B-130580, FEB. 14, 1957

B-130580: Feb 14, 1957

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

B-130580, FEB. 14, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 4, 1957, FROM YOUR DEPARTMENT, REFERENCE R-112 L4-1 L4/NU3-4, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY GENERAL SUPPLY COMPANY, INC., OF NORFOLK, VIRGINIA, TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. IFB 189 214-57, ISSUED BY THE UNITED STATES NAVY PURCHASING OFFICE, NAVAL SUPPLY CENTER, NORFOLK, VIRGINIA, FOR FURNISHING WOOD LADDERS DESCRIBED THEREIN.

THE INVITATION REQUESTED BIDS ON 80 SIX-FOOT LADDERS (ITEM NO. 1), 80 EIGHT-FOOT LADDERS (ITEM NO. 2) AND 80 TWELVE-FOOT LADDERS (ITEM NO. 3), ALL "TO BE IN ACCORDANCE WITH SPEC:FED. ILL-S-710 OF 9-27-54, TYPE 1.' IN RESPONSE TO THE INVITATION, BIDS WERE RECEIVED AS FOLLOWS:

TABLE

BIDDER ITEM 1 ITEM 2 ITEM 3 TOTAL AMOUNT 1. GENERAL SUPPLY CO. $ 7.17 $ 9.57 $15.77 $1,812.30 2. MARYLAND LUMBER CO. 9.89 13.19 20.89 2473.10 3. MICHIGAN LADDER CO. 10.88 14.34 21.96 2676.40 4. GRAYBAR ELECTRIC CO. 17.76 21.28 29.66 4013.00 5. GRIFFITH LADDER CO. 30.00 40.00 60.00 7400.00

THE GOVERNMENT ESTIMATED THE TOTAL COST TO BE $2,482 ($12.10, $11.80 AND .19 EACH UNDER ITEMS NOS. 1, 2 AND 3, RESPECTIVELY).

ON SEPTEMBER 10, 1956, AWARD WAS MADE TO GENERAL SUPPLY COMPANY, INC., AS LOW BIDDER (CONTRACT NO. N189-32603A). BY LETTER DATED OCTOBER 24, 1956, GENERAL SUPPLY COMPANY REQUESTED RELEASE FROM THE CONTRACT FOR THE REASON THAT ITS BID WAS BASED ON ERRONEOUS INFORMATION GIVEN BY THE SUPPLIER OF THE LADDERS INTENDED TO BE FURNISHED AND THAT THE LADDERS WOULD NOT MEET THE SPECIFICATIONS. SUBSEQUENTLY, THE CONTRACTOR STATED THAT THE QUOTATION WAS RECEIVED FROM THE SUPPLIER BY TELEPHONE AND ENCLOSED A LETTER FROM THE SUPPLIER (WATTERS AND MARTIN, NORFOLK, VIRGINIA), EXPRESSING REGRET THAT THE LADDERS WOULD NOT MEET THE SPECIFICATIONS. LETTER DATED DECEMBER 26, 1956, THE CONTRACTOR STATED THAT THE ACTUAL COST TO IT FOR LADDERS MEETING THE SPECIFICATIONS WOULD BE $10.75, $14.25 AND $24.50 EACH UNDER ITEMS NOS. 1, 2 AND 3, RESPECTIVELY, AND THAT, THEREFORE, IT WOULD SUFFER A LOSS EVEN IF THE CONTRACT PRICE WERE INCREASED TO THE AMOUNT OF THE NEXT LOW BID.

IN VIEW OF THE FACTS AS REPORTED AND SHOWN BY THE FILE, IT MAY BE REGARDED AS SATISFACTORILY ESTABLISHED THAT GENERAL SUPPLY COMPANY, INC., MADE A BONA FIDE ERROR IN ITS BID, AS ALLEGED AND EXPLAINED BY IT, IN THAT THE BID WAS BASED ON AN ERRONEOUS QUOTATION FROM ITS SUPPLIER COVERING LADDERS WHICH WOULD NOT COMPLY WITH THE SPECIFICATIONS. ALSO, BECAUSE OF THE DISPARITY BETWEEN ITS BID AND THE OTHER BIDS RECEIVED AND ESPECIALLY BECAUSE OF THE DIFFERENCE BETWEEN ITS BID AND THE GOVERNMENT'S ESTIMATE, THE CONTRACTING OFFICER, AS HE SUGGESTS, SHOULD HAVE REQUESTED VERIFICATION BEFORE MAKING THE AWARD. SINCE THERE IS NO BASIS FOR ASCERTAINING WHAT THE AMOUNT OF THE BID WOULD HAVE BEEN FOR LADDERS MEETING THE SPECIFICATIONS, THERE CAN BE NO CORRECTION OF THE BID AND CONTRACT. 17 COMP. GEN. 575. THEREFORE, THE CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY ON THE PART OF GENERAL SUPPLY COMPANY, INC.

THE PAPERS, EXCEPTING THE COPY OF CONTRACT, THE PHOTOSTATIC COPY OF BID AND THE STATEMENT OF THE FACTS AND RECOMMENDATIONS OF THE CONTRACTING OFFICER, ARE RETURNED HEREWITH.