B-130402, JAN. 25, 1957

B-130402: Jan 25, 1957

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JANUARY 17. RELATING TO A MISTAKE IN BID ALLEGED TO HAVE BEEN MADE BY HUSSMANN REFRIGERATION. A DECISION IS REQUESTED AS TO WHETHER THE CONTRACT PROPERLY MAY BE CANCELLED AS RECOMMENDED BY THE CONTRACTING OFFICER. A CONTRACT WAS AWARDED ACCORDINGLY UNDER DATE OF SEPTEMBER 25. THE ABSTRACT OF BIDS SHOWS THAT THERE WERE SEVEN OTHER BIDDERS WHOSE BID PRICES RANGED FROM $1. THE CONTRACTOR ALLEGED THAT IT MADE A MISTAKE IN ITS BID AND FURNISHED EVIDENCE INDICATING THAT THE PRICES FOR COMPONENT PARTS AMOUNTING TO $620.35 WERE INADVERTENTLY OMITTED FROM ITS BID PRICE. IT IS THE RECOMMENDATION OF THE CONTRACTING OFFICER THAT HUSSMANN REFRIGERATION.

B-130402, JAN. 25, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 17, 1957, WITH ENCLOSURES, FROM THE CHIEF OF NAVAL MATERIAL, RELATING TO A MISTAKE IN BID ALLEGED TO HAVE BEEN MADE BY HUSSMANN REFRIGERATION, INC., ST. LOUIS, MISSOURI, IN CONNECTION WITH CONTRACT NO. N189 (216) 32910A, ENTERED INTO WITH THE NAVY PURCHASING OFFICE, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA. IN VIEW OF THE FACTS SET FORTH IN THE LETTER, A DECISION IS REQUESTED AS TO WHETHER THE CONTRACT PROPERLY MAY BE CANCELLED AS RECOMMENDED BY THE CONTRACTING OFFICER.

THE RECORD SHOWS THAT BY INVITATION NO. IFB-189-198-57, THE U.S. NAVY PURCHASING OFFICE, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, REQUESTED BIDS FOR FURNISHING ONE COOLER IN ACCORDANCE WITH SPECIFICATIONS SET OUT IN THE INVITATION. IN RESPONSE THERETO, HUSSMANN REFRIGERATION, INC., SUBMITTED A BID OF $1,347, AND BEING THE LOWEST BID RECEIVED, A CONTRACT WAS AWARDED ACCORDINGLY UNDER DATE OF SEPTEMBER 25, 1956. THE ABSTRACT OF BIDS SHOWS THAT THERE WERE SEVEN OTHER BIDDERS WHOSE BID PRICES RANGED FROM $1,744.44 TO $2,354.

IN LETTERS DATED OCTOBER 11 AND NOVEMBER 5, 1956, THE CONTRACTOR ALLEGED THAT IT MADE A MISTAKE IN ITS BID AND FURNISHED EVIDENCE INDICATING THAT THE PRICES FOR COMPONENT PARTS AMOUNTING TO $620.35 WERE INADVERTENTLY OMITTED FROM ITS BID PRICE. IT IS THE RECOMMENDATION OF THE CONTRACTING OFFICER THAT HUSSMANN REFRIGERATION, INC., BE RELIEVED OF THE OBLIGATION OF FURNISHING THE EQUIPMENT AT ITS BID PRICE AND THAT THE CONTRACT BE CANCELLED WITHOUT LIABILITY, IT BEING HIS OPINION THAT THE "BID WAS ERRONEOUS, THAT SUCH ERROR WAS OBVIOUS AND SHOULD HAVE BEEN APPARENT PRIOR TO AWARD.'

THE EVIDENCE PRESENTED APPEARS TO ESTABLISH THE EXISTENCE OF A BONA FIDE MISTAKE BY THE CONTRACTOR IN ITS BID SUBMITTED HEREIN. IN VIEW OF THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE NEXT HIGH BID, AND OF THE RANGE OF THE SEVEN OTHER BIDS, OUR OFFICE AGREES WITH THE OPINION OF THE CONTRACTING OFFICER THAT HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR AND THAT THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE BIDDER TO VERIFY ITS BID. ACCORDINGLY, THE CONTRACT IN THIS CASE SHOULD BE CANCELLED WITHOUT LIABILITY TO THE CONTRACTOR.

THE PAPERS TRANSMITTED WITH THE LETTER OF JANUARY 17, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORT AND RECOMMENDATION, ARE RETURNED HEREWITH.