B-134027, JAN. 22, 1958

B-134027: Jan 22, 1958

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED JANUARY 6. TO HAVE BEEN MADE IN THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING SUBMITTED WITH ITS BID ON WHICH CONTRACT NO. GS-00S-15256 WAS AWARDED. PROSPECTIVE BIDDERS WERE REQUESTED TO SUBMIT. ATTACHED TO THE BID WAS A LETTER DATED MAY 28. ALSO ATTACHED TO THE BID WAS A SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING. A CONTRACT WAS NEGOTIATED WITH THE INTERNATIONAL BUSINESS MACHINES CORPORATION FOR THE RENTAL OF THE ACCOUNTING MACHINES AND AUXILIARY EQUIPMENT DESCRIBED UNDER ITEM 54-R 4246 OF THE INVITATION. THE INTERNATIONAL BUSINESS MACHINES CORPORATION ADVISED THE FEDERAL SUPPLY SERVICE AS FOLLOWS: "REFERENCE IS MADE TO PAGE 9 OF THE SECTION ON IBM 650 SYSTEMS AND MACHINES OF THE ILLUSTRATED AND DESCRIPTIVE PRICE LIST SUBMITTED WITH CONTRACTOR'S PROPOSAL DATED MAY 28.

B-134027, JAN. 22, 1958

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JANUARY 6, 1958, WITH ENCLOSURES, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO A TYPOGRAPHICAL ERROR ALLEGED BY THE INTERNATIONAL BUSINESS MACHINES CORPORATION, DATA PROCESSING DIVISION, WASHINGTON, D.C., TO HAVE BEEN MADE IN THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING SUBMITTED WITH ITS BID ON WHICH CONTRACT NO. GS-00S-15256 WAS AWARDED.

THE FEDERAL SUPPLY SERVICE, NATIONAL BUYING DIVISION, WASHINGTON, D.C., BY INVITATION ISSUED ON FEBRUARY 1, 1957, AS AMENDED BY SPECIAL NOTICE NO. 1 DATED FEBRUARY 21, 1957, REQUESTED BIDS UNDER CLASS 54, PART II, FOR THE RENTAL TO THE GOVERNMENT OF THE OFFICE EQUIPMENT DESCRIBED IN THE INVITATION. PROSPECTIVE BIDDERS WERE REQUESTED TO SUBMIT, IN TRIPLICATE, ILLUSTRATED AND/OR DESCRIPTIVE PRICE LISTS WITH THEIR BIDS. IN RESPONSE THE INTERNATIONAL BUSINESS MACHINES CORPORATION SUBMITTED AN EXECUTED BID FORM IN WHICH IT REFERRED TO ITS ATTACHED PRICE LIST FOR THE RENTAL RATES FOR THE VARIOUS TYPES OF OFFICE EQUIPMENT. ATTACHED TO THE BID WAS A LETTER DATED MAY 28, 1957, IN WHICH THE CORPORATION STIPULATED THE TERMS AND CONDITIONS UNDER WHICH THE OFFICE EQUIPMENT WOULD BE RENTED TO THE GOVERNMENT, AND BY SUBSEQUENT LETTERS THE CORPORATION AMENDED SUCH TERMS AND CONDITIONS. ALSO ATTACHED TO THE BID WAS A SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING. ON AUGUST 15, 1957, UNDER THE PROVISIONS OF SECTION 302 (C) (9) OF PUBLIC LAW 152, 81ST CONGRESS (63 STAT. 394), AS AMENDED, A CONTRACT WAS NEGOTIATED WITH THE INTERNATIONAL BUSINESS MACHINES CORPORATION FOR THE RENTAL OF THE ACCOUNTING MACHINES AND AUXILIARY EQUIPMENT DESCRIBED UNDER ITEM 54-R 4246 OF THE INVITATION.

IN A LETTER DATED SEPTEMBER 3, 1957, THE INTERNATIONAL BUSINESS MACHINES CORPORATION ADVISED THE FEDERAL SUPPLY SERVICE AS FOLLOWS:

"REFERENCE IS MADE TO PAGE 9 OF THE SECTION ON IBM 650 SYSTEMS AND MACHINES OF THE ILLUSTRATED AND DESCRIPTIVE PRICE LIST SUBMITTED WITH CONTRACTOR'S PROPOSAL DATED MAY 28, 1957 WHEREIN CONTRACTOR'S ESTABLISHED MONTHLY CHARGE FOR THE IBM 655 POWER UNIT, MODEL II, IS CORRECTLY SHOWN AS $1,100.00.

"AS THE RESULT OF A TYPOGRAPHICAL ERROR, THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING WHICH CONTRACTOR SUBMITTED ALONG WITH THE ILLUSTRATED AND DESCRIPTIVE PRICE LIST AS A CONVENIENCE FOR GOVERNMENT AGENCIES, INCORRECTLY SHOWS THE MONTHLY CHARGE FOR THE IBM 655 POWER UNIT, MODEL II, ON PAGE 20 AS $1,000.00. THIS SAME TYPOGRAPHICAL ERROR APPEARS ON PAGE 10 OF THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING IN THE PRELIMINARY EDITION OF THE CONTRACTOR'S CATALOG ISSUED WITH THE APPROVAL OF THE GENERAL SERVICES ADMINISTRATION TO ASSIST GOVERNMENT AGENCIES IN PREPARING ORDERS FOR FISCAL YEAR 1958.'

