B-128719, AUG. 6, 1956

B-128719: Aug 6, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO YOUR LETTER DATED JULY 24. TO HAVE BEEN MADE IN ITS PRICE QUOTATION INVOLVING ITEM NO. 2 OF PURCHASE ORDER NO. 415-56. A DECISION IS REQUESTED AS TO THE APPROPRIATE ACTION TO BE TAKEN BY YOUR DEPARTMENT IN THE MATTER. ORAL QUOTATIONS ON 29 ITEMS WERE RECEIVED FROM THE TAYLOR-PARKER COMPANY. HRAT 710 56 IS BEING CONSIDERED HEREIN SINCE THE CONTRACTOR HAS ALLEGED MISTAKE ONLY AS TO SUCH ITEM. - TAYLOR-PARKER COMPANY'S QUOTATION WAS $140.84 ($5.87 EACH). THE ONLY OTHER PRICE QUOTED FOR THIS ITEM WAS $12.10 PER LOCK. THE RECORD REFLECTS THAT BECAUSE OF THE DIFFERENCE IN THE PRICES QUOTED ON ITEM 2 (THE LARGER PRICE HAVING BEEN OBTAINED FIRST) THE CONTRACTING OFFICER QUESTIONED THE PRICE OF THE TAYLOR-PARKER COMPANY WHEN IT WAS FURNISHED.

B-128719, AUG. 6, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 24, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), RELATING TO A MISTAKE ALLEGED BY THE TAYLOR-PARKER COMPANY, NORFOLK, VIRGINIA, TO HAVE BEEN MADE IN ITS PRICE QUOTATION INVOLVING ITEM NO. 2 OF PURCHASE ORDER NO. 415-56, DATED NOVEMBER 7, 1955. IN VIEW OF THE FACTS SET FORTH IN THE ENCLOSURES TO THE LETTER OF JULY 24, 1956, A DECISION IS REQUESTED AS TO THE APPROPRIATE ACTION TO BE TAKEN BY YOUR DEPARTMENT IN THE MATTER.

THE RECORD SHOWS THAT ON OR ABOUT OCTOBER 28, 1955, IN RESPONSE TO ORAL REQUESTS BY THE HEADQUARTERS, HAMPTON ROADS ARMY TERMINAL, NORFOLK, VIRGINIA, ORAL QUOTATIONS ON 29 ITEMS WERE RECEIVED FROM THE TAYLOR-PARKER COMPANY. ONLY ITEM 2 OF INVITATION FOR BID NO. HRAT 710 56 IS BEING CONSIDERED HEREIN SINCE THE CONTRACTOR HAS ALLEGED MISTAKE ONLY AS TO SUCH ITEM.

AS TO ITEM 2--- 24 LOCKS, YALE MODEL C.U. 77501--- TAYLOR-PARKER COMPANY'S QUOTATION WAS $140.84 ($5.87 EACH). THE ONLY OTHER PRICE QUOTED FOR THIS ITEM WAS $12.10 PER LOCK. THE RECORD REFLECTS THAT BECAUSE OF THE DIFFERENCE IN THE PRICES QUOTED ON ITEM 2 (THE LARGER PRICE HAVING BEEN OBTAINED FIRST) THE CONTRACTING OFFICER QUESTIONED THE PRICE OF THE TAYLOR-PARKER COMPANY WHEN IT WAS FURNISHED, BUT WAS ADVISED BY THE PRICE CLERK THAT HE HAD CHECKED BY PHONE WITH THE SUPPLIER AND THAT THE PRICE QUOTED TO THE CONTRACTING OFFICER WAS THE PRICE QUOTED TO THE TAYLOR- PARKER COMPANY BY THE SUPPLIER. WITHOUT FURTHER QUESTION THE CONTRACTING OFFICER ISSUED PURCHASE ORDER NO. 415 56, DATED NOVEMBER 7, 1955, TO THE TAYLOR-PARKER COMPANY.

BY LETTER DATED DECEMBER 5, 1955, THE TAYLOR-PARKER COMPANY REQUESTED THAT ITEM 2 OF THE PURCHASE ORDER BE AMENDED TO INDICATE A UNIT PRICE OF $12.10 FOR THAT ITEM INSTEAD OF $70.42 PER DOZEN ($5.87 EACH). AS A BASIS FOR ITS REQUEST FOR THE INCREASE, THE COMPANY ALLEGED THAT THE PRICE QUOTED TO THE COMPANY BY ITS SUPPLIER WAS FOR A DIFFERENT LOCK WHICH WAS NOT EQUIVALENT TO THE ONE DESCRIBED IN THE SPECIFICATIONS. THE CONTRACTING OFFICER ADVISED THE COMPANY THAT ITS REQUEST TO AMEND ON ACCOUNT OF THE MISTAKE WAS DENIED BECAUSE THE ISSUANCE OF THE PURCHASE ORDER CONSTITUTED A BINDING CONTRACT UNDER WHICH THE GOVERNMENT ACQUIRED A LEGAL AND VESTED RIGHT TO RECEIVE THE ITEMS LISTED THEREON AT THE PRICES QUOTED. THE CONTRACTING OFFICER FURTHER ADVISED THAT THE TAYLOR-PARKER COMPANY WOULD BE REQUIRED TO DELIVER ITEM 2 AT THE QUOTED PRICE, AND THAT SUCH ACTION DID NOT MEAN THAT NO ADDITIONAL AMOUNT WOULD BE ALLOWED BUT RATHER THAT HE DID NOT HAVE THE AUTHORITY TO AMEND THE BID; AND THAT THE INCREASE, IF ANY, WOULD BE FOR DECISION BY HIGHER AUTHORITY. THE BIDDER THUS PROCEEDED TO DELIVER ALL THE ITEMS CONTAINED IN THE PURCHASE ORDER, HAVING PURCHASED ITEM 2 FROM A NEW YORK SUPPLIER AT $10.56 PER UNIT.

THE BIDDER'S ERROR ALLEGED IN HIS LETTER OF DECEMBER 5, 1955, WAS BROUGHT TO THE ATTENTION OF THE CONTRACTING OFFICER IN A TIMELY MANNER, AND PUT THE CONTRACTING OFFICER ON NOTICE THAT THE BIDDER WAS CORRECTING THE PRICE LISTED FOR ITEM 2. THEREFORE, SINCE IT DOES NOT APPEAR THAT THE PURCHASE ORDER, ISSUED ON THE BASIS OF AN ALLEGED ORAL QUOTATION OF PRICE ONLY, COULD BE ESTABLISHED AS AN UNQUALIFIED ACCEPTANCE OF AN OFFER IDENTICAL IN ALL ITS TERMS, AND SINCE IT SUFFICIENTLY APPEARS THAT THE CONTRACTOR MADE AN ERROR IN HIS QUOTATION, AND THAT THE SELLER'S PERFORMANCE WAS ON THE BASIS THAT THE PRICE OF ITEM 2 WOULD BE SUBJECT TO CORRECTION BY HIGHER AUTHORITY, RATHER THAN UNQUALIFIEDLY IN COMPLIANCE WITH THE ORDER, THERE APPEARS NO OBJECTION TO AMENDING THE PURCHASE ORDER TO REFLECT THE PRICE ACTUALLY PAID TO THE SUPPLIER BY THE CONTRACTOR FOR ITEM 2 IF SUCH PRICE IS CONSIDERED FAIR AND REASONABLE.