B-136048, MAY 15, 1958

B-136048: May 15, 1958

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VETERANS ADMINISTRATION CENTER: REFERENCE IS MADE TO YOUR LETTER DATED MAY 2. BIDS WERE REQUESTED FOR FURNISHING CERTAIN PLUMBING SUPPLIES. THE BIDS WERE OPENED ON APRIL 24. WERE IN ERROR. IN EACH CASE THE BID OF THE GRINNELL COMPANY IS APPROXIMATELY ONE-THIRD OF THE NEXT LOWEST BID. A TELEGRAPHIC RESPONSE WAS RECEIVED FROM THE COMPANY THAT SAME DAY IN WHICH IT WAS STATED THAT CORRECT PRICES WOULD BE SENT BY AIR MAIL. ATTACHED YOU WILL FIND OUR PRICE LIST AND THE DISCOUNTS THAT WE HAD USED WORKING WITH THE CAST IRON SCREWED FITTINGS. "A WORK SHEET IS ENCLOSED THOUGH ACTUALLY WAS NOT USED SINCE WE HAVE A PRICING SERVICE WITH THE DISCOUNTS ALREADY TAKEN AND SHOWING THE NET FIGURES. ENCLOSED YOU WILL FIND ALL LIST PRICES COVERING THE CAST IRON SCREWED FITTINGS.

B-136048, MAY 15, 1958

TO MR. E. H. MACKEY, CONTRACTING OFFICER, VETERANS ADMINISTRATION CENTER:

REFERENCE IS MADE TO YOUR LETTER DATED MAY 2, 1958, WITH ENCLOSURES, YOUR REFERENCE 6008/134, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE GRINNELL COMPANY, DENVER, COLORADO ALLEGES IT MADE IN ITS BID OPENED ON APRIL 24, 1958.

BY INVITATION NO. 58-75, DATED APRIL 8, 1958, BIDS WERE REQUESTED FOR FURNISHING CERTAIN PLUMBING SUPPLIES, ITEMS 1 THROUGH 104, INCLUSIVE, TO THE VETERANS ADMINISTRATION CENTER, HOT SPRINGS, SOUTH DAKOTA.

THE BIDS WERE OPENED ON APRIL 24, 1958, AND UPON ANALYZING THE ABSTRACT OF BIDS IT APPEARED TO THE CONTRACTING OFFICER THAT THE BIDS ON ITEMS 6 THROUGH 26 INCLUSIVE AS SUBMITTED BY THE GRINNELL COMPANY, THE LOW BIDDER ON THESE ITEMS, WERE IN ERROR. ITEMS 6 THROUGH 26 REPRESENTED CAST IRON FLANGED FITTINGS (TEES AND ELBOWS) OF VARIOUS SIZES. ON ITEM 6, FOR EXAMPLE, THE GRINNELL COMPANY SUBMITTED A UNIT PRICE OF $6.73. THE SIX OTHER BIDDERS ON THIS ITEM SUBMITTED UNIT PRICES RANGING FROM $15.98 TO $23.48. ALL OF THE BIDDERS SUBMITTED THE SAME UNIT PRICE FOR ITEMS 7, 8, AND 9 AS THEY HAD FOR ITEM 6. THIS DISPARITY IN THE BIDS CONTINUES THROUGH ITEM 26, AND IN EACH CASE THE BID OF THE GRINNELL COMPANY IS APPROXIMATELY ONE-THIRD OF THE NEXT LOWEST BID.

BY TELEGRAM DATED APRIL 25, 1958, THE CONTRACTING OFFICER REQUESTED THE GRINNELL COMPANY TO VERIFY THEIR BID ON ITEMS 6 THROUGH 26. A TELEGRAPHIC RESPONSE WAS RECEIVED FROM THE COMPANY THAT SAME DAY IN WHICH IT WAS STATED THAT CORRECT PRICES WOULD BE SENT BY AIR MAIL.

BY LETTER DATED APRIL 29, 1958, THE GRINNELL COMPANY AUTHORIZED THE CONTRACTING OFFICER TO EXTEND THE TIME OF ACCEPTANCE FOR AN ADDITIONAL 20 DAYS, OR LONGER, IF NECESSARY, IN ORDER THAT THE MATTER COULD BE PRESENTED TO THIS OFFICE. IN THIS LETTER THE BIDDER GAVE THE FOLLOWING EXPLANATION FOR THE ERROR IN HIS BID ON ITEMS 6 THROUGH 26:

"OUR QUOTATION DEPARTMENT HAS QUOTED CAST IRON SCREWED FITTINGS INSTEAD OF THE CAST IRON FLANGED FITTINGS AS SPECIFIED. ATTACHED YOU WILL FIND OUR PRICE LIST AND THE DISCOUNTS THAT WE HAD USED WORKING WITH THE CAST IRON SCREWED FITTINGS.

