B-136024, MAY 15, 1958

B-136024, MAY 15, 1958

TO THE SECRETARY OF THE ARMY:

BY LETTER DATED APRIL 29, 1958, THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS) REQUESTED A DECISION AS TO PROPRIETY OF MODIFYING CONTRACT NO. DA 33-031-QM-20574, DATED JANUARY 31, 1958, SO AS TO CORRECT AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID WHICH FORMED THE BASIS OF THE CONTRACT.

INVITATION NO. QM 33-031-58-347, ISSUED DECEMBER 19, 1957, BY THE COLUMBUS GENERAL DEPOT, OHIO, SOLICITED BIDS ON TWO ITEMS OF GUMMED PAPER TAPE, F.O.B. VARIOUS DESTINATIONS. ITEM NO. 1 CALLED FOR APPROXIMATELY 4,650 ROLLS OF TWO-INCH TAPE, OF WHICH 4,245 ROLLS WERE SCHEDULED FOR PACKING AND DELIVERY TO THE SEVERAL DOMESTIC POINTS OF DESTINATION INDICATED OPPOSITE SUB-ITEMS NOS. 1A THROUGH 1H, AND 405 ROLLS FOR EXPORT PACKING AND DELIVERY AT OAKLAND, CALIFORNIA, FOR EVENTUAL SHIPMENT TO PEARL HARBOR, T.H. ITEM NO. 2 CALLED FOR APPROXIMATELY 4,000 ROLLS OF THREE-INCH GUMMED PAPER TAPE SCHEDULED FOR PACKING AND DELIVERY TO THE FOUR DOMESTIC POINTS OF DESTINATION INDICATED OPPOSITE SUB-ITEMS NOS. 2A THROUGH 2D. IN RESPONSE THERETO, THE CONTRACTOR, THE ATLANTIC GUMMED PAPER CORPORATION, OF BROOKLYN, NEW YORK, IN A BID DATED JANUARY 3, 1958, QUOTED A UNIFORM UNIT PRICE OF ?4046 PER ROLL FOR BOTH THE TWO AND THREE- INCH TAPE, AS COVERED BY ITEMS NOS. 1 AND 2, AND REGARDLESS OF THE POINTS OF DESTINATION, INCLUDING THE WEST COAST, AND WHETHER THE ITEMS WERE FOR DOMESTIC OR EXPORT PACK.

THE AMOUNTS OF THE OTHER BIDS RECEIVED UNDER THE SAID INVITATION RANGED FROM A LOW OF ?386 PER ROLL FOR ITEM 1A, COVERING AN EAST COAST DELIVERY, TO A HIGH OF ?60 PER UNIT OF ITEM 1IX, COVERING A WEST COAST DELIVERY, AND ALSO, EXPORT PACKING. THE BIDS ON ITEMS 2A THROUGH 2D, COVERING THE THREE -INCH TAPE, ALL SCHEDULED FOR DOMESTIC PACK AND DELIVERY, RANGED FROM A LOW OF ?58 PER ROLL TO A HIGH OF ?66 EACH, DEPENDING UPON POINT OF DELIVERY.

UPON OPENING OF THE BIDS ON JANUARY 7, 1958, THE CONTRACTING OFFICER NOTICED THAT THE ATLANTIC GUMMED PAPER CORPORATION HAD BID THE SAME UNIT PRICE FOR BOTH THE TWO-INCH TAPE AND THE THREE-INCH TAPE FOR ALL DESTINATIONS, AND FOR EXPORT AND DOMESTIC PACK, CAUSING HIM TO SUSPECT AN ERROR IN THE PREPARATION OF ITS BID. ACCORDINGLY, ON JANUARY 9, 1958, THE CONTRACTING OFFICER DIRECTED A LETTER TO THE SAID FIRM, READING IN PART AS FOLLOWS:

"FURTHER REQUEST VERIFICATION OF UNIT PRICE F.O.B. DESTINATION BID OF ?4046 ALL ITEMS INCLUDING ITEM 1IX (EXPORT PACK) AND WEST COAST DESTINATIONS.'

IT WILL BE NOTICED THAT NO MENTION WAS MADE IN THE ABOVE REQUEST THAT THE CONTRACTOR'S BID ON THE THREE-INCH TAPE, AS COVERED BY ITEM NO. 2, WAS APPRECIABLY OUT OF LINE WITH THE AMOUNTS OF THE OTHER BIDS ON THIS ITEM.

THE CONTRACTING OFFICER'S LETTER OF JANUARY 9, 1958, WAS RETURNED TO HIM WITH THE FOLLOWING UNSIGNED TYPEWRITTEN NOTATION APPEARING AT THE END THEREOF:

"PLEASE NOTE: PRICE OF .4046 IS A FIRM ONE INCLUDING EXPORT PACK AND WEST COAST DESTINATIONS.'

