B-136538, JUN. 27, 1958

B-136538: Jun 27, 1958

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VETERANS ADMINISTRATION HOSPITAL: REFERENCE IS MADE TO YOUR LETTER OF JUNE 20. BIDS WERE REQUESTED FOR FURNISHING BLOOD AS REQUIRED BY THE HOSPITAL DURING THE PERIOD BEGINNING JULY 1. ATTACHED TO THE CORPORATION'S BID WAS A LETTER DATED JUNE 11. IN WHICH IT WAS STATED. - "IF WE ARE AWARDED THE CONTRACT TO SUPPLY YOUR HOSPITAL WHOLE BLOOD (HUMAN). THE AVERAGE PRICE ON INVITATION NUMBER 59-6 IS $15.05 PER UNIT. WE ARE SUBMITTING A VOLUME DISCOUNT FOR YOUR CONSIDERATION. AVERAGE PRICE 3 PERCENT ON FIRST 100 UNITS 14.60 5 PERCENT ON SECOND 100 UNITS 14.30 10 PERCENT ON THIRD 100 UNITS 13.55 15 PERCENT ON FOURTH 100 UNITS 12.79 20 PERCENT ON FIFTH 100 UNITS 12.04 "PLEASE LET US HAVE YOUR COMMENTS ON THIS PROPOSAL AND ANY RECOMMENDATIONS THAT YOU MAY HAVE.'.

B-136538, JUN. 27, 1958

TO MR. ROBERT E. PETERSON, CHIEF SUPPLY DIVISION, VETERANS ADMINISTRATION HOSPITAL:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 20, 1958, FILE REFERENCE 5162- 134 INVITATION NO. 59-6, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH COMMUNITY BLOOD AND PLASMA SERVICE, INC. OF TEXAS, BIRMINGHAM, ALABAMA, ALLEGES IT MADE IN ITS BID OPENED ON JUNE 13, 1958.

BY INVITATION NO. 59-6, BIDS WERE REQUESTED FOR FURNISHING BLOOD AS REQUIRED BY THE HOSPITAL DURING THE PERIOD BEGINNING JULY 1, 1958, AND ENDING JUNE 30, 1959. IN RESPONSE COMMUNITY BLOOD AND PLASMA SERVICE, INC. OF TEXAS SUBMITTED A BID, IN PART, AS FOLLOWS:

CHART

QUANTITY "ITEM (NUMBER UNIT

NO. SUPPLIES OR SERVICES OF UNITS) UNIT PRICE AMOUNT

1. WHOLE BLOOD IN SUITABLE

CONTAINERS 1017 500CC15.00 $15,255.00

2. FRESH BLOOD IN PLASTIC

BAGS FOR PLATELET

PRESERVATION 8 500CC 18.00 144.00

3. FRESH BLOOD DRAWN IN

SILICONIZED BOTTLES

FOR BLEEDING CASES 6500CC 18.00 108.00

4. WASHED RED CELLS 4 500CC 18.00 72.00

TOTAL AGGREGATE BID ............................

$15,579.00"

---------- ATTACHED TO THE

CORPORATION'S BID WAS A LETTER DATED JUNE 11, 1958, IN WHICH IT WAS STATED---

"IF WE ARE AWARDED THE CONTRACT TO SUPPLY YOUR HOSPITAL WHOLE BLOOD (HUMAN), FOR THE FISCAL YEAR 1958, WE WOULD LIKE TO SUBMIT THE FOLLOWING PROPOSAL.

"WITH AN INCREASE IN YOUR VOLUME, WE COULD PASS A SUBSTANTIAL SAVINGS ON TO YOUR HOSPITAL IN DISCOUNT. THE AVERAGE PRICE ON INVITATION NUMBER 59-6 IS $15.05 PER UNIT. WE ARE SUBMITTING A VOLUME DISCOUNT FOR YOUR CONSIDERATION.

"THE FIRST 100 UNITS USED WOULD BE AT THE CONTRACT DISCOUNT (3) THREE PER CENT, AND AN ADDITIONAL 5 PERCENT FOR EACH HUNDRED UNITS THERE-AFTER, UP TO A TOTAL OF 20 PERCENT DISCOUNT ON 500 UNITS OR MORE. FOR EXAMPLE, IF YOU SHOULD USE 500 UNITS YOUR DISCOUNT WOULD BE COMPUTED AS FOLLOWS:

CHART

APPROX. AVERAGE

PRICE

3 PERCENT ON FIRST 100 UNITS 14.60

5 PERCENT ON SECOND 100 UNITS 14.30 10 PERCENT ON THIRD 100 UNITS 13.55 15 PERCENT ON FOURTH 100 UNITS 12.79 20 PERCENT ON FIFTH 100 UNITS 12.04

"PLEASE LET US HAVE YOUR COMMENTS ON THIS PROPOSAL AND ANY RECOMMENDATIONS THAT YOU MAY HAVE.'

