B-130276, JAN. 14, 1957

B-130276: Jan 14, 1957

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NATIONAL BUREAU OF STANDARDS: REFERENCE IS MADE TO YOUR LETTER OF JANUARY 3. THE PRICE IS $189 PER UNIT. THE FIVE OTHER BIDS RECEIVED ON THE SAME ITEM ARE IN THE AMOUNTS OF $305. THE GOVERNMENT ESTIMATE IS $340. THE LOW BIDDER WAS REQUESTED TO CONFIRM ITS BID BY TELEGRAM OF DECEMBER 19. THE LOW BIDDER WAS CALLED BY TELEPHONE ON DECEMBER 20 AND HE ADVISED THAT A TELEGRAM WAS READY TO BE SENT CONFIRMING THE BID PRICES. THE BIDDER WAS REQUESTED TO AGAIN REVIEW THE ENTIRE PROPOSAL BEFORE GIVING ITS REPLY AND. WAS ALSO ADVISED OF THE PRICES QUOTED BY THE OTHER BIDDERS. THAT THE BIDDER FRANKLY ADMITTED THAT THEY WERE NOT PLANNING TO MAKE DELIVERY UNTIL APPROXIMATELY 90 DAYS AFTER RECEIPT OF THE NOTICE OF AWARD.

B-130276, JAN. 14, 1957

TO MR. BARTON F. BETTS, CONTRACTING OFFICER, NATIONAL BUREAU OF STANDARDS:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 3, 1957, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO THE BID OF TENSOR ELECTRIC DEVELOPMENT COMPANY SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. 121-57, OPENED ON DECEMBER 19, 1956.

THE INVITATION REQUESTED BIDS FOR FURNISHING POWER SUPPLY UNITS FOR LABORATORY RADIO RECEIVERS CURRENTLY BEING MANUFACTURED UNDER ANOTHER CONTRACT. THE INVITATION PROVIDED THAT TIME WOULD BE OF UTMOST IMPORTANCE IN DETERMINING THE AWARD AND THAT BIDS WOULD BE EVALUATED ON THE BASIS OF COST VERSUS TIME AS SET FORTH THEREIN FOR DELIVERY BETWEEN FEBRUARY 4 AND 14, 1957. THE INVITATION DEFINITELY REQUIRED THAT DELIVERY MUST BE EFFECTED ON OR BEFORE FEBRUARY 14, 1957.

IN RESPONSE TO THE INVITATION, TENSOR ELECTRIC DEVELOPMENT COMPANY SUBMITTED A BID DATED DECEMBER 17, 1956, OFFERING TO FURNISH THE EQUIPMENT FOR THE PRICES SET FORTH THEREIN. ON ITEM 1, OPTION 1, THE PRICE IS $189 PER UNIT. THE FIVE OTHER BIDS RECEIVED ON THE SAME ITEM ARE IN THE AMOUNTS OF $305, $316, $330, $352 AND $410 PER UNIT. THE GOVERNMENT ESTIMATE IS $340.

IN VIEW OF THE PRICE QUOTED, THE LOW BIDDER WAS REQUESTED TO CONFIRM ITS BID BY TELEGRAM OF DECEMBER 19, 1956. DUE TO THE EARLY DELIVERY REQUIREMENT AND SINCE NO REPLY HAD BEEN RECEIVED, THE LOW BIDDER WAS CALLED BY TELEPHONE ON DECEMBER 20 AND HE ADVISED THAT A TELEGRAM WAS READY TO BE SENT CONFIRMING THE BID PRICES. NOT BEING CONVINCED BY THE CONVERSATION THAT THE BIDDER FULLY UNDERSTOOD THE REQUIREMENTS OF THE SPECIFICATION, THE BIDDER WAS REQUESTED TO AGAIN REVIEW THE ENTIRE PROPOSAL BEFORE GIVING ITS REPLY AND, UPON REQUEST, WAS ALSO ADVISED OF THE PRICES QUOTED BY THE OTHER BIDDERS. ON DECEMBER 21 THE BIDDER ADVISED THAT ERRORS HAD BEEN MADE IN THE BID AND REQUESTED PERMISSION TO WITHDRAW THE BID. APPARENTLY ON DECEMBER 21 A GOVERNMENT REPRESENTATIVE VISITED THE BIDDER'S PLANT TO INSPECT ITS FACILITIES FOR THE PURPOSE OF DETERMINING ITS ABILITY TO COMPLY FULLY WITH THE REQUIREMENTS OF THE INVITATION. HE REPORTED THAT THE BIDDER HAD MADE SIGNIFICANT ERRORS IN ESTIMATING THE COST OF THE WORK; THAT THE BIDDER FRANKLY ADMITTED THAT THEY WERE NOT PLANNING TO MAKE DELIVERY UNTIL APPROXIMATELY 90 DAYS AFTER RECEIPT OF THE NOTICE OF AWARD; AND THAT THE BIDDER WAS IN HIS OPINION NEITHER PREPARED NOR ABLE TO COMPLY WITH THE SPECIFICATIONS WITHIN THE TIME REQUIRED. BY LETTER DATED DECEMBER 27, 1956, THE BIDDER SUBMITTED IN SUPPORT OF THE ALLEGED ERROR ITS ORIGINAL ESTIMATE SHEET AND A NEW ESTIMATE SHOWING ITS REVISED PRICE OF ITEM 1, OPTION 1, AS $372.68, AND ADMITTED THAT IT COULD NOT PERFORM ON TIME.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE BIDDER SERIOUSLY UNDER-ESTIMATED THE COST OF MANUFACTURING THE ITEM. UNDER THE CIRCUMSTANCES, IT IS QUESTIONABLE WHETHER THE BID COULD BE ACCEPTED IN GOOD FAITH. ASIDE FROM THAT, HOWEVER, IT DOES NOT APPEAR THAT THE BIDDER IS QUALIFIED TO PERFORM IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE INVITATION, AND REJECTION OF THE BID ON THAT GROUND WOULD BE FULLY JUSTIFIED.

ACCORDINGLY, YOU ARE ADVISED THAT THE AWARD MAY BE MADE TO THE NEXT LOW RESPONSIBLE BIDDER, IF SUCH ACTION IS DEEMED TO BE IN THE BEST INTEREST OF THE GOVERNMENT.