B-136424, JUN. 25, 1958

B-136424, JUN. 25, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JUNE 10, 1958, FILE REFERENCE R11.2 L4-1 L4/NT4-3, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH NATIONAL GYPSUM COMPANY, BUFFALO, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. N189-39615A WAS AWARDED.

THE NAVAL SUPPLY CENTER, PURCHASING DEPARTMENT, NORFOLK, VIRGINIA, BY INVITATION NO. IFB-189-595-58 REQUESTED BIDS--- TO BE OPENED APRIL 28, 1958--- FOR FURNISHING A QUANTITY OF ASBESTOS CEMENT ROOFING SHINGLES. RESPONSE THE NATIONAL GYPSUM COMPANY SUBMITTED A BID OFFERING TO FURNISH THE ROOFING SHINGLES AT A PRICE OF $13.20 PER SQUARE.

IN HIS REPORT OF JUNE 3, 1958, THE CONTRACTING OFFICER STATES THAT WHEN THE BIDS WERE EXAMINED IT WAS NOTED THAT THE BID OF THE NATIONAL GYPSUM COMPANY WAS POSSIBLY IN ERROR BECAUSE IT WAS OUT OF LINE WITH THE TWO OTHER RESPONSIVE BIDS RECEIVED IN THE AMOUNTS OF $21.03 AND $23.26 PER SQUARE AND, THEREFORE, THE COMPANY WAS REQUESTED TO CONFIRM ITS BID PRICE AND THAT THE MATERIAL IT PROPOSED TO FURNISH WAS IN STRICT ACCORDANCE WITH THE SPECIFICATIONS.

IN A CONFIRMING LETTER DATED MAY 12, 1958, THE COMPANY STATED---

"IN CONFORMANCE WITH YOUR REQUEST, WE HEREBY CONFIRM THAT OUR BID PRICE OF $13.20 PER SQUARE ON THE SUBJECT INVITATION AND BID COVERS SIDING, MARKED, PACKED AND PACKAGED FOR EXPORT SHIPMENT IN ACCORDANCE WITH FEDERAL SPECIFICATIONS SS-S-291C.'

IT IS REPORTED THAT THE WORD "SIDING" APPEARING IN THE COMPANY'S BID CONFIRMATION LETTER WAS INADVERTENTLY OVERLOOKED AND THAT SINCE THE COMPANY HAD CONFIRMED ITS BID PRICE AS BEING CORRECT, CONTRACT NO. N189- 39615A WAS AWARDED TO THE COMPANY ON MAY 19, 1958.

IN A LETTER DATED MAY 23, 1958, IN WHICH IT REQUESTED THAT THE CONTRACT BE CANCELLED, THE NATIONAL GYPSUM COMPANY STATED---

"THE SUBJECT BID WAS MADE UNDER PRESSURE BECAUSE OF THE TIME FACTOR IN ENTERING THE BID AT A TIME WHEN WE WERE EXTREMELY BUSY. THIS WAS UNDOUBTEDLY THE PRIME FACTOR IN OUR ENTERING A BID ON A SIDING PRICE. SUPPORT OUR ADVICE THAT WE ENTERED THIS BID BASED ON SIDING PRICES IN THE HONEST BUT ERRONEOUS BELIEF THAT WE WERE BIDDING ON SIDING, WE ARE SUBMITTING THE FOLLOWING FACTS FOR YOUR CONSIDERATION:

"1. WE DO NOT MANUFACTURE THE "5 SIDED TRIANGLE" TYPE OF ASBESTOS CEMENT ROOFING STIPULATED IN THE INVITATION.

"2. WE DESIGNATED MILLINGTON, NEW JERSEY AS THE PLACE OF MANUFACTURE. MAKE SIDING BUT NOT ROOFING AT MILLINGTON.

"3. ON PAGE NO. 3 OF OUR BID, WE FURNISHED AN ESTIMATED WEIGHT OF 26,070 LBS. FOR 158 SQUARES. THIS WOULD BE THE CORRECT WEIGHT OF 158 SQUARES OF SIDING. 158 SQUARES OF ROOFING WOULD BE SUBSTANTIALLY HEAVIER.

"4. WE NORMALLY SHIP ASBESTOS-CEMENT ROOFING ONLY INTO OUR NEW ORLEANS SHIPPING AREA WHICH DOES NOT EXTEND TO NORFOLK, VIRGINIA.

"5. WE ARE ATTACHING CURRENT SIDING AND ROOFING PRICE LISTS AND A COPY OF OUR WORKSHEET SHOWING THAT OUR CALCULATIONS WERE BASED ON THE SIDING DISTRIBUTOR PRICE OF $11.75 PER SQUARE LESS THE 2 PERCENT CASH DISCOUNT, OR $11.51 PER SQUARE.'

IN HIS REPORT, IN WHICH HE RECOMMENDED CANCELLATION OF THE CONTRACT, THE CONTRACTING OFFICER STATED THAT IN CONNECTION WITH THE ESTIMATED WEIGHT OF 26,070 POUNDS FOR THE MATERIAL PROPOSED TO BE FURNISHED BY THE NATIONAL GYPSUM COMPANY, THE ESTIMATED WEIGHTS AS SHOWN IN THE BID SUBMITTED BY THE OTHER BIDDERS RANGED FROM 46,610 POUNDS TO 49,000 POUNDS AND THAT IT IS OBVIOUS THAT AN ERROR WAS MADE IN AWARDING THE CONTRACT TO THE NATIONAL GYPSUM COMPANY SINCE ITS BID CONFIRMATION LETTER INDICATES THAT ITS BID WAS BASED ON FURNISHING SIDING SHINGLES AND NOT ROOFING SHINGLES AS REQUIRED BY THE INVITATION.

THE RECORD INDICATES THAT HAD THE CONTRACTING OFFICER PROPERLY READ THE COMPANY'S BID CONFIRMATION LETTER, HE WOULD NOT HAVE MADE THE AWARD TO THE COMPANY. THE CONTRACT INVOLVED MAY ACCORDINGLY BE CANCELLED WITHOUT LIABILITY TO THE COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF JUNE 3, 1958, ARE RETURNED.