B-128828, AUG. 10, 1956

B-128828, AUG. 10, 1956

TO HONORABLE JEROME C. HUNSAKER, CHAIRMAN, NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS:

REFERENCE IS MADE TO A LETTER DATED AUGUST 3, 1956, WITH ENCLOSURES, FROM THE EXECUTIVE OFFICER OF YOUR COMMITTEE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE BROOKLYN TOOL AND MACHINE COMPANY, INC., ALLEGES IT MADE IN ITS BID OPENED ON JUNE 14, 1956.

BY INVITATION NO. L-8039, THE PROCUREMENT OFFICER, LANGLEY FIELD, VIRGINIA, REQUESTED BIDS FOR THE MANUFACTURE, SHOP ASSEMBLY, AND DELIVERY OF RESERVOIR ASSEMBLIES AND ADDITIONAL PARTS FOR USE WITH MANOMETER BOARDS AT THE LANGLEY AERONAUTICAL LABORATORY, LANGLEY FIELD, VIRGINIA, ITEMS 1 TO 13, INCLUSIVE. PROSPECTIVE BIDDERS WERE ADVISED THAT AWARD MAY BE MADE TO THE LOWEST AGGREGATE BIDDER UNDER ALL ITEMS IN ORDER TO MINIMIZE DIFFICULTY IN MATCHING OF MATING PARTS. IN RESPONSE THE BROOKLYN TOOL AND MACHINE COMPANY, INC., SUBMITTED A BID DATED JUNE 13, 1956, OFFERING TO FURNISH THE ASSEMBLIES UNDER ITEMS 1 AND 2 AT A UNIT PRICE OF $403, AND TO FURNISH THE PARTS UNDER ITEMS 3 TO 13, INCLUSIVE, AT THE UNIT PRICES SET FORTH OPPOSITE EACH ITEM, MAKING THE TOTAL PRICE FOR ALL ITEMS $10,956.25. THE CORPORATION STIPULATED IN ITS BID THAT ITS PROPOSAL WAS BASED ON ACCEPTANCE OF ALL ITEMS. THE THREE OTHER RESPONSIVE AGGREGATE BIDS ON ITEMS 1 TO 13, INCLUSIVE, WERE IN THE AMOUNTS OF $16,367, $17,694.20, AND $17,777.55 AND THE GOVERNMENT'S ESTIMATE OF THE COST OF THE EQUIPMENT WAS $17,000.

IT IS STATED IN THE EXECUTIVE OFFICER'S LETTER THAT UPON OPENING OF BIDS AND PRIOR TO AWARD, THE FIELD CONTRACTING OFFICER NOTED THE DISPARITY IN PRICES BETWEEN THE BID OF THE BROOKLYN TOOL AND MACHINE COMPANY, INC., ON ITEMS 1, 2, 4, AND 5 AND THE OTHER BIDS RECEIVED AND, THEREFORE, THE CORPORATION WAS REQUESTED BY TELEPHONE TO CONFIRM ITS BID.

BY LETTER DATED JUNE 18, 1956, THE CORPORATION ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEMS 1 AND 2 IN THAT IT HAD FAILED TO EXTEND ON ITS ESTIMATE SHEETS FOR THOSE ITEMS THE LABOR COST OF $60 PER UNIT FOR THE PART COVERED BY DRAWING NO. LDZ31389, AND THE LABOR COST OF $50 PER UNIT ON THE PART COVERED BY DRAWING NO. LDZ31388-1-2. THE CORPORATION REQUESTED THAT THE UNIT PRICE FOR ITEMS 1 AND 2 BE INCREASED BY $110 TO $513 OR, IN THE ALTERNATIVE, THAT IT BE PERMITTED TO WITHDRAW ITS BID. SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED THE ESTIMATE SHEETS USED IN COMPUTING ITS BID PRICE FOR ITEMS 1 AND 2. IN THE EXECUTIVE OFFICER'S LETTER IT IS STATED FURTHER THAT AN EXAMINATION OF THE CORPORATION'S ESTIMATE SHEETS INDICATES THAT AN ERROR WAS MADE AS ALLEGED AND THAT THE DIRECT COST FOR ITEMS 1 AND 2 SHOULD HAVE BEEN $433.35 PER UNIT INSTEAD OF $323.35, A DIFFERENCE OF $110; THAT IT APPEARED TO THE FIELD CONTRACTING OFFICER THAT HAD THE CORRECT DIRECT COST FOR ITEMS 1 AND 2 BEEN INCLUDED IN THE ESTIMATE, AND HAD THE BIDDER'S MARK-UP OF 15 PERCENT MORTALITY FOR CUTTERS AND EXPENDABLE TOOLS, AND 10 PERCENT FOR PROFIT BEEN APPLIED, THE UNIT PRICE FOR ITEMS 1 AND 2 WOULD HAVE EXCEEDED THE AMOUNT OF $513 WHICH THE CORPORATION CLAIMED WAS ITS INTENDED BID PRICE FOR THESE ITEMS; AND THAT BY LETTER DATED JUNE 29, 1956, THE CORPORATION WAS REQUESTED TO FURNISH AN EXPLANATION OF THIS DISCREPANCY. BY LETTER DATED JULY 2, 1956, THE CORPORATION ADVISED THAT IT WAS AWARE OF THE FACT THAT ITS INTENDED BID PRICE WOULD HAVE BEEN IN EXCESS OF $513 BUT, SINCE IT HAD MADE ADEQUATE PROVISIONS FOR PROTECTION AND MORTALITY FOR CUTTERS AND EXPENDABLE TOOLS, IT WOULD BE WILLING TO FURNISH THE ASSEMBLIES AT THAT PRICE.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE CORPORATION MADE AN ERROR IN ITS BID, AS ALLEGED, AND IT IS APPARENT THAT THE INTENDED UNIT BID PRICE FOR ITEMS 1 AND 2 WAS APPROXIMATELY $548, WHICH AMOUNT IS STILL LOWER THAN THE AMOUNT OF THE NEXT LOWEST BID RECEIVED ON THOSE ITEMS. ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID AS TO ITEMS 1 AND 2 WAS ERRONEOUS AND SUCH BELIEF WAS CONFIRMED PRIOR TO AWARD, THE BID OF THE BROOKLYN TOOL AND MACHINE COMPANY, INC., MAY BE CORRECTED TO PROVIDE FOR A UNIT PRICE OF $513 FOR ITEMS 1 AND 2, AND THE BID, AS SO CORRECTED, MAY BE CONSIDERED WITH THE OTHER BIDS IN MAKING THE AWARD.

IN THE EVENT OF AWARD TO THE BROOKLYN TOOL AND MACHINE COMPANY, INC., A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE ABSTRACT OF BIDS AND THE CONTRACTOR'S ESTIMATE SHEETS, ARE RETURNED.