B-132502, JUL. 23, 1957

B-132502: Jul 23, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JULY 10. ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. DA-11-021-401-CML-334 WAS AWARDED. MARYLAND ?044 $176.00 IT IS REPORTED THAT SINCE THE BID OF THE CRESCENT RUBBER PRODUCTS COMPANY WAS THE ONLY BID RECEIVED IN RESPONSE TO THE INVITATION. THE COMPANY WAS REQUESTED TO VERIFY ITS BID BY TELEGRAM OF FEBRUARY 16. THE BID OF THE COMPANY WAS ACCEPTED ON FEBRUARY 24. THE COMPANY ADVISED THAT ITS BID PRICE OF $0.044 EACH WAS ERRONEOUS IN THAT IT WAS BASED ON USING GRADE SB-405 RUBBER AT A COST OF $0.65 PER POUND RATHER THAN ON USING GRADE SA-405 RUBBER. THAT IT DID NOT REALIZE THAT THE MATERIAL INVOLVED WAS A SPECIAL THIOKOL RUBBER.

B-132502, JUL. 23, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JULY 10, 1957, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE CRESCENT RUBBER PRODUCTS COMPANY, BROOKLYN, NEW YORK, ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. DA-11-021-401-CML-334 WAS AWARDED.

THE CHICAGO CHEMICAL PROCUREMENT DISTRICT, CHICAGO, ILLINOIS, REQUESTED BIDS FOR FURNISHING 4,000 GASKETS TO BE MANUFACTURED IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS. IN RESPONSE THE CRESCENT RUBBER PRODUCTS COMPANY, A DEALER, SUBMITTED A BID DATED FEBRUARY 14, 1956, IN PART AS FOLLOWS:

CHART ITEM NO. DESCRIPTION QUANTITY UNIT PRICE AMOUNT 1 GASKET, WASHER, CUP, 4,000 EA.

CONFORMING TO DRAWING

A5-19-672, DATED 9

NOVEMBER 1953, AND TYPE

S, CLASS SA, GRADE SA-405,

AND COMPRESSION SET, TABLE

III, OF SPECIFICATION

MIL-R-003065A, DATED

3 APRIL 1953.

F.O.B. RECEIVING DOCK,

ARMY CHEMICAL CENTER, MARYLAND ?044 $176.00

IT IS REPORTED THAT SINCE THE BID OF THE CRESCENT RUBBER PRODUCTS COMPANY WAS THE ONLY BID RECEIVED IN RESPONSE TO THE INVITATION, THE COMPANY WAS REQUESTED TO VERIFY ITS BID BY TELEGRAM OF FEBRUARY 16, 1956, READING IN PART AS FOLLOWS: "REQUEST CONFIRMATION OF YOUR BID OF 4000 EACH GASKET, WASHER, CUP, INVITATION FOR BID NO. CML-11-021-56 17.' IN RESPONSE TO SUCH REQUEST, THE COMPANY ADVISED BY LETTER OF FEBRUARY 16, 1956, AS FOLLOWS: "WE CONFIRM PRICE AS SHOWN ON BID FORMS OF SUBJECT INVITATION FOR BID.' THE BID OF THE COMPANY WAS ACCEPTED ON FEBRUARY 24, 1956.

BY LETTER DATED MAY 2, 1956, THE COMPANY ADVISED THAT ITS BID PRICE OF $0.044 EACH WAS ERRONEOUS IN THAT IT WAS BASED ON USING GRADE SB-405 RUBBER AT A COST OF $0.65 PER POUND RATHER THAN ON USING GRADE SA-405 RUBBER, WHICH, IT STATED, WOULD COST $6 PER POUND; THAT IT DID NOT REALIZE THAT THE MATERIAL INVOLVED WAS A SPECIAL THIOKOL RUBBER; THAT EITHER MATERIAL, SA-405 OR SB-405, WAS IMMEDIATELY AVAILABLE IN SHEETS AND COULD BE STAMPED INTO WASHERS IN A FEW DAYS; AND THAT THE COMPANY WAS UNABLE TO ABSORB THIS "FANTASTIC" DIFFERENCE IN PRICE AS THERE WAS ABOUT 125 POUNDS OF RUBBER MATERIAL INVOLVED AT $6 PER POUND ON A $176 CONTRACT. THE COMPANY REQUESTED THAT IT BE PERMITTED TO USE GRADE SB 405 RUBBER IN LIEU OF GRADE SA-405 RUBBER IN THE MANUFACTURE OF THE WASHER GASKETS. LETTER DATED MAY 7, 1956, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT IT WOULD BE REQUIRED TO FURNISH GASKETS MADE FROM GRADE SA-405 RUBBER, AND THAT IT COULD SUBMIT AN INVOICE FOR THE ADDITIONAL AMOUNT BELIEVED TO BE DUE AND THAT, IF ADEQUATELY SUPPORTED, ITS CLAIM FOR ADDITIONAL COMPENSATION WOULD BE RECOMMENDED FOR APPROVAL IN AN AMOUNT CONSIDERED REASONABLE. AMOUNT CONSIDERED REASONABLE.

