDED BID PRICE OF $20.95 EACH, IT WILL NOT BE THE LOWEST BID ON THOSE ITEMS. IT APPEARS FROM THE COMPANY'S LETTER OF AUGUST 14, 1956, THAT IT HAS DELIVERED THE COUPLINGS REQUIRED UNDER ITEMS 5 AND 6 OF THE CONTRACT. ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE TO H. Z. ROSENBERG AND COMPANY FOR THE COUPLINGS WHICH HAVE BEEN DELIVERED UNDER ITEMS 5 AND 6 IN AN AMOUNT NOT IN EXCESS OF THE NEXT LOWEST CORRECT BID ON THOSE ITEMS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING PAYMENT FOR ITEMS 5 AND 6.