B-135522, MAR. 27, 1958

B-135522: Mar 27, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED MARCH 14. THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS THE LOWEST BID RECEIVED FOR ITEM NO. 1 AND. IT WAS ACCEPTED BY THE PHILADELPHIA QUARTERMASTER DEPOT ON JUNE 14. DESTINATION BASIS WAS EXECUTED AND RETURNED WITHOUT INCREASING THE BID PRICE TO COVER THE COST OF THE ADDITIONAL TRANSPORTATION EXPENSES TO THE CONTRACTOR. IT IS REPORTED THAT COMPLETE PERFORMANCE UNDER THE CONTRACT WAS EFFECTED ON DECEMBER 19. A TOTAL OF FOUR BIDS WERE RECEIVED IN RESPONSE TO INVITATION NO. $7.90 AND $7.95 EACH TO ALL FIVE OF THE ARMY TERMINALS AND THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS FOR $5.49 EACH. WHILE ADMITTEDLY THE BID OF THE NEXT LOW BIDDER OF $5.92 EACH WAS FOR DELIVERY ONLY TO THE BROOKLYN ARMY TERMINAL.

B-135522, MAR. 27, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MARCH 14, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY FOR LOGISTICS, REQUESTING A DECISION AS TO WHETHER THERE MAY BE GRANTED THE RELIEF SOUGHT BY THE MARATHON RUBBER PRODUCTS COMPANY UNDER CONTRACT NO. DA-36-243-QN/CTM/ 358, DATED JUNE 14, 1957.

IN RESPONSE TO INVITATION NO. QM/CTM/36-243-57-102, ISSUED ON MAY 27, 1957, BY THE MILITARY CLOTHING AND TEXTILE SUPPLY AGENCY, PHILADELPHIA QUARTERMASTER DEPOT, THE MARATHON RUBBER PRODUCTS COMPANY OFFERED TO FURNISH, ON AN F.O.B. DESTINATION BASIS, ITEM NO. 1, COVERING 7,987 RAINCOATS, MAN-S, SYNTHETIC RUBBER COATED, ETC., AT $5.49 EACH, OR FOR A TOTAL PRICE OF $43,848.63. THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS THE LOWEST BID RECEIVED FOR ITEM NO. 1 AND, THEREFORE, IT WAS ACCEPTED BY THE PHILADELPHIA QUARTERMASTER DEPOT ON JUNE 14, 1957, THEREBY CONSUMMATING CONTRACT NO. DA-36-243 QM/CTM/-358. BY LETTER DATED OCTOBER 16, 1957, THE MARATHON RUBBER PRODUCTS COMPANY ADVISED THE QUARTERMASTER DEPOT THAT AN ERROR HAD BEEN MADE IN ITS BID, IN THAT ADDENDUM NO. 1 TO THE INVITATION, WHICH CHANGED THE SHIPPING REQUIREMENTS FROM AN F.O.B. ORIGIN TO F.O.B. DESTINATION BASIS WAS EXECUTED AND RETURNED WITHOUT INCREASING THE BID PRICE TO COVER THE COST OF THE ADDITIONAL TRANSPORTATION EXPENSES TO THE CONTRACTOR. IN VIEW OF THE ALLEGED ERROR THE COMPANY REQUESTS REIMBURSEMENT FOR THE TRANSPORTATION COSTS IN THE TOTAL AMOUNT OF $1,632.39. IT IS REPORTED THAT COMPLETE PERFORMANCE UNDER THE CONTRACT WAS EFFECTED ON DECEMBER 19, 1957, AND PAYMENT MADE IN THE FULL AMOUNT UNDER THE CONTRACT.