UPON RECEIPT OF THIS CONFIRMATION, THE CONTRACT WAS AWARDED THE ATLANTIC GUMMED PAPER CORPORATION ON JANUARY 31, 1958.

BY LETTER OF FEBRUARY 10, 1958, THE CONTRACTOR ADVISED THE GOVERNMENT PURCHASING AGENT OF THE DISCOVERY OF A "SERIOUS" ERROR IN ITS BID, ALLEGEDLY ATTRIBUTABLE TO INEXPERIENCE UPON THE PART OF THE PERSON WHO HAD PREPARED IT (A SALESMAN NO LONGER IN THE COMPANY'S EMPLOY), WHICH RESULTED FROM ITS FAILURE TO NOTICE THE INCLUSION OF THREE-INCH WIDE GUMMED SEALING TAPE UNDER ITEM NO. 2 OF THE INVITATION. IT WAS FURTHER STATED THEREIN THAT ITS PROPOSAL WAS FIGURED AND SUBMITTED SOLELY UPON THE BASIS OF THE TWO-INCH TAPE, AS DESCRIBED UNDER ITEM NO. 1, AND THAT ITS QUOTED BID PRICE OF ?4046 WAS FIGURED ON THE LESSER WIDTH ONLY; ALSO, THAT ITS PRICE ON ITEM NO. 2 (THREE-INCH TAPE) SHOULD HAVE BEEN ?6069 PER ROLL. COST DATA SUBSEQUENTLY FURNISHED WITH THE CONTRACTOR'S LETTER OF FEBRUARY 24, 1958, INDICATES THAT THE ACTUAL COST OF MANUFACTURE OF ITEM NO. 2 IS APPROXIMATELY ?53965 PER ROLL, WHICH, OF COURSE, IS EXCLUSIVE OF FREIGHT TO DESTINATIONS. IN A LETTER DATED MARCH 10, 1958, THE CONTRACTOR REQUESTED THAT ITS BID PRICE ON ITEM 2 BE REVISED TO CONFORM TO THAT OF THE NEXT LOWEST BIDDER.

IT IS THE GENERAL RULE THAT WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF IT CONSUMMATES A VALID AND BINDING CONTRACT. SEE 17 COMP. GEN. 942; 27 ID. 17; 35 ID. 135, 138. IN THE PRESENT CASE, HOWEVER, THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE CONTRACTOR BE GRANTED THE RELIEF REQUESTED ON THE GROUND OF OBVIOUS ROR,"NOTWITHSTANDING THE CONTRACTOR'S VERIFICATION.' HE CONCEDES THAT SINCE ALL THE OTHER BIDDERS UNDER THE INVITATION QUOTED PRICES SUBSTANTIALLY HIGHER FOR THE ITEM NO. 2 (THREE-INCH TAPE) THAN FOR THE FIRST ITEM, AND SINCE HE WAS AWARE THAT THE COST OF A THREE INCH ROLL WAS APPROXIMATELY ONE AND A HALF TIMES THAT OF A TWO-INCH ROLL, HIS CONFIRMATION REQUEST OF JANUARY 9, 1958, SHOULD HAVE INCLUDED THE FURTHER REQUEST TO "VERIFY AN IDENTICAL PRICE FOR 2 INCH AND 3 INCH TAPE.'

WITHOUT ATTEMPTING TO JUDGE THE ADEQUACY OR SUFFICIENCY OF THE CONFIRMATION REQUEST REFERRED TO, IT WOULD SEEM THAT SINCE THE CONTRACTING OFFICER WAS SEEKING CONFIRMATION OF THE BID PRICE AS APPLIED TO THE SEVERAL DESTINATION POINTS DESIGNATED, AN ALSO AS TO WHETHER THE QUOTED PRICE WAS INTENDED TO APPLY TO BOTH DOMESTIC AND EXPORT PACK, INQUIRY SHOULD HAVE BEEN MADE AS TO WHETHER THE CONTRACTOR HAD INTENDED TO QUOTE THE SAME PRICE FOR BOTH TWO-INCH AND THREE-INCH ROLLS. 35 COMP. GEN. 136.

IN VIEW THEREOF, AND OF THE CONTRACTING OFFICER'S REPORT AND RECOMMENDATION IN THE PREMISES, YOU ARE ADVISED THAT WE WOULD NOT OBJECT TO THE MODIFICATION OF THE CONTRACT PRICE FOR ITEM NO. 2 TO CONFORM TO THE NEXT LOWEST BID PRICE OF ?58 PER ROLL ON ITEMS NOS. 2A, 2B AND 2C, AND TO THE CONTRACTOR'S INTENDED BID PRICE OF ?6069 EACH FOR ITEM NO. 2D, AS RECOMMENDED BY THE CONTRACTING OFFICER.