B-135571, APR. 1, 1958

B-135571: Apr 1, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED MARCH 19. IS BASED. 3 WAS ACCEPTED ON NOVEMBER 8. THE RECORD SHOWS THAT DELIVERIES OF ITEMS 1 AND 2 HAVE BEEN COMPLETED. QUOTATION ON THE FIRST REQUEST WAS FURNISHED OCTOBER 3 AND ON OCTOBER 9 THE SUPPLIER THROUGH ERROR WAS ADVISED TO DISREGARD THE SECOND REQUEST. THE CONTRACTOR ALLEGED THAT HIS BID HAD BEEN COMPUTED ON THE BASIS OF THE PRICES FURNISHED IN RESPONSE TO THE FIRST REQUEST AND THAT THE ERROR WAS NOT DISCOVERED UNTIL AFTER AWARD. HE STATED THAT HE DID NOT IMMEDIATELY ADVISE THE CONTRACTING OFFICER OF THE ERROR SINCE HE WAS ATTEMPTING TO NEGOTIATE WITH HIS SUPPLIER IN ORDER TO OBTAIN A LOWER PRICE ON THE CORRECT ITEM AND THAT HE HAD BEEN ADVISED THAT PRICES WOULD BE ABOUT 40 PERCENT HIGHER ON THE CORRECT ITEM.

B-135571, APR. 1, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MARCH 19, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR FREDERICK P. WEINER ALLEGES HE MADE ON ITEMS 3 OF HIS BID ON WHICH CONTRACT NO. O.I. 2491-58Q, DATED NOVEMBER 8, 1957, IS BASED.

BY INVITATION NO. QM 33-031-58-206, DATED SEPTEMBER 23, 1957, THE QUARTERMASTER PURCHASING AGENCY, COLUMBUS GENERAL DEPOT, COLUMBUS,OHIO, REQUESTED BIDS--- TO BE OPENED OCTOBER 14, 1957--- FOR THE FURNISHING OF THREE ITEMS OF FIBERBOARD BOXES, EACH ITEM FOR DELIVERY TO VARIOUS DESTINATIONS. MR. WEINER'S BID ON ITEMS 1, 2, AND 3 WAS ACCEPTED ON NOVEMBER 8, 1957. THE RECORD SHOWS THAT DELIVERIES OF ITEMS 1 AND 2 HAVE BEEN COMPLETED.

ON DECEMBER 22, 1957, THE CONTRACTOR ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN HIS BID ON ITEM 3. THEREAFTER HE SUBMITTED AN EXPLANATION OF THE MANNER IN WHICH THE MISTAKE HAD OCCURRED, TOGETHER WITH DOCUMENTS IN SUPPORT OF THE ERROR AND THE ALLEGED INTENDED PRICES. THE CONTRACTOR STATED THAT HIS OFFICE MANAGER ON SEPTEMBER 26, 1957, HAD REQUESTED A QUOTATION ON ITEM 3 FROM HIS SUPPLIER, CARNELL PAPERBOARD PRODUCT COMPANY, BUT HAD ERRONEOUSLY DESIGNATED THE ITEM AS A REGULAR SLOTTED CONTAINER. LATER THE OFFICE MANAGER DISCOVERED THE ERROR AND REQUESTED A QUOTATION ON THE CORRECT FULL OVERLAP ITEM. QUOTATION ON THE FIRST REQUEST WAS FURNISHED OCTOBER 3 AND ON OCTOBER 9 THE SUPPLIER THROUGH ERROR WAS ADVISED TO DISREGARD THE SECOND REQUEST. THE CONTRACTOR ALLEGED THAT HIS BID HAD BEEN COMPUTED ON THE BASIS OF THE PRICES FURNISHED IN RESPONSE TO THE FIRST REQUEST AND THAT THE ERROR WAS NOT DISCOVERED UNTIL AFTER AWARD. ALSO, HE STATED THAT HE DID NOT IMMEDIATELY ADVISE THE CONTRACTING OFFICER OF THE ERROR SINCE HE WAS ATTEMPTING TO NEGOTIATE WITH HIS SUPPLIER IN ORDER TO OBTAIN A LOWER PRICE ON THE CORRECT ITEM AND THAT HE HAD BEEN ADVISED THAT PRICES WOULD BE ABOUT 40 PERCENT HIGHER ON THE CORRECT ITEM.

THE CONTRACTING OFFICER STATED THAT THE ONLY PAST COST EXPERIENCE AVAILABLE FOR THIS ITEM WAS A PURCHASE OF 425 BOXES IN 1955 AT A PRICE OF $0.375 EACH. THIS PRICE WAS COMPARED WITH THE AVERAGE PRICE BID BY THE CONTRACTOR OF $0.31 EACH FOR 7,878 UNITS OF ITEM 3 TO TEST THE REASONABLENESS OF THE PROPOSED AWARD.

THE FOLLOWING ARE THE BID PRICES WHICH THE CONTRACTOR ALLEGES SHOULD HAVE BEEN BID, THE BID PRICE BID, AND THE NEXT LOW BID FOR THE ITEM.

CHART ITEM 3A 3B 3C 3D 3E 3F PRICE BID ?285 ?273 ?303 ?295 ?288 ?361 INTENDED BID .389 .371 .402 .406 .394 .502 NEXT LOW .55555 .37 .37265 .57685 .57755 .3798 ITEM 3G 3H PRICE BID ?365 ?369 INTENDED BID .507 .512 NEXT LOW .3798 .4183

THE CONTRACTING OFFICER STATES THAT IT WAS HIS OPINION THAT THE POSSIBILITY OF AN ERROR IN BID SHOULD HAVE BEEN SUSPECTED BY THE PURCHASING AGENCY PRIOR TO MAKING AN AWARD.

THE EVIDENCE OF RECORD INDICATES THAT AN ERROR, IN FACT, WAS MADE, AND SINCE THE VERY WIDE DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE OTHER BIDS RECEIVED ON MANY OF THE ITEMS APPEARS SUFFICIENT TO HAVE INDICATED THE PROBABILITY OF AN ERROR IN THE BID, IT SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION.

ACCORDINGLY, THE CONTRACT PRICES SHOULD BE INCREASED UP TO THE NEXT LOW BID OR TO THE INTENDED BID PRICE, WHICHEVER IS LOWER, AS RECOMMENDED BY THE CONTRACTING OFFICER.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT INVOLVED.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S REPORT AND RECOMMENDATION OF FEBRUARY 28, 1958, ARE RETURNED.