B-130196, JAN. 15, 1957

B-130196: Jan 15, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO THIRD ENDORSEMENT DATED OCTOBER 10. WAS BASED. THE CONTRACT WAS AWARDED ACCORDINGLY. THE RECORD SHOWS THAT THERE WERE SIX OTHER BIDS WHICH RANGED IN PRICE FROM $3. A FURTHER REVIEW OF THE BIDS WAS MADE TO DETERMINE THE PERCENTAGE OF DIFFERENCE BETWEEN THE BIDS. THAT BIDS NOS. 2 AND 3 WERE NOT CONSIDERED SINCE THEY DID NOT COME FROM BIDDERS WITHIN THE LOCAL TRADE AREA. THAT BIDS NOS. 4 AND 5 WERE CONSIDERED PROPER FOR COMPARISON AND THAT THE FORMER IS 49 PERCENT ABOVE THE LOW BID AND THE LATTER 57 PERCENT ABOVE THE LOW BID. THE CONTRACTING OFFICER WOULD HAVE BEEN PUT ON NOTICE OF THE PROBABILITY OF ERROR. BOTH BY THE DIFFERENTIAL BETWEEN THE LOW BID AND OTHERS AND BY THE FACT THAT THE PRICE QUOTED BY THE LOW BIDDER FOR CREOSOTED TIMBERS WAS LOWER THAN THE PREVAILING PRICE FOR UNTREATED TIMBERS.

B-130196, JAN. 15, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO THIRD ENDORSEMENT DATED OCTOBER 10, 1956 (FINEY 167/18 SEP 56 KOPPERS COMPANY, INC.) FROM THE OFFICE OF THE CHIEF OF FINANCE, DEPARTMENT OF THE ARMY, TRANSMITTING A CLAIM BY THE KOPPERS COMPANY, INC., MEMPHIS, TENNESSEE, FOR THE SUM OF $1,000, REPRESENTING AN AMOUNT ALLEGED TO BE DUE BY REASON OF A MISTAKE IN ITS BID ON WHICH CONTRACT NO. DA-22-052-CIVENG-57-83, DATED AUGUST 7, 1956, WAS BASED.

IT APPEARS FROM THE RECORD THAT BY INVITATION NO. CIVENG-22-052-56 186, DATED JUNE 29, 1956, THE VICKSBURG DISTRICT, CORPS OF ENGINEERS, REQUESTED BIDS--- TO BE OPENED JULY 30, 1956--- FOR FURNISHING 100 CREOSOTED PINE TIMBERS AS SHOWN ON DRAWING FILE NO. MR 101/182 AND IN ACCORDANCE WITH THE SPECIFICATIONS. IN RESPONSE THERETO, THE KOPPERS COMPANY, INC., SUBMITTED A BID AT A UNIT PRICE OF $21.66, OR A TOTAL CONTRACT PRICE OF $2,166, AND UNDER DATE OF AUGUST 7, 1956, THE CONTRACT WAS AWARDED ACCORDINGLY. THE RECORD SHOWS THAT THERE WERE SIX OTHER BIDS WHICH RANGED IN PRICE FROM $3,235 TO $9,600.

BY LETTER OF AUGUST 8, 1956, THE CONTRACTOR REQUESTED THAT CONSIDERATION BE GIVEN TO PAYMENT OF AN ADDITIONAL AMOUNT OF $1,000, REPRESENTING AN INCREASE IN THE UNIT PRICE FROM $21.66 TO $31.66 DUE TO AN ALLEGED ERROR. BY FURTHER LETTERS OF AUGUST 13 AND AUGUST 30, 1956, THE CONTRACTOR EXPLAINED THE ERROR, SUBMITTING ITS ORIGINAL WORK SHEET SHOWING THEREON A FIGURE OF "$7.60" IN LIEU OF THE FIGURE "$17.60," THE LATTER BEING THE FIGURE INTENDED AND ACTUALLY RECORDED BY THE ESTIMATOR, BUT UNFORTUNATELY BEING WRITTEN OVER A PRINTED LINE WHICH MADE THE "1" IN THE FIGURE INVISIBLE WITHOUT CLOSE SCRUTINY.

