B-130458, JUN. 10, 1957

B-130458: Jun 10, 1957

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTERS DATED MARCH 19 AND MAY 17. ALLEGES IT MADE IN ITS ORAL BIDS ON WHICH PURCHASE ORDERS NOS. (39-603) 57-3074 AND (39-603) 57-3587 ARE BASED. ORAL QUOTATIONS WERE SOLICITED BY THE ROBINS AIR FORCE BASE. WHICH WERE IDENTIFIED AS PART NOS. DELIVERY OF WHICH WAS TO BE EFFECTED AS SOON AS POSSIBLE. ORALLY QUOTED A PRICE WHICH WAS RECORDED BY THE SOLICITING OFFICER AS $0.04 EACH FOR THE BOLTS IDENTIFIED AS PART NOS. WAS ISSUED TO AIR ASSOCIATES. ORAL QUOTATIONS WERE SOLICITED BY THE ROBINS AIR FORCE BASE FOR FURNISHING CERTAIN TOOL ITEMS. WHICH WERE TO BE DELIVERED AS SOON AS POSSIBLE. WAS ISSUED TO AIR ASSOCIATES. WAS THEN IN EFFECT.

B-130458, JUN. 10, 1957

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTERS DATED MARCH 19 AND MAY 17, 1957, FROM THE OFFICE OF THE CHIEF, ADJUDICATIONS BRANCH, SETTLEMENTS DIVISION, AIR FORCE FINANCE CENTER, FURNISHING THE REPORTS REQUESTED BY OUR OFFICE RELATIVE TO ERRORS WHICH AIR ASSOCIATES, INC., ATLANTA MUNICIPAL AIRPORT, ATLANTA, GEORGIA, ALLEGES IT MADE IN ITS ORAL BIDS ON WHICH PURCHASE ORDERS NOS. (39-603) 57-3074 AND (39-603) 57-3587 ARE BASED.

IT APPEARS FROM THE RECORD THAT ON NOVEMBER 16, 1956, ORAL QUOTATIONS WERE SOLICITED BY THE ROBINS AIR FORCE BASE, GEORGIA, FOR FURNISHING, AMONG OTHER ITEMS, THREE TYPES AND SIZES OF BOLTS, WHICH WERE IDENTIFIED AS PART NOS. NAS-464P4-23, NAS-464P4-25, AND NAS-464P4 19, DELIVERY OF WHICH WAS TO BE EFFECTED AS SOON AS POSSIBLE, BUT NOT LATER THAN MARCH 15, 1957; THAT AIR ASSOCIATES, INC., ORALLY QUOTED A PRICE WHICH WAS RECORDED BY THE SOLICITING OFFICER AS $0.04 EACH FOR THE BOLTS IDENTIFIED AS PART NOS. NAS-464P4-23, NAS-464P4-25 AND NAS 464P4-19, AND THAT ON THE SAME BOLTS, ANOTHER COMPANY QUOTED PRICES RANGING FROM $21.70 PER HUNDRED TO $23.70 PER HUNDRED. ON NOVEMBER 30, 1956, PURCHASE ORDER NO. (09-603) 57- 3074, COVERING THE REFERRED TO THREE ITEMS OF BOLTS AT FOUR CENTS EACH, AND TWO OTHER ITEMS, WAS ISSUED TO AIR ASSOCIATES, INC.

THE RECORD ALSO INDICATES THAT ON DECEMBER 26, 1956, ORAL QUOTATIONS WERE SOLICITED BY THE ROBINS AIR FORCE BASE FOR FURNISHING CERTAIN TOOL ITEMS, WHICH WERE TO BE DELIVERED AS SOON AS POSSIBLE, BUT NOT LATER THAN FEBRUARY 16, 1957; THAT AIR ASSOCIATES, INC., ORALLY QUOTED A PRICE OF $3.15 EACH FOR FURNISHING 36 NO. M-678-12 BG GAGE CAP SETTING TOOLS AND THAT ON THE SAME ITEM ANOTHER COMPANY QUOTED A PRICE OF $3.95 EACH; AND THAT ON THE SAME DAY PURCHASE ORDER NO. (09-603) 57 3587, COVERING 36 NO. M-678 BG GAGE CAP SETTING TOOLS, WAS ISSUED TO AIR ASSOCIATES, INC.

