B-130292, JAN. 25, 1957

B-130292: Jan 25, 1957

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED JANUARY 8. REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY CHRYSLER MOTORS CORPORATION (SUCCESSOR TO FARGO MOTOR CORPORATION) TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. INCLUDED WERE 98 ONE-HALF TON PANEL TRUCKS. BY ADDENDUM NO. 1 BIDS WERE REQUESTED FOR AN ADDITIONAL 28 TRUCKS. BIDS WERE REQUESTED FOR 44 ADDITIONAL TRUCKS. LISTED AS ITEM 155 (60F) WERE TO BE EQUIPPED WITH A WARNING SIGNAL LIGHT. THE TRUCKS ARE TO BE DELIVERED TO VARIOUS DESTINATIONS WITHIN THE UNITED STATES AND OVERSEAS. BIDDERS WERE REQUIRED TO QUOTE PRICES INCLUSIVE OF FEDERAL EXCISE TAX FOR THE TRUCKS TO BE DELIVERED WITHIN THE UNITED STATES.

B-130292, JAN. 25, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JANUARY 8, 1957, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY CHRYSLER MOTORS CORPORATION (SUCCESSOR TO FARGO MOTOR CORPORATION) TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. ORD 20-113-57-693 ISSUED BY THE ORDNANCE TANK AUTOMOTIVE COMMAND, DETROIT, MICHIGAN.

THE INVITATION, ISSUED ON SEPTEMBER 20, 1956, REQUESTED BIDS FOR FURNISHING APPROXIMATELY 1,000 TRUCKS OF VARIOUS SPECIFIED TYPES, LISTED AS ITEMS NUMBERED 1 THROUGH 133. INCLUDED WERE 98 ONE-HALF TON PANEL TRUCKS, 4 BY 2, ITEMS NOS. 26 THROUGH 59. BY ADDENDUM NO. 1 BIDS WERE REQUESTED FOR AN ADDITIONAL 28 TRUCKS, INCLUDING NINE IDENTICAL TO THE PANEL TRUCKS CALLED FOR BY ITEMS 26-59 OF THE ORIGINAL INVITATION. ADDENDUM NO. 2, BIDS WERE REQUESTED FOR 44 ADDITIONAL TRUCKS, INCLUDING 37 OF THE ONE-HALF TON PANEL TRUCKS, TO BE THE SAME AS THOSE SPECIFIED IN THE ORIGINAL INVITATION AND ADDENDUM NO. 1, EXCEPT THAT TWO TRUCKS, LISTED AS ITEM 155 (60F) WERE TO BE EQUIPPED WITH A WARNING SIGNAL LIGHT, REVOLVING BEAM TYPE, MOUNTED ON THE ROOF OF THE VEHICLE, TOGETHER WITH OTHER MINOR MODIFICATIONS.

THE TRUCKS ARE TO BE DELIVERED TO VARIOUS DESTINATIONS WITHIN THE UNITED STATES AND OVERSEAS. BIDDERS WERE REQUIRED TO QUOTE PRICES INCLUSIVE OF FEDERAL EXCISE TAX FOR THE TRUCKS TO BE DELIVERED WITHIN THE UNITED STATES, AND EXCLUSIVE OF SUCH TAX FOR THOSE TO BE DELIVERED OVERSEAS. THE INVITATION PROVIDES THAT FOR PURPOSES OF BID EVALUATION TRANSPORTATION COSTS FROM F.O.B. POINTS TO ULTIMATE DESTINATIONS LISTED BELOW EACH ITEM WILL BE ADDED TO THE VEHICLE BID PRICE TO DETERMINE THE LOWEST OVERALL COST TO THE GOVERNMENT.

THE CHRYSLER MOTORS CORPORATION SUBMITTED A BID ON ALL ITEMS F.O.B. WARREN TOWNSHIP, MICHIGAN, EXCEPT FOR ITEMS 1 THROUGH 25 (CARRYALLS). WITH THE EXCEPTION HEREAFTER NOTED, THE UNIT PRICES BID BY THE CORPORATION ON ALL ITEMS, INDIVIDUALLY AND ON A TOTAL REQUIREMENT BASIS, WERE IDENTICAL FOR TRUCKS OF THE SAME TYPE AND EQUIPMENT. ON THE PANEL TRUCKS, THE ONES HERE INVOLVED, THE CORPORATION QUOTED A UNIT PRICE OF $1,252.27 FOR THOSE TO BE SHIPPED OVERSEAS (EXCLUSIVE OF FEDERAL EXCISE TAX) AND $1,385.02 FOR THOSE TO BE DELIVERED WITHIN THE UNITED STATES (INCLUSIVE OF FEDERAL EXCISE TAX), FOR THE FOUR GROUPS COVERED BY ITEMS 26 THROUGH 59 (60A THROUGH 60D) AND FOR ITEMS 134 THROUGH 138 (60E). ON ITEM 155 (60F), COVERING PANEL TRUCKS WITH THE EXTRA REVOLVING BEAM WARNING SIGNAL LIGHT, ETC., THE CORPORATION QUOTED A PRICE OF $1,469.83 (INCLUSIVE OF FEDERAL EXCISE TAX), AND THE SAME PRICE WAS QUOTED FOR ITEMS 156 THROUGH 158 (60G) AND ITEMS 159 THROUGH 163 (68), AND A PRICE OF $1,329.33 (EXCLUSIVE OF FEDERAL EXCISE TAX) FOR ITEMS 164 THROUGH 167 (60I). HOWEVER, ITEM 155 (60F) WAS THE ONLY ITEM REQUIRING PANEL TRUCKS WITH THE REVOLVING BEAM WARNING SIGNAL LIGHT, ETC. THE PANEL TRUCKS COVERED BY THE THREE GROUPS, ITEMS 156 THROUGH 167 (60G THROUGH 60I) WERE TO BE IN ACCORDANCE WITH THE IDENTICAL SPECIFICATIONS AS THE FOUR GROUPS COVERED BY ITEMS 26 THROUGH 59 (60A THROUGH 60D) AND ITEMS 134 THROUGH 138 (60E).

