B-129088, SEP. 7, 1956

B-129088: Sep 7, 1956

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED AUGUST 27. V5110P-910 WAS AWARDED. PROSPECTIVE BIDDERS WERE ADVISED THAT AWARD WOULD BE MADE ON THE LOWEST AGGREGATE BID FOR WHICHEVER PERIOD IS MOST ADVANTAGEOUS TO THE GOVERNMENT. IT IS STATED IN THE LETTER OF AUGUST 27. THAT REPRESENTATIVES OF VARIOUS DAIRIES WERE PRESENT AT THE BID OPENING AND THAT THEY QUESTIONED THE LOWNESS OF THE BORDEN FIRM'S UNIT PRICE OF $0.59. WHO WAS PRESENT AT THE BID OPENING. WAS REQUESTED TO VERIFY THE CORPORATION'S BID PRICE ON THAT SUBITEM. HE REPLIED THAT HE WAS UNABLE TO DO SO BECAUSE HE WAS NOT FROM THE NEWARK OFFICE OF THE CORPORATION AND. IT WAS ALSO STATED THAT IMMEDIATELY AFTER THE BIDS WERE OPENED AND PRIOR TO AWARD.

B-129088, SEP. 7, 1956

TO THE HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED AUGUST 27, 1956, WITH ENCLOSURES, FROM THE DEPUTY ADMINISTRATOR, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., NEWARK, NEW JERSEY, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. V5110P-910 WAS AWARDED.

THE VETERANS ADMINISTRATION HOSPITAL, LYONS, NEW JERSEY, BY INVITATION NO. 57-15, REQUESTED BIDS--- TO BE OPENED JUNE 15, 1956--- FOR FURNISHING DAIRY PRODUCTS SPECIFIED UNDER VARIOUS ITEMS. GROUPS "A," "B," "C," AND "D" SPECIFY ESTIMATED QUANTITIES OF THE VARIOUS ITEMS TO BE DELIVERED DURING PERIODS OF 3, 6, 9, AND 12 MONTHS, RESPECTIVELY, BEGINNING JULY 1, 1956. ITEM 152 COVERS PASTEURIZED FRESH MILK AND CALLS FOR BID PRICES PER GALLON, FOR DELIVERY OF CERTAIN QUANTITIES IN 1/2-PINT WAXED PAPER CONTAINERS AND OF OTHER QUANTITIES IN TEN-GALLON CANS. PROSPECTIVE BIDDERS WERE ADVISED THAT AWARD WOULD BE MADE ON THE LOWEST AGGREGATE BID FOR WHICHEVER PERIOD IS MOST ADVANTAGEOUS TO THE GOVERNMENT. BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., BY A BID DATED JUNE 12, 1956, OFFERED TO FURNISH FRESH MILK IN 1/2-PINT CONTAINERS FOR ONE, TWO, OR THREE QUARTERS AT PRICES OF $0.692 TO $0.697 PER GALLON, AND FOR THE FULL FOUR QUARTERS AT A PRICE OF $0.59 PER GALLON.

IT IS STATED IN THE LETTER OF AUGUST 27, 1956, THAT REPRESENTATIVES OF VARIOUS DAIRIES WERE PRESENT AT THE BID OPENING AND THAT THEY QUESTIONED THE LOWNESS OF THE BORDEN FIRM'S UNIT PRICE OF $0.59; AND THAT WHEN A REPRESENTATIVE OF BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., WHO WAS PRESENT AT THE BID OPENING, WAS REQUESTED TO VERIFY THE CORPORATION'S BID PRICE ON THAT SUBITEM, HE REPLIED THAT HE WAS UNABLE TO DO SO BECAUSE HE WAS NOT FROM THE NEWARK OFFICE OF THE CORPORATION AND, ALSO, THAT HE HAD NO KNOWLEDGE OF THE PRICES BID BY THE CORPORATION. IT WAS ALSO STATED THAT IMMEDIATELY AFTER THE BIDS WERE OPENED AND PRIOR TO AWARD, BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., TELEPHONED THE HOSPITAL ALLEGING THAT IT HAD MADE AN ERROR IN ITS BID AND THAT THE CORRECT PRICE FOR THE ITEM IN QUESTION WAS $0.69 PER GALLON AND NOT $0.59 PER GALLON AS ORIGINALLY QUOTED. BY LETTER DATED JUNE 15, 1956, THE CORPORATION CONFIRMED ITS VERBAL ALLEGATION OF ERROR IN ITS BID. BECAUSE TIME DID NOT PERMIT THE SUBMISSION OF THE MATTER TO THE GENERAL ACCOUNTING OFFICE PRIOR TO AWARD, THE BID OF BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., WAS ACCEPTED ON THE BASIS OF ITS AGGREGATE BID PRICE OF $118,711.44 FOR GROUP "D," SUBJECT TO CORRECTION, IF AUTHORIZED BY THE GENERAL ACCOUNTING OFFICE.

IN A LETTER DATED JUNE 25, 1956, THE CORPORATION REQUESTED THAT THE CONTRACT UNIT PRICE OF THE MILK IN 1/2-PINTS BE INCREASED FROM $0.59 TO $0.69 PER GALLON.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDDERS ON THE SAME ITEM QUOTED PRICES OF $0.73 AND $0.76 PER GALLON FOR THE SAME PERIOD. THUS, THE BID OF BORDEN'S FARM PRODUCTS OF NEW JERSEY, INC., OF $0.59 PER GALLON IS CLEARLY OUT OF LINE WITH THE OTHER BIDS RECEIVED ON THE ITEM. IT IS NOTED ALSO THAT THERE IS A DIFFERENCE OF APPROXIMATELY TEN CENTS BETWEEN THE UNIT PRICE QUOTED BY THE BORDEN CORPORATION FOR THE FULL YEAR AND ITS PRICES FOR ONE, TWO, AND THREE QUARTERS, WHEREAS NO SUCH DIFFERENCE APPEARS IN ITS PRICES FOR THE SAME MILK IN TEN GALLON CANS FOR THOSE PERIODS, NOR IS THERE A CORRESPONDING DIFFERENCE IN THE PRICES QUOTED BY THE OTHER BIDDERS FOR THE RESPECTIVE PERIODS.

ON THE RECORD, THERE APPEARS NO DOUBT THAT THE BID OF $0.59 PER GALLON FOR SUBITEM 152B OF GROUP "D" WAS ERRONEOUS AND THAT THE PRICE FOR THAT SUBITEM WAS INTENDED TO BE $0.69 PER GALLON, AS ALLEGED. ACCORDINGLY, SINCE THE ERROR WAS ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD, CONTRACT NO. V511OP-910 WHICH WAS EXPRESSLY MADE SUBJECT TO CORRECTION BY THE GENERAL ACCOUNTING OFFICE MAY BE AMENDED TO INCREASE THE UNIT PRICE FOR ITEM 152--- MILK IN 1/2-PINT CONTAINERS -- TO $0.69 AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS, IT APPEARING THAT THE AGGREGATE AMOUNT OF THE CONTRACT, AS CORRECTED, WILL STILL BE THE LOWEST THAT COULD HAVE BEEN MADE ON THE BIDS RECEIVED.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT.