B-130995, APR. 10, 1957

B-130995, APR. 10, 1957

TO PURITY STORES, LTD.:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 18, 1957, REQUESTING RECONSIDERATION OF SETTLEMENT DATED FEBRUARY 11, 1957, BY WHICH THE CLAIMS DIVISION OF OUR OFFICE DISALLOWED YOUR CLAIM FOR $546.72, REPRESENTING A LOSS ALLEGED TO HAVE BEEN SUSTAINED BY YOU IN THE PERFORMANCE OF CONTRACT NO. DA-04-505-QM-20123, DATED JANUARY 16, 1956, WITH THE DEPARTMENT OF THE ARMY.

IT APPEARS FROM THE RECORD THAT BY NOTICE OF INTENT TO PURCHASE NO. 1065- 56, ISSUED BY THE HEADQUARTERS, OAKLAND QUARTERMASTER MARKET CENTER, OFFERS WERE REQUESTED FROM THE TRADE FOR FURNISHING 624 DOZEN CANS OF HOMINY TO CONFORM TO FEDERAL SPECIFICATIONS N-H-541A DATED MAY 12, 1955, IT BEING REQUESTED THAT QUOTATIONS BE SUBMITTED EITHER ON THE BASIS OF F.O.B. DESTINATION OR F.O.B. ORIGIN. THE DESTINATION WAS SHOWN AS THE FREIGHT TERMINAL OFFICER, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA.

THREE BIDS WERE RECEIVED FOR DELIVERY AT ORIGIN IN THE AMOUNTS OF $4.074 (YOUR BID), $4.50, AND $5.39 PER DOZEN CANS. FIVE BIDS WERE RECEIVED FOR DELIVERY AT DESTINATION IN THE AMOUNTS OF $4.5312, $4.578, $4.62, $5.456 (YOUR BID), AND $5.815 PER DOZEN CANS, LESS CERTAIN DISCOUNTS, THE LOWEST BID FOR DELIVERY AT DESTINATION HAVING BEEN MADE BY THE J. L. HENDERSON COMPANY, SANTA CLARA, CALIFORNIA. UNDER DATE OF JANUARY 16, 1956, YOU WERE AWARDED THE CONTRACT AT YOUR BID PRICE OF $4.074 PER DOZEN CANS F.O.B. ORIGIN, GLENDALE, CALIFORNIA. ON OR ABOUT MARCH 6, 1956, YOU MADE DELIVERY TO THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, OF THE SUPPLIES CALLED FOR BY THE CONTRACT, PAYMENT BEING MADE THEREFOR UNDER DATE OF MAY 11, 1956.

BY LETTER OF MARCH 19, 1956--- SUBSEQUENT TO SHIPMENT--- YOU ALLEGED THAT A TYPOGRAPHICAL ERROR HAD BEEN MADE IN YOUR QUOTATION, IT BEING STATED THAT YOUR BID SHOULD HAVE BEEN $5.074 PER DOZEN CANS F.O.B. ORIGIN INSTEAD OF $4.074 PER DOZEN. YOU SUBMITTED A CLAIM IN THE AMOUNT OF $546.72 REPRESENTING YOUR ALLEGED LOSS OCCASIONED BY THE ERROR, AND YOU FURNISHED A COPY OF YOUR SUPPLIER'S INVOICE INDICATING THAT YOU PAID THE NET AMOUNT OF $3,069.83 FOR THE SUPPLIES WHICH YOU FURNISHED THE GOVERNMENT AT A COST OF $2,523.11.

THE SUCCESSOR CONTRACTING OFFICER REPORTS THAT THE FREIGHT RATE FROM GLENDALE TO OAKLAND IS $0.38 PER CWT.; OR, IN TERMS OF A QUANTITY OFFERED, A FACTOR OF $0.357 PER DOZEN CANS. THE FREIGHT RATES FROM SANTA CLARA TO OAKLAND IS REPORTED TO BE $0.12 PER CWT., OR, IN THE TERMS OF THE QUANTITY OFFERED, A FACTOR OF $0.113 PER DOZEN. CONVERTING THE F.O.B. DESTINATION PRICES OF THE CALIFORNIA VENDORS TO F.O.B. ORIGIN PRICES RESULTS IN THE FOLLOWING PRICES ON A COMPARATIVE BASIS:

CHART

YOUR BID $4.074

HENDERSON BID 4.4182

NEXT BIDDER 4.465

NEXT BIDDER 4.50

NEXT BIDDER 5.39

FROM A COMPARISON OF THE ABOVE BIDS IT APPEARS THAT YOUR BID WAS SOMEWHAT OUT OF LINE WITH THE ACTUAL OR PROJECTED ORIGIN PRICES RECEIVED FROM THE OTHER BIDDERS. FURTHERMORE, YOUR BID CONTAINED A DIFFERENTIAL OF $1.382 PER DOZEN CANS ON ACCOUNT OF FREIGHT RATES WHEREAS SUCH RATES WERE KNOWN TO THE PURCHASING OFFICE TO BE ONLY $0.357 PER DOZEN. IT IS THE VIEW OF THE SUCCESSOR CONTRACTING OFFICER -- IN WHICH WE CONCUR--- THAT THE FOREGOING FACTS WERE SUCH AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF PROBABLE ERROR, THUS REQUIRING VERIFICATION BEFORE AWARD.

THE SUCCESSOR CONTRACTING OFFICER RECOMMENDED THAT YOU BE REIMBURSED TO THE EXTENT THE GOVERNMENT PROFITED BY YOUR MISTAKE. THE TOTAL COST TO THE GOVERNMENT OF PROCURING THE SUPPLIES FROM YOUR CONCERN WAS $2,746, CONSISTING OF THE SUM OF $2,523.11 PAID TO YOU ON MAY 11, 1956, PLUS THE SUM OF $222.89 EXPENDED BY THE GOVERNMENT FOR TRANSPORTING THE SUPPLIES FROM GLENDALE TO OAKLAND UNDER A GOVERNMENT BILL OF LADING. THE SUPPLIES COULD HAVE BEEN PROCURED FROM THE J. L. HENDERSON COMPANY, FREIGHT PREPAID, AT A TOTAL COST OF $2,799.20, CONSIDERING THE PROMPT PAYMENT DISCOUNT OFFERED BY THAT VENDOR, AND THUS IT APPEARS THAT THE EXTENT TO WHICH THE GOVERNMENT PROFITED THROUGH YOUR ERROR AMOUNTS TO THE SUM OF $53.20.

UPON RECEIPT OF ADVICE FROM YOU INDICATING YOUR WILLINGNESS TO ACCEPT THE SUM OF $53.20 IN SETTLEMENT OF YOUR CLAIM, APPROPRIATE ACTION WILL BE TAKEN IN THE MATTER.