BY LETTER DATED NOVEMBER 27, 1956, CHRYSLER MOTORS CORPORATION ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEMS 156 THROUGH 167 AND 60G THROUGH 60I, IN THAT IN ITS ORIGINAL ENGINEERING WRITE-UP THE PANEL TRUCKS COVERED BY THOSE ITEMS WERE GROUPED TOGETHER WITH ITEM 155 (60F) AS REQUIRING THE REVOLVING BEAM WARNING SIGNAL LIGHT, ETC. THE CORPORATION REQUESTED THAT THE UNIT PRICES FOR ITEMS 156 THROUGH 163 (60G AND 60H) BE REDUCED TO $1,385.02 AND THESE FOR ITEMS 164 THROUGH 167 (60I) BE REDUCED TO $1,252.27.

THE CONTRACTING OFFICER REPORTS THAT AFTER CONSIDERATION OF UNIT PRICES, TRANSPORTATION, DISCOUNT AND OTHER FACTORS, THE CHRYSLER MOTORS CORPORATION IS THE LOW BIDDER WITH REGARD TO PANEL TRUCKS ON ITEMS 26, 27, 28, 31, 33, 37, 38, 40, 54, 135, 137 AND 168, AND THAT IF THE CORPORATION BE PERMITTED TO CHANGE ITS BID AS REQUESTED IT WOULD BE LOW ON ITEMS 164 AND 167.

AS WE HAVE SAID MANY TIMES THE QUESTION OF WHETHER THE BIDDER MAY BE PERMITTED TO CHANGE HIS BID--- AFTER THE BIDS HAVE BEEN OPENED--- BECAUSE OF AN ERROR ALWAYS PRESENTS A MATTER OF SERIOUS CONCERN, AND THE INTERESTS OF THE GOVERNMENT AS WELL AS THOSE OF ALL BIDDERS MUST BE TAKEN INTO CONSIDERATION. IN THE INSTANT CASE, IF THE BID BE CORRECTED SUCH ACTION WOULD RESULT IN MAKING A BID LOW WHICH WAS NOT LOW AT THE TIME OF THE OPENING ON TWO OF THE ITEMS. WE HAVE HELD THAT SUCH ACTION SHOULD BE PERMITTED ONLY IN THE CLEAREST CASES AND THEN ONLY WHEN THERE IS SOMETHING IN THE BID ITSELF WHICH SHOWS THAT THE BID IS OBVIOUSLY ERRONEOUS AND WHAT THE BID WOULD HAVE BEEN BUT FOR THE ERROR.

HERE, THE BID OF CHRYSLER MOTORS CORPORATION SHOWS A DEFINITE PATTERN OF BIDDING, BOTH ON THE INDIVIDUAL ITEMS AND ON THE TOTAL REQUIREMENT BASIS, AND IT APPEARS OBVIOUS FROM THE BID ITSELF THAT THE CORPORATION MADE AN ERROR IN GROUPING ITEMS 156 THROUGH 167 (60G THROUGH 60I) WITH ITEM 155 (60F). FURTHERMORE, THERE APPEARS NO DOUBT THAT BUT FOR THE ERROR THE UNIT PRICES WOULD HAVE BEEN $1,385.02 FOR ITEMS 156 THROUGH 163 AND $1,252.27 FOR ITEMS 164 THROUGH 167, AND THAT THE TOTAL AMOUNT FOR EACH OF THE ITEMS AND FOR ITEMS 60G THROUGH 60I WOULD HAVE BEEN THE UNIT PRICE MULTIPLIED BY THE QUANTITY INVOLVED. ACCORDINGLY, YOU ARE ADVISED THAT THE BID OF THE CORPORATION MAY BE CORRECTED AS ABOVE INDICATED, AND THE BIDS ON THE ITEMS AS SO CORRECTED MAY BE CONSIDERED FOR AWARD.