B-131253, APR. 3, 1957

B-131253: Apr 3, 1957

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF MARCH 25. YOU STATE THAT WHEN THE BIDS WERE EXAMINED BY THE CONTRACTING OFFICER HE NOTED THAT THE BID OF THE AMSTAM SUPPLY DIVISION ON ITEM 5 WAS LESS THAN ONE-HALF THE AMOUNT BID BY THE OTHER BIDDERS ON THAT ITEM AND THAT BECAUSE OF SUCH DIFFERENCE. THE COMPANY WAS REQUESTED BY TELEPHONE TO VERIFY ITS BID ON ITEM 5. THAT IT WAS NOT UNTIL IT WAS REQUESTED TO VERIFY ITS BID THAT IT DISCOVERED THAT THE TANK WAS TO BE CONSTRUCTED OF COPPER SILICON ALLOY INSTEAD OF FLANGE QUALITY STEEL. ON WHICH ITS BID PRICE WAS BASED. THERE IS NO ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID AS ALLEGED. SINCE IT WAS BELIEVED THAT THE BID OF THE AMSTAN SUPPLY DIVISION WAS ERRONEOUS.

B-131253, APR. 3, 1957

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 25, 1957, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE AMSTAM SUPPLY DIVISION, RAPID CITY, SOUTH DAKOTA, ALLEGES IT MADE IN ITS BID OPENED ON FEBRUARY 19, 1957.

THE VETERANS ADMINISTRATION HOSPITAL, FORT MEADE, SOUTH DAKOTA, BY INVITATION NO. 57-49, REQUESTED BIDS FOR FURNISHING, AMONG OTHER ITEMS, ONE TANK, STORAGE, HORIZONTAL, 30 INCH DIAMETER BY 72 INCH LONG OVERALL, CONSTRUCTED OF COPPER SILICON ALLOY WELDED CONSTRUCTION, ITEM 5. RESPONSE THE AMSTAN SUPPLY DIVISION SUBMITTED A BID OFFERING TO FURNISH, AMONG OTHERS, THE TANK UNDER ITEM 5 AT A PRICE OF $314. THE TWO OTHER BIDDERS ON ITEM 5 QUOTED PRICES OF $757 AND $992.50.

YOU STATE THAT WHEN THE BIDS WERE EXAMINED BY THE CONTRACTING OFFICER HE NOTED THAT THE BID OF THE AMSTAM SUPPLY DIVISION ON ITEM 5 WAS LESS THAN ONE-HALF THE AMOUNT BID BY THE OTHER BIDDERS ON THAT ITEM AND THAT BECAUSE OF SUCH DIFFERENCE, THE COMPANY WAS REQUESTED BY TELEPHONE TO VERIFY ITS BID ON ITEM 5.

BY LETTER DATED FEBRUARY 25, 1957, THE AMSTAN SUPPLY DIVISION ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM 5 AND THAT IT WISHED TO WITHDRAW ITS BID ON THAT ITEM. IN A LETTER DATED MARCH 6, 1957, THE COMPANY STATED THAT IN COMPUTING ITS BID PRICE FOR ITEM 5, IT USED THE PRICE LIST OF ITS SUPPLIER, MINNEAPOLIS TANK AND MANUFACTURING COMPANY, AND THAT IT ERRONEOUSLY ASSUMED THAT THE PRICE LIST COVERED THE TYPE OF TANK REQUIRED BY THE SPECIFICATIONS; THAT IT WAS NOT UNTIL IT WAS REQUESTED TO VERIFY ITS BID THAT IT DISCOVERED THAT THE TANK WAS TO BE CONSTRUCTED OF COPPER SILICON ALLOY INSTEAD OF FLANGE QUALITY STEEL, ON WHICH ITS BID PRICE WAS BASED; AND THAT ITS SUPPLIER DOES NOT MANUFACTURE TANKS CONSTRUCTED OF THE SPECIAL ALLOY. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ORIGINAL WORKSHEET AND A COPY OF THE REFERRED-TO PRICE LIST WHICH, IT APPEARS, COVERS TANKS CONSTRUCTED OFFLANGE QUALITY STEEL.

ON THE RECORD, THERE IS NO ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID AS ALLEGED. ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID OF THE AMSTAN SUPPLY DIVISION WAS ERRONEOUS, AND SUCH BELIEF WAS CONFIRMED AND THE ERROR WAS EXPLAINED BY THE BIDDER PRIOR TO AWARD, THE BID OF THE COMPANY AS TO ITEM 5 MAY BE DISREGARDED IN MAKING THE AWARD.