IN A LETTER DATED MAY 24, 1956, IN WHICH IT REFERRED TO ITS TELEPHONE CALL OF THE SAME DATE, THE COMPANY STATED THAT IT HAD PREVIOUSLY PROMISED THE PROCUREMENT AGENCY THAT SHIPMENT OF THE GASKETS WOULD BE MADE ON THE FOLLOWING DAY, MAY 25, BUT THAT IT HAD NOW DISCOVERED THAT ITS SUBCONTRACTOR HAD SHIPPED IT GRADE SA-505 RUBBER RATHER THAN SA-405 RUBBER; THAT THE ONLY DIFFERENCE BETWEEN THE TWO GRADES OF RUBBER IS THAT GRADE SA-405 RUBBER HAS A DUROMETER HARDNESS NUMBER OF 40 WHEREAS THE GRADE SA-505 RUBBER HAS A DUROMETER HARDNESS NUMBER OF 50. THE COMPANY REQUESTED THAT IT BE PERMITTED TO SHIP GASKETS MADE OF GRADE SA-505 RUBBER. BY MODIFICATION NO. 2 DATED JUNE 6, 1956, AUTHORITY WAS GRANTED TO THE COMPANY TO USE GRADE SA-505 RUBBER IN LIEU OF GRADE SA-405 RUBBER IN THE MANUFACTURE OF THE GASKETS.

IN A LETTER DATED AUGUST 31, 1956, IN WHICH IT REQUESTED THAT THE CONTRACT PRICE OF THE GASKETS BE INCREASED FROM $176 TO $858.80, THE COMPANY STATED THAT ITS SUBCONTRACTOR, ASSOCIATED GASKETS, INC., BRIDGEPORT, CONNECTICUT, HAD MANUFACTURED THE REQUIRED GASKETS FOR THE COMPANY AND THAT IT HAD PURCHASED 109 1/2 POUNDS OF THIOKOL RUBBER FROM THE HOWIELER RUBBER COMPANY, INC., MORRISVILLE, PENNSYLVANIA, FOR THE FULFILLMENT OF THE CONTRACT. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED A COPY OF A LETTER DATED AUGUST 13, 1956, RECEIVED FROM ITS SUBCONTRACTOR, ASSOCIATED CASKETS, INC., IN WHICH THE COMPANY WAS ADVISED THAT THE CORPORATION'S PRICE FOR MANUFACTURING THE 4,000 GASKETS WAS $757.90 AND THAT SUCH AMOUNT COVERED THE ITEMS OF $657 FOR THE SPECIAL GRADE OF RUBBER AND $100.90 FOR LABOR AND PROFIT. THE COMPANY ALSO SUBMITTED COPIES OF THE INVOICES RECEIVED BY ITS SUBCONTRACTOR FROM ITS SUPPLIER, HOHWIELER RUBBER COMPANY, INC., WHICH INDICATES THAT THE TOTAL COST OF THE 109 1/2 POUNDS OF THE REQUIRED RUBBER WAS $657 ($6 PER POUND).

IN A LETTER DATED FEBRUARY 14, 1957, THE CONTRACTING OFFICER ADVISED THE COMMANDING GENERAL, ARMY CHEMICAL CENTER AND CHEMICAL CORPS MATERIEL COMMAND, THAT PRIOR TO MAKING THE AWARD HIS OFFICE CONTACTED LOCAL CONTRACTORS OF SPECIAL RUBBER PRODUCTS AND THAT NONE OF THESE CONTRACTORS COULD PRODUCE THE GASKETS TO SPECIFICATIONS AS THE ITEM REQUIRED A SPECIAL GRADE OF RUBBER; AND THAT THESE CONTRACTORS ESTIMATED THE PRICE OF THE GASKETS TO BE ABOUT $0.035 TO $0.04 EACH. IN A MEMORANDUM (COMMENT NO. 1) DATED MAY 7, 1956, THE PROJECT ENGINEER STATED THAT AFTER THE CRESCENT RUBBER PRODUCTS COMPANY HAD ALLEGED ERROR IN ITS BID, ITS STATEMENT THAT THE SPECIAL GRADE OF RUBBER REQUIRED FOR THE MANUFACTURE OF THE GASKETS WOULD COST $6 PER POUND WAS CHECKED WITH LOCAL CONTRACTORS AND THAT NONE OF THESE CONTRACTORS HAD ANY SPECIFIC INFORMATION ON THE COST OF THE SPECIAL GRADE OF RUBBER BUT THAT ONE OF THEM DID STATE THAT THE GRADE SA- 405 RUBBER WOULD BE AT LEAST TWICE AS COSTLY AS THE GRADE SB-405 RUBBER. THUS, IT APPEARS THAT, PRIOR TO AWARD, THE CONTRACTING OFFICER WAS MISLED BY CERTAIN CONTRACTORS AS TO THE PROBABLE COST OF THE REQUIRED GASKETS.

THE RECORD LEAVES LITTLE DOUBT THAT THE COMPANY'S BID WAS ERRONEOUS, AND TO COMPEL THE CONTRACTOR TO FURNISH THE GASKETS FOR $0.044 EACH WOULD APPEAR TO BE INEQUITABLE.

ACCORDINGLY, SINCE THE GASKETS HAVE BEEN DELIVERED AND ACCEPTED AND SINCE THE CONTRACTING OFFICER HAS STATED IN HIS SUPPLEMENTAL REPORT THAT $757.90 IS A FAIR AND REASONABLE PRICE THEREFOR, PAYMENT AT THAT PRICE IS AUTHORIZED TO BE MADE FOR THE GASKETS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.

ONE SET OF THE PAPERS IN THE CASE IS BEING RETAINED. THE OTHER PAPERS IN THE CASE ARE RETURNED.