B-128728, JUL. 31, 1956

B-128728: Jul 31, 1956

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JULY 24. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE GRANTED IN THIS CASE AS RECOMMENDED BY THE CONTRACTING OFFICER. THE TRANS-AMERICAS TRADING COMPANY SUBMITTED BIDS FOR CERTAIN OF THE ITEMS AND THE SAME WERE ACCEPTED ON MAY 23. THE BIDDER'S EXTENSION OF $28.99 WAS CORRECTED TO CORRESPOND WITH THE UNIT PRICE BID AND WAS DETERMINED TO BE $289.92. THE CONTRACTOR CLAIMED THAT ITS BID SHOULD HAVE BEEN $0.006 PER ROLL AS SUBSTANTIATED BY THE EXTENSION ENTERED IN THE BID FORM. IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE CONTRACTOR IS ENTITLED TO RELIEF. WHILE THE CONTRACTING OFFICER STATED THAT THE UNIT PRICE BID WAS NOT SO OUT OF LINE AS TO INDICATE AN ERROR.

B-128728, JUL. 31, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JULY 24, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY (MATERIAL), RELATING TO A MISTAKE IN BID ALLEGED BY THE TRANS-AMERICAS TRADING COMPANY, NEW YORK, NEW YORK, UNDER CONTRACT NO. N228S-15910 (SALES INVITATION NO. B-231-56), ISSUED BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, AS SET FORTH IN LETTER DATED JULY 12, 1956, FROM THE COMMANDING OFFICER OF THE NAVAL SUPPLY CENTER. VIEW OF THE FACTS SET FORTH IN THE ENCLOSURES TO THE LETTER OF JULY 24, 1956, A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE GRANTED IN THIS CASE AS RECOMMENDED BY THE CONTRACTING OFFICER.

BY INVITATION NO. B-231-56, DATED APRIL 20, 1956, THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, OFFERED FOR SALE CERTAIN MISCELLANEOUS USABLE MATERIAL, THE BIDS TO BE OPENED ON MAY 11, 1956. IN RESPONSE THERETO, THE TRANS-AMERICAS TRADING COMPANY SUBMITTED BIDS FOR CERTAIN OF THE ITEMS AND THE SAME WERE ACCEPTED ON MAY 23, 1956, AS TO ITEM 38A.

ITEM 38A COVERED 4,832 ROLLS OF TAPE, TEXTILE, WHITE, ETC., HAVING IN ACQUISITION COST OF $411.06. AS TO THIS ITEM THE CONTRACTOR SUBMITTED A BID OF $0.06 PER ROLL BUT EXTENDED THE TOTAL AS $28.99. THE CONTRACTING OFFICER REPORTS THAT IN THE CONTRACT AWARDED ON MAY 28, 1956, THE BIDDER'S EXTENSION OF $28.99 WAS CORRECTED TO CORRESPOND WITH THE UNIT PRICE BID AND WAS DETERMINED TO BE $289.92, SUCH CORRECTION BEING IN ACCORDANCE WITH THE CONTRACT PROVISIONS AND WITHOUT CONFIRMATION FO THE BID BY THE CONTRACTOR. BY LETTER OF JUNE 11, 1956, THE CONTRACTOR CLAIMED THAT ITS BID SHOULD HAVE BEEN $0.006 PER ROLL AS SUBSTANTIATED BY THE EXTENSION ENTERED IN THE BID FORM. ON THE BASIS OF THE FACTS IN THIS CASE AND THE TERMS AND CONDITIONS OF THE SALES CONTRACT, IT IS THE OPINION OF THE CONTRACTING OFFICER THAT THE CONTRACTOR IS ENTITLED TO RELIEF, AND HE SO RECOMMENDS.

WHILE THE CONTRACTING OFFICER STATED THAT THE UNIT PRICE BID WAS NOT SO OUT OF LINE AS TO INDICATE AN ERROR, EVEN THOUGH SUCH BID WOULD BRING A RETURN OF 70 PERCENT OF THE ACQUISITION COST, IT IS TO BE NOTED THAT THE UNIT PRICE BID WAS FOUR TIMES THAT OF THE NEXT HIGHEST BID. COUPLED WITH THE FACT--- OBVIOUS UPON SIMPLE MULTIPLICATION OF THE QUANTITY INVOLVED BY THE UNIT PRICE BID--- THAT EITHER THE UNIT PRICE OR THE EXTENSION WAS IN ERROR, THE VARIATION APPEARS TO HAVE BEEN SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF PROBABLE ERROR SO AS TO REQUIRE VERIFICATION BEFORE AWARD. IN REACHING THIS CONCLUSION WE HAVE NOT OVERLOOKED THE PROVISION OF PARAGRAPH 3 OF THE GENERAL SALES TERMS AND CONDITIONS TO THE EFFECT THAT IN CASE OF ERROR IN THE EXTENSION OF PRICES IN THE BID, THE UNIT PRICES WILL GOVERN.

IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE ACCEPTANCE OF THE BID IN THIS CASE AS TO ITEM 38A DID NOT CREATE A CONTRACT BINDING UPON THE BIDDER, AND THE AWARD HEREIN SHOULD ACCORDINGLY BE CANCELLED.

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