B-131017, APR. 1, 1957

B-131017: Apr 1, 1957

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TO THE SECRETARY OF THE ARMY: THIS IS IN REPLY TO THE LETTER OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS). THE RECORD SHOWS THAT A REQUEST FOR QUOTATIONS WAS ISSUED BY HEADQUARTERS. THE CLAIMANT WAS THE LOW BIDDER AS TO BOTH ITEMS. THE ONLY OTHER QUOTATION WAS $148 PER UNIT FOR THE IMPELLERS AND $20.40 PER UNIT FOR THE CASE WEARING RINGS. THE OTHER QUOTATION WAS EXACTLY DOUBLE THE PRICE FOR EACH OF THE SAID ITEMS. AWARD WAS MADE TO THE CLAIMANT ON OCTOBER 23. DELIVERY OF THE SAME WAS DULY MADE ON DECEMBER 4. THE CLAIMANT ADVISED THE CONTRACTING OFFICER BY LETTER THAT A MISTAKE HAD BEEN MADE IN ITS PRICE QUOTATIONS AND THAT THE UNIT PRICE FOR THE SAID IMPELLERS SHOULD HAVE BEEN QUOTED AT $111 INSTEAD OF $74.

B-131017, APR. 1, 1957

TO THE SECRETARY OF THE ARMY:

THIS IS IN REPLY TO THE LETTER OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), DATED MARCH 7, 1957, RELATING TO THE CLAIM OF TATE ENGINEERING AND SUPPLY COMPANY, INC. FOR A PRICE INCREASE ON PURCHASE ORDER NO. FD 7-404-2247, DATED OCTOBER 23, 1956.

THE RECORD SHOWS THAT A REQUEST FOR QUOTATIONS WAS ISSUED BY HEADQUARTERS, FORT DETRICK, FREDERICK, MARYLAND, ON AUGUST 21, 1956, FOR THE PROCUREMENT OF CERTAIN PARTS FOR A PEERLESS BOILER FEED PUMP, DESCRIBED AS FOLLOWS: (1) IMPELLER, PART NO. 36; TWO EACH, AND (2) CASE WEARING RING, PART NO. 57; TWO EACH. THE CLAIMANT WAS THE LOW BIDDER AS TO BOTH ITEMS, QUOTING PRICES OF $74 EACH FOR THE IMPELLERS (PART NO. 36), AND $10.20 EACH FOR THE TWO CASE WEARING RINGS (PART NO. 57). THE ONLY OTHER QUOTATION WAS $148 PER UNIT FOR THE IMPELLERS AND $20.40 PER UNIT FOR THE CASE WEARING RINGS. IN OTHER WORDS, THE OTHER QUOTATION WAS EXACTLY DOUBLE THE PRICE FOR EACH OF THE SAID ITEMS. IN VIEW OF THIS FACT, THE CONTRACTING OFFICER REQUESTED CONFIRMATION OF THE LOW QUOTATION, AND THE TATE COMPANY THEREUPON CONFIRMED ITS ORIGINAL QUOTATION. AWARD WAS MADE TO THE CLAIMANT ON OCTOBER 23, 1956, FOR BOTH ITEMS AT THE QUOTED PRICE OF $168.40, AND DELIVERY OF THE SAME WAS DULY MADE ON DECEMBER 4, 1956. FIFTEEN DAYS AFTER DELIVERY, THE CLAIMANT ADVISED THE CONTRACTING OFFICER BY LETTER THAT A MISTAKE HAD BEEN MADE IN ITS PRICE QUOTATIONS AND THAT THE UNIT PRICE FOR THE SAID IMPELLERS SHOULD HAVE BEEN QUOTED AT $111 INSTEAD OF $74, AND THAT THE UNIT PRICE FOR THE CASE WEARING RINGS SHOULD HAVE BEEN QUOTED AT $15.30 INSTEAD OF $10.20, AND THEREFORE REQUESTED A PRICE ADJUSTMENT. THE COMPANY EXPLAINED THE ERROR BY SUBMITTING A STATEMENT SUPPORTED BY A DISCOUNT SHEET OF ITS SUPPLIER, A PRICE SCHEDULE OF ITS SUPPLIERS, AND AN INVOICE OF ITS SUPPLIER FOR THE ITEMS INVOLVED. THE CONTRACTOR EXPLAINED THAT THE MISTAKE RESULTED FROM ITS ERRONEOUS USE OF THE SUPPLIER'S 50 PERCENT DISCOUNT APPLICABLE TO COMPLETE PARTS, RATHER THAN THE 25 PERCENT DISCOUNT ALLOWED ON SPARE PARTS. THE SUPPLIER'S PRICE SCHEDULE AND DISCOUNT SHEET CONFIRM THE CONTRACTOR'S STATEMENT. IT IS ALSO SHOWN THAT THE TOTAL COST TO THE CLAIMANT WAS $206.70 FOR THE SUPPLIES FURNISHED TO THE GOVERNMENT FOR $168.40. THE RECORD SHOWS THAT HAD THE CLAIMANT QUOTED THE PRICE OF $111 PER UNIT FOR ITEM 1 OF THE PURCHASE ORDER AND $15.30 PER UNIT FOR ITEM 2, THE QUOTATION WOULD HAVE BEEN CONSIDERABLY LOWER THAN THE ONLY OTHER QUOTATION SUBMITTED.

FROM THE RECORD IT IS APPARENT THAT THE CONTRACTOR'S BID DATED SEPTEMBER 19, 1956, WAS EXACTLY AS IT INTENDED, AND THAT WHEN IT VERIFIED THE BID BY ITS LETTER OF OCTOBER 23, 1956, IT STILL BELIEVED THAT THE PRICES QUOTED WERE CORRECT.

SINCE THE REQUEST FOR VERIFICATION AFFORDED THE BIDDER EVERY OPPORTUNITY TO RECHECK ITS QUOTATION, AND SINCE IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER IS PROPERLY CHARGEABLE WITH NOTICE OF ANY MISTAKE, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE CONFIRMED BID PRICES CONSUMMATED A VALID AND BINDING OBLIGATION WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES, AND NEITHER OUR OFFICE NOR ANY OTHER OFFICER OF THE GOVERNMENT CAN GIVE AWAY THE RIGHTS WHICH VEST IN THE GOVERNMENT UNDER SUCH A CONTRACT.