B-130628, FEB. 18, 1957

B-130628: Feb 18, 1957

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TO THE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 6. ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. 12-10-001-192 WAS AWARDED. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 15 TO 32. WE HAVE BEEN WORKING UNDER PRESSURE DURING THE LAST 30 DAYS BECAUSE OF ILLNESSES AND FOLKS IN THE HOSPITAL. THE BID WAS PRICED LATE FRIDAY. WE ARE SURE THAT THE BID WAS PINNED IN THE UPPER LEFT HAND CORNER AND IN PRICING THE VARIOUS ITEMS. WE PRICED THEM ALL ON THE BASIS OF SERICEA LESPEDEZA AND DID NOT TAKE IN THE FACT THAT ITEMS 15 TO 32 WERE FOR HULLED BERMUDA GRASS. "IF YOU WILL REVIEW OUR PRICES TO THE VARIOUS DESTINATIONS. YOU WILL FIND THAT WE USED THE PRICE OF 25 CENTS ALL THROUGH THE BID ON QUANTITIES OF LESS THAN 2.

B-130628, FEB. 18, 1957

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 6, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR THE BELT SEED COMPANY, INC., ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. 12-10-001-192 WAS AWARDED.

THE SOIL CONSERVATION SERVICE, JACKSON, MISSISSIPPI, BY INVITATION NO. SCS-525-MS-57, REQUESTED BIDS--- TO BE OPENED DECEMBER 31, 1956--- FOR FURNISHING VARIOUS QUANTITIES OF SERICEA LESPEDEZA SEED, ITEMS 1 TO 14, INCLUSIVE, AND HULLED BERMUDA SEED, ITEMS 15 TO 32, INCLUSIVE, FOR DELIVERY TO DIFFERENT DESTINATIONS IN THE STATE OF MISSISSIPPI. RESPONSE THE BELT SEED COMPANY, INC., SUBMITTED AN UNDATED BID OFFERING TO DELIVER, WITH THE EXCEPTION OF ITEM 14 FOR WHICH IT QUOTED A PRICE OF $0.30 PER POUND, THE SERICEA LESPEDEZA SEED REQUIRED UNDER THE OTHER ITEMS AT A PRICE OF $0.25 AND $0.35 PER POUND AND TO DELIVER THE HULLED BERMUDA SEED UNDER ITEMS 15 TO 32, INCLUSIVE, AT THE SAME PRICES OF $0.25 AND $0.35 PER POUND. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 15 TO 32, INCLUSIVE, ON JANUARY 4, 1957.

BY LETTER DATED JANUARY 9, 1957, THE BELT SEED COMPANY, INC., ADVISED AS FOLLOWS:

"WE ACKNOWLEDGE RECEIPT OF YOUR TELEGRAM AS FOLLOWS---

"YOUR BID INVITATION SCS-525-MS-57 ACCEPTED TODAY AS TO ITEMS 15 TO 32 INCLUSIVE FOR TOTAL $9500.00 PURCHASE ORDER FOLLOWS"

"THE WRITER HAS BEEN OUT OF THE CITY AND JUST DISCOVERED ON HIS RETURN TODAY THAT WE HAD MADE AN ERROR. WE HAVE BEEN WORKING UNDER PRESSURE DURING THE LAST 30 DAYS BECAUSE OF ILLNESSES AND FOLKS IN THE HOSPITAL. THE BID WAS PRICED LATE FRIDAY, DECEMBER 28TH AND IN RE ENACTING WHAT HAPPENED, WE ARE SURE THAT THE BID WAS PINNED IN THE UPPER LEFT HAND CORNER AND IN PRICING THE VARIOUS ITEMS, WE PRICED THEM ALL ON THE BASIS OF SERICEA LESPEDEZA AND DID NOT TAKE IN THE FACT THAT ITEMS 15 TO 32 WERE FOR HULLED BERMUDA GRASS.

"IF YOU WILL REVIEW OUR PRICES TO THE VARIOUS DESTINATIONS, YOU WILL FIND THAT WE USED THE PRICE OF 25 CENTS ALL THROUGH THE BID ON QUANTITIES OF LESS THAN 2,000 LBS. AND ON THOSE QUANTITIES ABOVE THIS AMOUNT 35 CENTS PER LB. THERE IS NO DIFFERENCE IN PRICE BETWEEN THE ITEMS OF 1 TO 15, EXCEPT ON A QUANTITY BASIS, THAN THERE IS BETWEEN ITEMS 15 AND 32.