THE LETTER REQUESTED THAT THE MONTHLY CHARGE FOR THE UNIT BE CORRECTED TO $1,100 ON PAGE 20 OF THE REFERRED-TO SUMMARY SUBMITTED WITH THE PROPOSAL OF MAY 28, 1957, AND ON PAGE 10 OF THE SUMMARY INCLUDED IN THE PRELIMINARY EDITION OF CONTRACTOR'S CATALOG ISSUED TO GOVERNMENT AGENCIES. BY LETTER DATED SEPTEMBER 11, 1957, THE FEDERAL SUPPLY SERVICE ADVISED THE CORPORATION THAT IT WAS WITHOUT AUTHORITY TO MAKE THE REQUESTED CHANGE IN THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING; THAT IT SHOULD ADDRESS ITS REQUEST FOR RELIEF TO THE GENERAL ACCOUNTING OFFICE; AND THAT IT SHOULD BILL FOR THE RENTAL OF THE TYPE 655 POWER UNITS AT THE RATE OF $1,000 PER MONTH.

IN A LETTER DATED OCTOBER 7, 1957, TO OUR OFFICE, THE CORPORATION REQUESTED THAT THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING, WHICH IT STATED WAS FURNISHED SOLELY FOR PURPOSES OF CONVENIENT AND READY REFERENCE, BE CORRECTED TO SHOW A MONTHLY RENTAL CHARGE OF $1,100 PER MONTH FOR A TYPE 655, MODEL 2 POWER UNIT. IN SUPPORT OF ITS REQUEST FOR RELIEF, THE CORPORATION SUBMITTED A COPY OF AN INTRA- OFFICE MEMORANDUM DATED SEPTEMBER 4, 1956, IN WHICH SALES PERSONNEL WERE ADVISED TO NOTIFY THEIR CUSTOMERS OF CERTAIN PRICE REVISIONS ON THE IBM 655 DATA PROCESSING SYSTEM, AND A COPY OF THE SHEET CONTAINING THE NEW PRICE REVISIONS, WHICH WERE MADE EFFECTIVE AS OF JANUARY 1, 1957. THE PRICE REVISIONS SHEET SHOWS FOR A TYPE 655, MODEL 2 POWER UNIT, A MONTHLY RENTAL CHARGE OF $1,100.

IN HIS REPORT OF DECEMBER 18, 1957, THE CONTRACTING OFFICER STATES--

"3. PAGE 9 OF THE ACCEPTED PRICE LIST UNDER THE CONTRACT INCLUDED IBM 655 POWER UNIT, INPUT-OUTPUT SYNCHRONIZERS NO. 1 AND 2, MODEL 2, STIPULATED THE MONTHLY CHARGE OF $1100.00 AND ON PAGE 20 OF THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS THE PRICE OF $1000.00 IS INDICATED FOR THE IBM 655 POWER UNIT, MODEL 2.

"4. IN LETTER DATED SEPTEMBER 3, 1957, THE CONTRACTOR ALLEGED A TYPOGRAPHICAL ERROR WAS MADE UNDER ITEM 54-R-4246, IBM 655 POWER UNIT, MODEL 2 ON PAGE 20 OF THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING, ADVISING THAT THE PRICE SHOULD BE $1100.00 PER MONTH AS STIPULATED ON PAGE 9 OF THE SECTION ON IBM 650 SYSTEMS AND MACHINES OF HIS PRICE LIST.

"5. THE INCONSISTENCY BETWEEN THE ACTUAL LIST PRICE IN THE OFFER FOR THE ITEM CONCERNED AND THE PRICE STATED IN THE SUMMARY FOR THE SAME ITEM WAS NOT NOTICED AT THE TIME OF EVALUATION OF THE OFFER. THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING SUBMITTED WITH THE OFFER IS MERELY AN ADDITIONAL LISTING VOLUNTARILY FURNISHED BY THE SUPPLIER FOR THE CONVENIENCE OF THE GOVERNMENT ORDERING OFFICES IN LOCATING THE APPROPRIATE ITEM IN THE CATALOG. THIS SUMMARY ONLY PARTIALLY IDENTIFIES EACH SPECIFIC ITEM SO LISTED AND REFERS TO THE SECTION AND PAGE NUMBER OF THE BASIC PRICE LIST FOR COMPLETE INFORMATION WITH RESPECT TO EACH ITEM. CONSEQUENTLY, THE SUMMARY SHOULD NOT BE CONSTRUED TO BE THE PRICE OFFERED BUT MERELY AN INFORMAL PART OF THE OFFER SUBMITTED, WITH THE RESULT THAT THE ONLY PRICE UPON WHICH THERE WAS A MEETING OF THE MINDS IS THE PRICE SET FORTH IN THE BASIC PRICE LIST.'

SINCE IT APPEARS THAT THE CONTRACT WAS NEGOTIATED ON THE BASIS OF THE PRICES SHOWN IN THE CORPORATION'S DESCRIPTIVE CATALOG, WHICH SHOWS A MONTHLY RENTAL CHARGE OF $1,100 FOR A TYPE 655, MODEL 2 POWER UNIT, THIS OFFICE PERCEIVES NO LEGAL OBJECTION TO THE CORRECTION OF THE SUMMARY OF CATALOG PRICES AND DESCRIPTIONS FOR ORDERING AND BILLING TO SHOW A MONTHLY RENTAL CHARGE OF $1,100 FOR THE ITEM HERE INVOLVED, AND PAYMENT TO THE CORPORATION FOR THE USE OF SUCH EQUIPMENT IS AUTHORIZED TO BE MADE ON THAT BASIS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHERS COVERING PAYMENT OF THE RENTAL CHARGES ON THE TYPE 655, MODEL 2 POWER UNITS COVERED BY ITEM 54-R-4246.