BY LETTERS DATED JANUARY 14, 1957, TO OUR OFFICE, AIR ASSOCIATES, INC., REQUESTED THAT PURCHASE ORDERS NOS. (09-603) 57-3074 AND (09 603) 57-3587 BE CANCELED OR CHANGED TO PROVIDE FOR A PRICE OF $0.40 EACH INSTEAD OF $0.04 EACH FOR THE BOLTS CALLED FOR UNDER ITEMS 1, 2 AND 4 OF THE FORMER ORDER, AND TO PROVIDE FOR A PRICE OF $5 EACH INSTEAD OF $3.15 EACH FOR THE GAGE CAP SETTING TOOL CALLED FOR IN THE LATTER PURCHASE ORDER--- THE BASES THEREFOR BEING THAT IN CONNECTION WITH THE BOLTS THERE APPARENTLY HAD BEEN A TRANSPOSITION IN THE FIGURES, SINCE ITS INTENDED QUOTATION HAD BEEN $0.40 RATHER THAN $0.04, AND THAT IN QUOTING ON THE GAGE CAP SETTING TOOL, IT INADVERTENTLY USED ITS SUPPLIER'S OLD PRICE LIST INSTEAD OF THE NEW PRICE LIST WHICH, IT STATED, WAS THEN IN EFFECT. IN SUPPORT OF ITS ALLEGATION OF ERROR ON THE BOLTS, THE CORPORATION, BY LETTER DATED FEBRUARY 15, 1957, SUBMITTED ITS ORIGINAL ESTIMATE SHEET AND COPIES OF QUOTATIONS RECEIVED FROM TWO SUPPLIERS, WHICH SHOW THAT THE CORPORATION WAS QUOTED PRICES RANGING FROM $18.64 PER HUNDRED TO $26.13 PER HUNDRED FOR THE REQUIRED BOLTS. BY ANOTHER LETTER OF THE SAME DATE, THE CORPORATION SUBMITTED COPIES OF ITS SUPPLIER'S OLD AND NEW PRICE LISTS ON THE GAGE CAP SETTING TOOL, WHICH SHOW THAT THE DEALER'S PRICE FOR SUCH ITEM WAS INCREASED FROM $3.15 EACH--- THE PRICE ORALLY QUOTED BY THE CORPORATION ON DECEMBER 26, 1956--- TO $4.50 EACH. IT IS NOTED, HOWEVER, THAT THE NEW PRICE LIST BEARS THE DATE "1/1/57," WHICH IS SUBSEQUENT TO THE DATE ON WHICH THE CORPORATION SUBMITTED ITS ORAL QUOTATION ON THE TOOL.

IT IS REPORTED THAT AIR ASSOCIATES, INC., COMPLETED DELIVERY OF THE GAGE CAP SETTING TOOLS CALLED FOR UNDER PURCHASE ORDER NO. (09-603) 57 3587 ON JANUARY 17, 1957; AND THAT WHILE DELIVERY OF THE BOLTS AND NUTS CALLED FOR UNDER PURCHASE ORDER NO. (09-603) 57-3074 WAS REQUIRED TO BE MADE BY MARCH 15, 1957, THE CORPORATION HAS MADE NO ATTEMPT TO DELIVER SUCH MATERIAL.

THE ISSUANCE OF PURCHASE ORDERS BY THE GOVERNMENT ON FORMS SUCH AS THOSE USED IN THESE INSTANCES, WHICH CONTAIN A FULL PAGE OF DETAILED TERMS AND CONDITIONS, MAY NOT BE REGARDED AS CONSTITUTING BINDING ACCEPTANCES OF VERBAL QUOTATIONS RESTRICTED SOLELY TO PRICES. EACH ORAL QUOTATION MUST BE REGARDED AS A PRELIMINARY NEGOTIATION AND EACH PURCHASE ORDER AS AN OFFER TO BUY ON THE TERMS SET FORTH IN SUCH ORDER, WHICH DOES NOT BIND THE SELLER UNTIL HE HAS MANIFESTED AN AN ACCEPTANCE, BY DELIVERY OF THE GOODS OR OTHERWISE. SINCE AIR ASSOCIATES, INC., HAS REFUSED TO DELIVER THE MATERIAL COVERED BY PURCHASE ORDER NO. (09-603) 57-3074, NO CONTRACT AS TO SUCH ITEMS HAS BEEN CONSUMMATED. AS TO PURCHASE ORDER NO. (09-603) 57- 3587, SINCE THE CORPORATION DELIVERED THE MATERIAL CALLED FOR IN SUCH ORDER, IT IS BOUND BY THE TERMS OF THE ORDER. SINCE THE ERROR ALLEGED BY THE CORPORATION WAS A UNILATERAL--- NOT MUTUAL--- MISTAKE AND SINCE THE CONTRACT COVERING THE PURCHASE OF THE GAGE CAP SETTING TOOLS DOES NOT APPEAR TO BE UNCONSCIONABLE, THERE APPEARS TO BE NO LEGAL BASIS FOR MODIFYING THE PRICE SPECIFIED IN PURCHASE ORDER NO. (09-603) 57-3587.