ADDENDUM NO. 1 PROVIDED, AMONG OTHERS, THAT THE BID QUOTATIONS MUST INCLUDE ALL COSTS OF DELIVERY TO EITHER ONE OR MORE OF THE DEPARTMENT OF THE ARMY TERMINALS LOCATED AT BROOKLYN, NEW YORK; NORFOLK, VIRGINIA; NEW ORLEANS, LOUISIANA; OAKLAND, CALIFORNIA; AND SEATTLE, WASHINGTON. A TOTAL OF FOUR BIDS WERE RECEIVED IN RESPONSE TO INVITATION NO. QM/CTM/36-243-57- 102, TWO OF WHICH QUOTED PRICES OF $5.92 AND $6.40 EACH, F.O.B. TO THE BROOKLYN ARMY TERMINAL. ONE OTHER BIDDER, LOCATED AT HUDSON, MASSACHUSETTS, QUOTED RESPECTIVE F.O.B. DESTINATION PRICE OF $7.69, $7.72, $7.78, $7.90 AND $7.95 EACH TO ALL FIVE OF THE ARMY TERMINALS AND THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS FOR $5.49 EACH, F.O.B. DESTINATION TO EACH OF THE FIVE TERMINALS. WHILE ADMITTEDLY THE BID OF THE NEXT LOW BIDDER OF $5.92 EACH WAS FOR DELIVERY ONLY TO THE BROOKLYN ARMY TERMINAL, YET FOR BID COMPARISON PURPOSES TO THIS PARTICULAR DESTINATION, THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS ONLY $0.43 A UNIT LOWER. WHEN THIS IS CONSIDERED, TOGETHER WITH THE FACT THAT THERE ALSO EXISTED A VARIATION OF ONLY FROM $0.03 TO $0.26 EACH IN THE F.O.B. DESTINATION PRICES OF THE BIDDER WHO QUOTED DIFFERENT PRICES ON EACH OF THE FIVE DEPARTMENT OF THE ARMY TERMINALS, NOTWITHSTANDING THE CROSS-COUNTRY DISTANCES NECESSARILY INVOLVED IN SEVERAL OF THE DESTINATIONS, IT IS NOT BELIEVED THAT FROM AN OVER-ALL BID COMPARISON BASIS IT MAY BE CONCLUDED THAT THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY WAS OUT OF LINE WITH THE OTHER BIDS RECEIVED. MOREOVER, THE FACT THAT THE MARATHON RUBBER PRODUCTS COMPANY SUBMITTED THE SAME BID PRICE TO ALL FIVE DESTINATIONS WHEN ONE OF THE BIDDERS QUOTED DIFFERENT PRICES FOR EACH TERMINAL MAY NOT, IN ITSELF, BE CONSIDERED AS BEING INDICATIVE OF A PROBABLE ERROR IN THE BID SINCE, AS STATED IN THE REPORT AND RECOMMENDATIONS FURNISHED BY THE DEPARTMENT OF THE ARMY IN THE CASE, IT IS NOT NECESSARILY UNUSUAL FOR A BIDDER TO SUBMIT A BLANKET BID IN RESPONSE TO INVITATIONS SPECIFYING F.O.B. DELIVERIES AT SEVERAL DIFFERENT DESTINATIONS. ALSO, SUCH A BLANKET BID WOULD NOT BE REGARDED AS UNUSUAL IN THIS CASE AS THE CONTRACTOR'S SHIPPING POINT IS MORE OR LESS CENTRALLY LOCATED WITH REGARD TO THE VARIOUS TERMINALS MENTIONED IN THE INVITATION.

IN VIEW OF THE FOREGOING, AND SINCE NO INDICATION OF AN ERROR APPEARED ON THE FACE OF THE BID ITSELF OR IN ANY OF THE OTHER ATTENDANT CIRCUMSTANCES THERETO, IT MAY NOT BE CONCLUDED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF AN ERROR IN THE LOW BID. THE ACCEPTANCE OF THE BID OF THE MARATHON RUBBER PRODUCTS COMPANY UNDER THE CIRCUMSTANCES REPORTED WAS MADE IN GOOD FAITH. SUCH ACCEPTANCE CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES AND NEITHER OUR OFFICE NOR ANY OFFICER OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELINQUISH THE RIGHTS WHICH VEST IN THE GOVERNMENT UNDER SUCH CONTRACTS.

ACCORDINGLY, OUR OFFICE FINDS NO LEGAL BASIS UPON WHICH ANY PART OF THE $1,632.39 CLAIMED MAY BE ALLOWED.

THE PAPERS, WITH THE EXCEPTION OF THE REPORT AND RECOMMENDATION OF THE SUCCESSOR CONTRACTING OFFICER DATED JANUARY 28, 1958, AND THE MEMORANDUM OF THE CONTRACT ADJUSTMENT BRANCH, OFFICE OF THE GENERAL COUNSEL, DATED MARCH 3, 1958, ARE RETURNED HEREWITH.