IN LETTER OF SEPTEMBER 18, 1956, THE DISTRICT ENGINEER STATED THAT FOLLOWING THE CONTRACTOR'S REQUEST FOR PAYMENT OF AN ADDITIONAL AMOUNT, A FURTHER REVIEW OF THE BIDS WAS MADE TO DETERMINE THE PERCENTAGE OF DIFFERENCE BETWEEN THE BIDS; THAT BIDS NOS. 2 AND 3 WERE NOT CONSIDERED SINCE THEY DID NOT COME FROM BIDDERS WITHIN THE LOCAL TRADE AREA, AND THAT THEREFORE A TRUE COMPARISON COULD NOT BE OBTAINED DUE TO THE FREIGHT FACTOR INVOLVED; THAT BIDS NOS. 4 AND 5 WERE CONSIDERED PROPER FOR COMPARISON AND THAT THE FORMER IS 49 PERCENT ABOVE THE LOW BID AND THE LATTER 57 PERCENT ABOVE THE LOW BID. THE DIVISION ENGINEER STATED FURTHER THAT HAD A REVIEW BEEN MADE PRIOR TO THE AWARD, THE CONTRACTING OFFICER WOULD HAVE BEEN PUT ON NOTICE OF THE PROBABILITY OF ERROR, BOTH BY THE DIFFERENTIAL BETWEEN THE LOW BID AND OTHERS AND BY THE FACT THAT THE PRICE QUOTED BY THE LOW BIDDER FOR CREOSOTED TIMBERS WAS LOWER THAN THE PREVAILING PRICE FOR UNTREATED TIMBERS. THE DISTRICT ENGINEER EXPRESSED THE VIEW THAT THE CONTRACTOR MADE A BONA FIDE MISTAKE AND RECOMMENDED THAT THE CLAIM BE ALLOWED.

BY FOURTH ENDORSEMENT DATED NOVEMBER 27, 1956, THE ASSISTANT DISTRICT ENGINEER REPORTED THAT 66 ACCEPTABLE TIMBERS HAD BEEN RECEIVED; THAT THE REMAINING 34 TIMBERS HAD NOT BEEN DELIVERED AS OF THAT DATE, AND THAT SINCE IMMEDIATE NEEDS HAD BEEN MET, PRESSURE FOR THE UNDELIVERED PORTION OF THE CONTRACT HAD BEEN WITHHELD PENDING THE RECEIPT OF A DECISION IN THE MATTER, OR UNTIL PROGRESS ON THE WORK FOR WHICH THE TIMBERS WERE NEEDED REQUIRES FURTHER DELIVERIES. THE CONCLUDING PARAGRAPH OF THE ENDORSEMENT IS AS FOLLOWS:

"5. TO DATE, NO PAYMENT HAS BEEN MADE UNDER THE CONTRACT INASMUCH AS THE CONTRACT PROVIDES FOR PAYMENT UPON COMPLETE DELIVERY AND ACCEPTANCE. IF, PRIOR TO THE RENDITION OF A DECISION, COMPLETE DELIVERY AND ACCEPTANCE IS MADE, THIS OFFICE PROPOSES TO MAKE PAYMENT AT THE CONTRACT PRICE AND WITHHOLD THEREFROM A NOMINAL AMOUNT TO KEEP THE CONTRACT OPEN PENDING SETTLEMENT OF THE CLAIM.'

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS NO DOUBT THAT THE CONTRACTOR MADE A BONA FIDE ERROR IN ITS BID AND THAT, IF NOT FOR THE ERROR, ITS BID WOULD HAVE BEEN IN THE AMOUNT OF $3,166, AS ALLEGED. VIEW OF THIS FACT AND SINCE THE AMOUNT OF THE BID AND THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THOSE OF OTHER INDICATED BIDDERS SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE LOW BID, THE CONCLUSION IS WARRANTED THAT THE CONTRACTOR SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO AWARD.

ACCORDINGLY, PAYMENT IS AUTHORIZED TO BE MADE TO THE KOPPERS COMPANY, INC., OF THE AMOUNT OF $3,166 WHEN DELIVERY SHALL HAVE BEEN COMPLETED UNDER THE CONTRACT, THIS ACTION BEING IN ACCORDANCE WITH THE ADMINISTRATIVE RECOMMENDATION, AND THE AMOUNT AUTHORIZED HEREIN TO BE PAID BEING LESS THAN THE AMOUNT OF THE NEXT LOWEST PRICE RECEIVED.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING PAYMENT. THE VOUCHER IN THE AMOUNT OF $1,000 FORWARDED WITH THE SUBMISSION IS RETURNED HEREWITH.