"WE ALSO FEEL CERTAIN THAT IF YOU WILL AGAIN REVIEW THE PRICES, WHICH YOU RECEIVED ON THE HULLED BERMUDA GRASS, YOU WILL FIND THAT THE PRICES WHICH WE INSERTED IN ERROR ARE MUCH BELOW THOSE OFFERED BY ANY OTHER SEEDSMAN. IT HAS NEVER BEEN POSSIBLE TO BUY HULLED BERMUDA DURING THE PAST YEAR UNDER 35 1/2 CENT PER POUND IN QUANTITIES OF 300 BAGS OR MORE, F.O.B. WEST COAST SHIPPING POINTS.

"WE HAVE NO WAY OF FILLING THE ORDER FOR BERMUDA GRASS, WHICH WE REGRET VERY MUCH, AND WOULD APPRECIATE IT IF YOU WILL CANCEL THE AWARD.'

ON THE LAST PAGE OF SUCH LETTER APPEARS A PENCIL NOTATION MADE BY THE CONTRACTING OFFICER TO THE EFFECT THAT THE WRITER OF SUCH LETTER INFORMED HIM BY TELEPHONE ON JANUARY 11, 1957, THAT THE CORPORATION WOULD NOT MAKE DELIVERY OF THE HULLED BERMUDA SEED REQUIRED UNDER ITEMS 15 TO 32, INCLUSIVE. IN A CONFIRMING LETTER DATED JANUARY 11, 1957, THE CORPORATION STATED THAT IT WAS IMPOSSIBLE FOR IT TO PERFORM UNDER THE CONTRACT AND THAT IT WOULD APPRECIATE CANCELLATION OF SUCH CONTRACT.

BY LETTER DATED JANUARY 14, 1957, THE DIRECTOR, ADMINISTRATIVE SERVICES DIVISION, SOIL CONSERVATION SERVICE, WASHINGTON, D.C., ADVISED THE CORPORATION THAT PURSUANT TO CLAUSE 11 OF THE CONTRACT ITS RIGHT TO PROCEED WITH THE PERFORMANCE OF THE CONTRACT WAS TERMINATED AND THAT ITS REQUEST FOR RELIEF WAS BEING REFERRED TO THE COMPTROLLER GENERAL OF THE UNITED STATES FOR DECISION. SUBSEQUENTLY REPLACEMENT CONTRACTS FOR THE SAME HULLED SEED WERE ENTERED INTO WITH THE SECOND LOWEST BIDDERS AT AN EXCESS COST TO THE GOVERNMENT OF $2,173.78.

THE BID OF THE BELT SEED COMPANY, INC., CONTAINED ON ITS FACE IDENTICAL PRICES OF $0.25 AND $0.35 PER POUND BOTH FOR THE SERICEA LESPEDEZA SEED REQUIRED UNDER ITEMS 1 TO 13, INCLUSIVE, AND FOR THE HULLED BERMUDA SEED REQUIRED UNDER ITEMS 15 TO 32, INCLUSIVE. IT SEEMS EXTREMELY IMPROBABLE THAT THE CORPORATION INTENDED TO QUOTE IDENTICAL PRICES FOR THE SERICEA LESPEDEZA SEED REQUIRED UNDER ITEMS 1 TO 13, INCLUSIVE, AND THE HULLED BERMUDA SEED REQUIRED UNDER ITEMS 15 TO 32, INCLUSIVE, SINCE THE SEED REQUIRED UNDER ITEMS 15 TO 32, INCLUSIVE, APPEARS TO BE A MORE EXPENSIVE ITEM THAN THE SEED REQUIRED UNDER ITEMS 1 TO 13, INCLUSIVE. IT IS NOTED THAT EACH OF THE BIDDERS WHO QUOTED ON BOTH THE SERICEA LESPEDEZA SEED AND THE HULLED BERMUDA SEED QUOTED A PRICE FOR THE HULLED BERMUDA SEED WHICH IS APPROXIMATELY TWICE THE PRICE QUOTED BY EACH OF THEM FOR THE SERICEA LESPEDEZA SEED. IN VIEW THEREOF, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID OF $0.25 AND $0.35 PER POUND FOR ITEMS 15 TO 32, INCLUSIVE, AND CONSEQUENTLY THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE CORPORATION TO VERIFY ITS BID.

IN THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE CONTRACT WAS NOT LEGALLY ENFORCEABLE. IT FOLLOWS THAT THE INDEBTEDNESS FOR EXCESS COSTS STATED AGAINST THE BELT SEED COMPANY, INC., SHOULD BE CANCELLED, AS ADMINISTRATIVELY RECOMMENDED.