B-140881, OCT. 16, 1959

B-140881: Oct 16, 1959

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DESTINATION PRICE SUBMITTED BY THAT FIRM ON ITEM NO. 14 FOR GRAPHITE OF A PARTICULAR TYPE WAS $0.2467. INTERNATIONAL GRAPHITE WAS REQUESTED TO VERIFY ITS BID PRICE ON ITEM NO. 14. THE CONTRACTING OFFICER WAS ADVISED THAT THE PRICE SUBMITTED WAS IN ERROR AND THAT THE INTENDED PRICE WAS $0.3492. INTERNATIONAL GRAPHITE SHOWED THAT THE BID PRICE HAD BY INADVERTENCE BEEN COPIED FROM THE WRONG LINE OF THEIR REGULAR PRICE LIST AND THAT THE PRICE ON THE LIST FOR THE ITEM BID ON WAS THE CORRECTED PRICE LESS SHIPPING COST. IT WAS FOUND THAT A FEW MONTHS EARLIER THE FIRM HAD SUBMITTED A BID ON THE IDENTICAL ITEM AT THE SAME PRICE AS CORRECTED (LESS SHIPPING COSTS SINCE THE EARLIER BID WAS SUBMITTED ON AN F.O.B.

B-140881, OCT. 16, 1959

TO THE HONORABLE JOHN A. MCCONE, CHAIRMAN, ATOMIC ENERGY COMMISSION:

WE REFER TO A LETTER OF SEPTEMBER 26, 1959, WITH ENCLOSURE, SIGNED BY THE DEPUTY GENERAL MANAGER, RECOMMENDING THAT AN INCREASE OF $4,264 IN THE PRICE OF CONTRACT NO. AT-/40-1/-2601 REQUESTED BY THE CONTRACTOR BE AUTHORIZED.

THE INTERNATIONAL GRAPHITE AND ELECTRODE DIVISION, SPEAR CARBON COMPANY, SUBMITTED A BID IN RESPONSE TO VARIOUS ITEMS IN INVITATION NO. 401-60-04C ISSUED JULY 9, 1959, BY THE COMMISSION'S OAK RIDGE OPERATIONS OFFICE. THE F.O.B. DESTINATION PRICE SUBMITTED BY THAT FIRM ON ITEM NO. 14 FOR GRAPHITE OF A PARTICULAR TYPE WAS $0.2467. THIS PRICE APPEARED UNUSUALLY LOW IN RELATION TO THE PRICES OFFERED BY THE BIDDER ON THE OTHER ITEMS AS COMPARED TO THE DIFFERENCES IN PRICES BETWEEN ITEM NO. 14 AND THE OTHER ITEMS OFFERED BY OTHER BIDDERS. THIS COMPARISON ALERTED THE CONTRACTING OFFICER TO THE POSSIBILITY OF ERROR. ACCORDINGLY, AFTER OPENING BUT PRIOR TO AWARD, INTERNATIONAL GRAPHITE WAS REQUESTED TO VERIFY ITS BID PRICE ON ITEM NO. 14. IN REPLY, THE CONTRACTING OFFICER WAS ADVISED THAT THE PRICE SUBMITTED WAS IN ERROR AND THAT THE INTENDED PRICE WAS $0.3492.

IN SUBSTANTIATION OF THE ALLEGATION OF ERROR, INTERNATIONAL GRAPHITE SHOWED THAT THE BID PRICE HAD BY INADVERTENCE BEEN COPIED FROM THE WRONG LINE OF THEIR REGULAR PRICE LIST AND THAT THE PRICE ON THE LIST FOR THE ITEM BID ON WAS THE CORRECTED PRICE LESS SHIPPING COST. FURTHER, IT WAS FOUND THAT A FEW MONTHS EARLIER THE FIRM HAD SUBMITTED A BID ON THE IDENTICAL ITEM AT THE SAME PRICE AS CORRECTED (LESS SHIPPING COSTS SINCE THE EARLIER BID WAS SUBMITTED ON AN F.O.B. ORIGIN BASIS).

IT WAS CONCLUDED ON THE BASIS OF THE EVIDENCE PRESENTED THAT THE ERROR AND THE INTENDED BID PRICE HAD BEEN CONCLUSIVELY ESTABLISHED. SEE 14 COMP. GEN. 78. THEREFORE, THE PRICE WAS CONSIDERED AS INTENDED, WHICH MADE IT AN EQUAL LOW BID WITH THAT OF ANOTHER FIRM. AWARD FOR ITEM NO. 14 AS WELL AS A NUMBER OF OTHER ITEMS WAS MADE TO INTERNATIONAL GRAPHITE UPON A DRAWING OF LOTS. HOWEVER, THE CONTRACT PRICE FOR ITEM NO. 14 WAS FIXED AT THAT ORIGINALLY BID SUBJECT TO CORRECTION.

SINCE THE ERROR AND INTENDED BID PRICE WERE ALLEGED AND CONCLUSIVELY PROVED PRIOR TO AWARD, THE CONTRACT MAY BE AMENDED TO INCREASE THE PRICE BY THE DIFFERENCE BETWEEN THE ORIGINAL BID PRICE ON ITEM NO. 14 AND THE INTENDED PRICE FOR THAT ITEM. SEE B-129582, OCTOBER 30, 1956; B-136112, JUNE 2, 1958.