"A WORK SHEET IS ENCLOSED THOUGH ACTUALLY WAS NOT USED SINCE WE HAVE A PRICING SERVICE WITH THE DISCOUNTS ALREADY TAKEN AND SHOWING THE NET FIGURES.

"FOR EXAMPLE, ITEM NO. 6, 1 - 6 BY 6 BY 5 CAST IRON SCREWED TEE WITH A LIST OF $14.00 AND A DISCOUNT OF PLUS 14 LESS 25-25 AND 25 PERCENT GIVING A NET PRICE OF $6.73 EACH.

"ON PAGE 2 OF OUR CONSOLIDATED LIST PRICE SHEET PF551, ENCLOSED YOU WILL FIND ALL LIST PRICES COVERING THE CAST IRON SCREWED FITTINGS. ON PAGE 5 ARE THE LIST PRICES FOR THE CAST IRON FLANGED FITTINGS WHICH SHOULD HAVE BEEN USED.

"ON OUR RESALE DISCOUNT SHEET 54-4R, THE DISCOUNT OF PLUS 14 WAS USED WITH A PREFERENTIAL OF 25-25 AND 25 PERCENT.

"WE WOULD LIKE TO WITHDRAW OUR FIRST QUOTATION AND SUBMIT A NEW QUOTATION COVERING ITEMS 6 THRU 26. I HOPE THIS WILL BE ENOUGH SUPPORTING EVIDENCE TO WITHDRAW OUR ORIGINAL PRICES.'

ON THE RECORD THERE IS LITTLE ROOM FOR DOUBT THAT THE COMPANY MADE THE ERROR AS ALLEGED. THE CONSOLIDATED LIST PRICE SHEET OF THE GRINNELL COMPANY ILLUSTRATES MATERIAL VARIATION IN PRICES FOR TEES AND ELBOWS WITH CAST IRON FLANGED FITTINGS AS COMPARED WITH THOSE OF CAST IRON SCREWED FITTINGS. FOR EXAMPLE, ITEM 21 CALLED FOR "ELBOWS 90 DEGREES-SIZE 3" WITH CAST IRON FLANGED FITTINGS. THE GRINNELL COMPANY'S PRICE LIST INDICATES A PRICE OF $9.40 PER UNIT FOR THIS ITEM WHEREAS THE SAME ITEM WITH CAST IRON SCREWED FITTINGS IS LISTED AT A PRICE OF $2.20 PER UNIT.

THE BASIC RULE IS THAT BIDS MAY NOT BE CHANGED AFTER THE TIME FIXED FOR OPENING. THE EXCEPTION TO THIS RULE, WHICH PERMITS CORRECTION OF A BID UPON SUFFICIENT EVIDENCE TO ESTABLISH THAT THE BIDDER ACTUALLY INTENDED TO BID AN AMOUNT OTHER THAN THAT SET FORTH IN THE BID OR THE CONTRACTING OFFICER IS ON NOTICE OF PROBABLE ERROR PRIOR TO ACCEPTANCE, DOES NOT EXTEND TO A RECALCULATION OR CHANGING OF A BID WITHOUT CONCLUSIVE PROOF AS TO THE AMOUNT INTENDED TO HAVE BEEN QUOTED IN THE BID. SEE 17 COMP. GEN. 575; 31 ID. 183 AND 35 ID. 279. IN THE PRESENT CASE THE GRINNELL COMPANY IS NOT MERELY PROPOSING TO CORRECT ITS ORIGINAL BID BUT RATHER IS PROPOSING TO SUBMIT AN ENTIRELY NEW BID ON ITEMS 6 THROUGH 26. FURTHERMORE, THE COMPANY STATES THAT A DISCOUNT OF "PLUS 14 WAS USED WITH A PREFERENTIAL OF 25-25 AND 25 PERCENT" IN COMPUTING THEIR BID PRICES ON THESE ITEMS BUT THERE IS NO INDICATION IN THE RECORD AS TO THE MANNER IN WHICH THESE FIGURES ARE TO BE APPLIED TO THE LIST PRICE.

IN THE CIRCUMSTANCES, THE BID OF THE GRINNELL COMPANY ON ITEMS 6 THROUGH 26 MAY NOT BE CORRECTED. HOWEVER, SINCE THE FACTS AND EVIDENCE ESTABLISH THAT THE BID OF THE COMPANY WAS IN ERROR, AND SINCE THE ERROR WAS ALLEGED AND EXPLAINED BY THE COMPANY PRIOR TO AWARD, THE BID OF THE GRINNELL COMPANY ON THOSE ITEMS MAY BE DISREGARDED WITHOUT FORFEITURE OF BID SECURITY.