B-136130, JUN. 9, 1958

B-136130: Jun 9, 1958

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TO THE SECRETARY OF AGRICULTURE: REFERENCE IS MADE TO A LETTER DATED MAY 12. IS BASED. 000 TONS OF WHICH ARE TO BE DELIVERED AND DUMPED ON THE BANKS OF BUFFALO CREEK IN THE TOWN OF ELMA. 400 TONS OF WHICH ARE TO BE DELIVERED AND DUMPED ON THE BANKS OF EAST CAZENOVIA CREEK IN THE TOWN OF HOLLAND. THE CORPORATION'S AGGREGATE TOTAL BID PRICE FOR ITEMS 1 (A) AND 1 (B) IS $8. THE NEXT LOWEST BIDDER ON ITEM 1 (B) OFFERED A PROMPT PAYMENT DISCOUNT OF TWO PERCENT FOR PAYMENT WITHIN TEN DAYS AND IF SUCH DISCOUNT IS APPLIED TO ITS UNIT PRICE OF $2.75 PER TON. A NET PRICE OF $2.695 PER TON IS OBTAINED FOR THAT ITEM. ITEMS 1 (A) AND 1 (B) WERE AWARDED TO DUMP TRUCK SERVICE. THE UNIT PRICE AND EXTENDED TOTAL PRICE FOR ITEM 1 (B) WERE SHOWN AS BEING $2.30 AND $3.

B-136130, JUN. 9, 1958

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED MAY 12, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH DUMP TRUCK SERVICE, INC., BUFFALO, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 298-NY-SCS-58 DATED APRIL 18, 1958, IS BASED.

THE SOIL CONSERVATION SERVICE, SYRACUSE, NEW YORK, BY INVITATION NO. SCS- 7-NY-58, REQUESTED BIDS--- TO BE OPENED APRIL 17, 1958--- FOR FURNISHING 3,400 TONS OF STONE, RIPRAP, 2,000 TONS OF WHICH ARE TO BE DELIVERED AND DUMPED ON THE BANKS OF BUFFALO CREEK IN THE TOWN OF ELMA, NEW YORK, ITEM 1 (A), AND 1,400 TONS OF WHICH ARE TO BE DELIVERED AND DUMPED ON THE BANKS OF EAST CAZENOVIA CREEK IN THE TOWN OF HOLLAND, NEW YORK, ITEM 1 (B).

IN RESPONSE TO THE INVITATION, DUMP TRUCK SERVICE, INC., SUBMITTED A BID WHEREIN IT OFFERED TO DELIVER THE STONE UNDER ITEM 1 (A) AT A PRICE OF $2.40 PER TON FOR WHICH IT EXTENDED THE PRICE AS $4,800 AND TO DELIVER THE STONE UNDER ITEM 1 (B) AT A PRICE OF $2.30 PER TON FOR WHICH IT EXTENDED THE PRICE AS $3,780. ON THE BASIS OF THE EXTENDED TOTALS SHOWN IN ITS BID, THE CORPORATION'S AGGREGATE TOTAL BID PRICE FOR ITEMS 1 (A) AND 1 (B) IS $8,580. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDDERS ON ITEM 1 (A) QUOTED UNIT PRICES RANGING FROM $2.50 TO $3.60 PER TON AND THAT ON ITEM 1 (B), THE SAME BIDDERS QUOTED UNIT PRICES RANGING FROM $2.75 TO $4.70 PER TON. THE NEXT LOWEST BIDDER ON ITEM 1 (B) OFFERED A PROMPT PAYMENT DISCOUNT OF TWO PERCENT FOR PAYMENT WITHIN TEN DAYS AND IF SUCH DISCOUNT IS APPLIED TO ITS UNIT PRICE OF $2.75 PER TON, A NET PRICE OF $2.695 PER TON IS OBTAINED FOR THAT ITEM. ON APRIL 18, 1958, ITEMS 1 (A) AND 1 (B) WERE AWARDED TO DUMP TRUCK SERVICE, INC., AND IN PURCHASE ORDER NO. 298-NY-SCS-58, ISSUED ON THE SAME DAY, THE UNIT PRICE AND EXTENDED TOTAL PRICE FOR ITEM 1 (B) WERE SHOWN AS BEING $2.30 AND $3,780, RESPECTIVELY, THE SAME AMOUNTS AS SHOWN BY THE CORPORATION IN ITS BID FOR THAT ITEM.