IT IS NOTED FROM THE CORPORATION'S LETTER THAT IN COMPUTING THE VOLUME DISCOUNT, IT ALSO TOOK INTO CONSIDERATION THE QUANTITIES OF FRESH BLOOD AND RED CELLS REQUIRED UNDER ITEMS 2, 3 AND 4.

YOU STATE THAT A REPRESENTATIVE OF COMMUNITY BLOOD AND PLASMA SERVICE, INC. OF TEXAS WAS PRESENT AT THE BID OPENING AND THAT WHEN THE BIDS WERE OPENED, THE REPRESENTATIVE IMMEDIATELY ALLEGED THAT THE VOLUME DISCOUNT OFFERED BY THE CORPORATION WAS INTENDED TO APPLY ON THE FIRST, SECOND, THIRD, FOURTH AND FIFTH 100 UNITS PURCHASED EACH MONTH, ALTHOUGH THE CORPORATION'S LETTER OF JUNE 11, 1958, DID NOT SO INDICATE AND THAT SUBSEQUENTLY, ON THREE DIFFERENT OCCASIONS, THE VICE PRESIDENT OF THE CORPORATION HAS CONFIRMED HIS REPRESENTATIVE'S ASSERTION THAT IT WAS INTENDED FOR PURCHASES DURING ANY ONE MONTH DURING THE CONTRACT PERIOD. IT IS ALSO STATED THAT COMMUNITY BLOOD AND PLASMA SERVICE, INC. OF TEXAS IS THE LOW BIDDER, WITHOUT CONSIDERING THE VOLUME DISCOUNT OFFERED IN ITS LETTER OF JUNE 11, 1958.

IN A CONFIRMING LETTER DATED JUNE 19, 1958, IN WHICH IT REQUESTED THAT THE VOLUME DISCOUNT OFFERED BY IT BY CONSIDERED ON A MONTHLY BASIS, THE CORPORATION STATED THAT HAD IT INTENDED TO OFFER A VOLUME DISCOUNT ON THE TOTAL QUANTITY PURCHASED DURING THE ENTIRE YEAR, IT WOULD HAVE OFFERED ONLY ONE DISCOUNT AND NOT A GRADUATED SCALE OF DISCOUNTS AS OFFERED IN ITS LETTER OF JUNE 11, 1958.

YOU ALSO STATE THAT IT IS TRUE THAT THE CORPORATION HAS HAD THE CONTRACT WITH THE HOSPITAL FOR A NUMBER OF YEARS AND IS FAMILIAR WITH THE QUANTITIES OF BLOOD WHICH THE HOSPITAL PROCURES; AND THAT IT HAS BEEN ESTIMATED BY YOU THAT APPROXIMATELY 1,017 BOTTLES OF WHOLE BLOOD WOULD BE PROCURED DURING THE ENTIRE CONTRACT PERIOD, AND IT IS OBVIOUS, THEREFORE, WHAT THE VICE PRESIDENT HAD IN MIND.

IN VIEW OF THE FACT THAT THE CORPORATION HAS HELD THE PREVIOUS CONTRACTS FOR FURNISHING BLOOD TO THE HOSPITAL AND SINCE PARAGRAPH 5 OF THE SPECIAL CONDITIONS OF THE INVITATION PROVIDES THAT PAYMENT WILL BE MADE AT THE END OF EACH MONTH FOR THE AMOUNT OF BLOOD USED DURING THE MONTH, THERE ARE REASONABLE GROUNDS FOR THE BELIEF THAT THE CORPORATION INTENDED THAT THE VOLUME DISCOUNT ON BLOOD OFFERED BY IT BE CONSIDERED ON A MONTHLY BASIS. ACCORDINGLY, SINCE THE APPLICATION OF THE VOLUME DISCOUNT WAS PROMPTLY CLARIFIED AT THE BID OPENING BY THE CORPORATION'S REPRESENTATIVE, THE VOLUME DISCOUNT OFFERED BY THE CORPORATION MAY BE CONSIDERED AS A DISCOUNT ON ALL PURCHASES OF BLOOD MADE DURING ANY ONE MONTH.