B-134285, NOV. 21, 1957

B-134285, NOV. 21, 1957

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO LETTER DATED OCTOBER 31, 1957, FROM THE CHIEF OF PROCUREMENT, REQUESTING A DECISION AS TO WHETHER PURCHASE ORDER (CONTRACT) 7-1-12872, DATED JUNE 28, 1957, WITH SHERMAN-MANSON, INC., ST. MARYS, OHIO, MAY BE AMENDED TO COMPENSATE FOR AN ERROR ALLEGED BY THE CONTRACTOR TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF THE CONTRACT.

THE BUREAU OF FACILITIES, WASHINGTON, D.C., BY INVITATION NO. 2992 ISSUED ON MAY 17, 1957, REQUESTED BIDS TO BE OPENED ON JUNE 19, FOR FOUR ITEMS OF POSTAL EQUIPMENT TO BE DELIVERED TO OAKLAND, CALIFORNIA. BIDS WERE INVITED ON AN F.O.B. ORIGIN AND/OR DESTINATION BASIS, AND SEPARATE PROVISIONS WERE MADE IN THE INVITATION FOR BIDDERS TO QUOTE ON EITHER ONE OR BOTH BASES. IN THE EVENT BIDS WERE SUBMITTED ON AN F.O.B. ORIGIN BASIS, BIDDERS WERE REQUIRED TO SHOW, IN ADDITION TO PRICE, THE SHIPPING WEIGHT OF THE ARTICLE.

SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. SHERMAN MANSON, INC., SUBMITTED A BID DATED JUNE 17, 1957, SIGNED BY R. K. TAYLOR "PER FAM," VICE PRESIDENT, GENERAL MANAGER, OFFERING TO FURNISH ITEM NO. 126 FOR $92.00 EACH AND ITEM NO. 129 FOR $46.00 EACH, F.O.B. CARS AT FACTORY, ST. MARYS, OHIO. THE SHIPPING WEIGHTS FOR THE ITEMS WERE SHOWN AS 415 AND 130 POUNDS, RESPECTIVELY. ALSO, THE CORPORATION OFFERED TO FURNISH THE TWO ITEMS F.O.B. DESTINATION FOR PRICES OF $97.00 AND $51.00 EACH, RESPECTIVELY.

THE BIDS RECEIVED IN RESPONSE TO THE INVITATION WERE EVALUATED AND THE BID OF SHERMAN-MANSON, INC., ON ITEM NO. 126 OF $97.00 F.O.B. DESTINATION WAS LOW. IT IS REPORTED THAT DURING THE EVALUATION IT WAS NOTED THAT THIS PRICE WAS RATHER LOW IN COMPARISON WITH THE OTHER BIDS, THAT THE LOCAL REPRESENTATIVE OF SHERMAN-MANSON, INC., WAS REQUESTED TO VERIFY THE BID PRICE, AND THAT HE ADVISED INFORMALLY THAT THE PRICE WAS CORRECT. THE BID ON ITEM NO. 126, F.O.B. DESTINATION, WAS ACCEPTED ON JUNE 28, 1957, BY PURCHASE ORDER NO. 7-1-12872.

BY LETTERS DATED JULY 9 AND AUGUST 30, 1957, THE CONTRACTOR ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM NO. 126 ON THE F.O.B. DESTINATION BASIS. IT IS STATED IN EXPLANATION AND SUPPORT OF THE ALLEGED ERROR THAT THE COMPANY ALREADY HAD SOME CONTRACTS FOR THE ITEM NO. 126 TABLE AND CASE, AND SINCE THE 25 UNITS COVERED BY THIS BID COULD BE RUN WITH THE PREVIOUS ORDERS AN ALLOWANCE WAS MADE. THIS ALLOWANCE WAS REFLECTED BY REDUCING THE FREIGHT RATE FROM $5.77 PER CWT. TO $4.10 AND ARRIVING AT A COST OF $17.00 PER UNIT FOR FREIGHT. IT IS FURTHER STATED THAT AT THE TIME THIS JOB WAS BID THERE WERE A CONSIDERABLE NUMBER OF INVITATIONS TO BE FIGURED AND QUOTED, AND IN VIEW OF THE TIME ELEMENT THE PRICES WERE TELEPHONED TO ITS WASHINGTON REPRESENTATIVE, MR. FRANK MARINO, AS SOON AS EACH SET OF QUOTATION FIGURES WAS COMPLETED, AND THAT IN HIS HASTE TO GET THE BIDS SUBMITTED IN TIME MR. MORINO MADE THE ERROR OF ALLOWING $5.00 FOR FREIGHT ON EACH OF THE ITEMS UNDER THE INVITATION HERE INVOLVED WHEREAS THE $5.00 FREIGHT COST WAS FOR ITEM NO. 129 ONLY. THE CHIEF OF PROCUREMENT REPORTS THAT FOR SHIPMENT ON A GOVERNMENT BILL OF LADING THE FREIGHT COST FOR ITEM NO. 126 WOULD BE $26.55 PER UNIT.

THE BID ITSELF SHOWS THAT THE DIFFERENCE BETWEEN THE F.O.B. ORIGIN AND DESTINATION PRICE ON BOTH ITEMS NO. 126 AND 129 IS $5.00 IN SPITE OF THE FACT THAT THE WEIGHTS OF THE ITEMS ARE SHOWN AS 415 AND 130 POUNDS, RESPECTIVELY. ALTHOUGH THE BIDDER WAS REQUESTED TO VERIFY ITS BID ON ITEM NO. 126 PRIOR TO AWARD, IT APPEARS THAT SUCH REQUEST WAS BASED ON THE FACT THAT THE DELIVERED PRICE APPEARED LOW IN COMPARISON WITH THE OTHER BIDS. IN THE CIRCUMSTANCES AND SINCE THE CONTRACTING OFFICER WAS AWARE OF THE FACT THAT THE DESTINATION PRICE QUOTED BY THE BIDDER WAS QUITE LOW, THE DELIVERED PRICE BEING LOWER THAN THE ORIGIN PRICE OF ANY OTHER BIDDER, IT MAY BE QUESTIONED WHETHER THE CONFIRMATION WAS SUFFICIENT TO OVERCOME THE DOUBT WHICH SHOULD HAVE BEEN RAISED BY THE FACT THAT DIFFERENCE BETWEEN THE ORIGIN AND DESTINATION PRICES ON THE TWO ITEMS WAS THE SAME IN VIEW OF THE DIFFERENCE IN WEIGHTS SHOWN FOR THE ITEMS.

SINCE THERE APPEARS NO DOUBT THAT AN ERROR WAS MADE IN THE BID, AND SINCE IT APPEARS FROM THE ABSTRACT THAT THE SHERMAN-MANSON BID OF $92.00 EACH FOR ITEM 126, F.O.B. FACTORY, WOULD REPRESENT A LOWER COST TO THE GOVERNMENT ON THAT ITEM THAN ANY OTHER BID EXCEPT ITS DELIVERED PRICE BID, SO THAT IT WOULD IN ANY EVENT BE ENTITLED TO THE AWARD OF THAT ITEM, AN AMENDMENT MAY BE MADE TO PURCHASE ORDER NO. 7-1-12872 INCREASING THE UNIT PRICE OF ITEM NO. 126 BY THE AMOUNT OF $12.00, OR TO $109.00 PER UNIT, WHICH IS STILL THE LOWEST PRICE AVAILABLE FOR THE ITEM.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO THE PURCHASE ORDER.