IN THE LETTER OF MAY 12, 1958, IT IS STATED THAT ON APRIL 21, 1958, AFTER AWARD, THE CONTRACTING OFFICER NOTED IN THE BID OF DUMP TRUCK SERVICE, INC., THAT THE TOTAL PRICE OF $3,780 FOR ITEM 1 (B) WAS NOT THE CORRECT EXTENSION FOR 1,400 TONS OF STONE AT $2.30 PER TON; THAT THE CORPORATION WAS CONTACTED BY TELEPHONE FOR AN EXPLANATION; AND THAT IT ALLEGED THAT THE UNIT PRICE OF $2.30 FOR ITEM 1 (B) WAS A TYPOGRAPHICAL ERROR AND THAT THE CORRECT UNIT PRICE FOR THAT ITEM WAS $2.70 PER TON. IN A CONFIRMING LETTER DATED APRIL 21, 1958, DUMP TRUCK SERVICE, INC., ALLEGED THAT THE AMOUNT OF THE EXTENDED TOTAL FOR ITEM 1 (B) ESTABLISHES THAT IT WAS ITS INTENT TO QUOTE A UNIT PRICE OF $2.70 PER TON FOR THAT ITEM; AND THAT THE PRICE DIFFERENTIAL OF $0.30 PER TON BETWEEN THE PRICES FOR ITEMS 1 (A) AND 1 (B) IS DUE TO THE FACT THAT THE FIRST ITEM REQUIRES A 9-MILE HAUL WHEREAS THE SECOND ITEM REQUIRES A 19-MILE HAUL.

ERROR IS APPARENT ON THE FACE OF THE BID OF THE CORPORATION SINCE THE UNIT PRICE FOR THE ITEM WHEN MULTIPLIED BY THE QUANTITY SPECIFIED FOR THAT ITEM DOES NOT EQUAL THE AMOUNT INSERTED IN THE TOTAL AMOUNT COLUMN. THE INTENDED UNIT PRICE FOR THAT ITEM IS MULTIPLIED BY THE QUANTITY SPECIFIED, THE TOTAL WILL BE THE SAME AS SHOWN IN THE BID SUBMITTED. ALSO, IT IS NOTED THAT EACH OF THE THREE OTHER BIDDERS WHO QUOTED ON BOTH ITEMS 1 (A) AND 1 (B) QUOTED A HIGHER UNIT PRICE FOR ITEM 1 (B) THAN FOR ITEM 1 (B). IT SEEMS OBVIOUS THAT THE CORPORATION DID NOT INTEND TO QUOTE A LOWER PRICE FOR ITEM 1 (B) THAN FOR ITEM 1 (A), SINCE THE FORMER ITEM REQUIRES A LONGER HAUL. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT PARTIALLY ERASED FIGURES ON THE ORIGINAL BID OF DUMP TRUCK SERVICE, INC., SHOW QUITE CLEARLY THE PENCIL NOTATION "19 MI.' IN THE CIRCUMSTANCES, DUMP TRUCK SERVICE, INC., SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRIOR TO AWARD.

WHILE THE INVITATION TO BID PROVIDED THAT IN CASE OF ERROR IN EXTENSION UNIT PRICES WOULD GOVERN, AND WHILE IT HAS BEEN HELD THAT THERE IS NO DUTY UPON THE CONTRACTING OFFICER TO COMPUTE THE EXTENSIONS OF UNIT PRICES CONTAINED IN BIDS IN ORDER TO DETERMINE THE CORRECTNESS OF SUCH EXTENSIONS, THAT PRINCIPLE CLEARLY IS NOT FOR APPLICATION WHERE, AS HERE, AN ERROR IN UNIT PRICE IS APPARENT ON THE FACT OF THE BID AND THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF SUCH ERROR PRIOR TO AND AT THE TIME OF MAKING THE AWARD. SEE 15 COMP. GEN. 746.

ALTHOUGH THERE APPEARS NO ROOM FOR DOUBT THAT DUMP TRUCK SERVICE, INC., MADE AN ERROR IN INSERTING THE UNIT BID PRICE FOR ITEM 1 (B), IF THE BID BE CORRECTED TO REFLECT ITS INTENDED UNIT BID PRICE OF $2.70 PER TON, IT WILL NOT BE THE LOWEST BID RECEIVED ON THAT ITEM.

ACCORDINGLY, ITEM 1 (B) OR PURCHASE ORDER NO. 298-NY-SCS-58 MAY BE CANCELED WITHOUT LIABILITY TO THE CORPORATION.

THE PAPERS WHICH ACCOMPANIED THE LETTER OF MAY 12, 1958, ARE RETURNED AS REQUESTED.