B-141475, DEC. 30, 1959

B-141475: Dec 30, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 11. PAGE NINE OF THE INVITATION LISTED CERTAIN FORMS WHICH WERE MADE A PART THEREOF AND STATED AS BEING ATTACHED THERETO. INCLUDED IN THE LIST OF FORMS WAS QMPA FORM 16 (9 MARCH 1959). WHICH WAS LISTED AS BEING ATTACHED TO THE INVITATION. CONTAINS PROVISIONS THAT THE AMOUNT OF FEDERAL TAXES IS TO BE INCLUDED IN THE BID PRICE. TWO BIDS WERE RECEIVED. THE LATTER BID SUBMITTED BY THE EASTERN MUSIC COMPANY WAS ACCEPTED ON JUNE 29. THE CONTRACTOR WAS ADVISED ON SEPTEMBER 23. THAT UNDER THE PROVISIONS OF QMPA FORM 16 ATTACHED TO THE INVITATION IT WAS WARNED THAT IT MUST INCLUDE SUCH A TAX IN ITS BID PRICE. THE PURCHASING OFFICE STATES THAT THE SIGNED COPY OF THE CONTRACTOR'S BID RETAINED IN THE CONTRACT FILE HAS ATTACHED TO IT QMPA FORM 16 WHICH "APPEARS TO HAVE BEEN FOLDED IN THE SAME MANNER AS THE BID FOR MAILING PURPOSES.'.

B-141475, DEC. 30, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 11, 1959, WRITTEN ON BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. DA 33-031-QM-21573 TO THE EASTERN MUSIC COMPANY ON JUNE 29, 1959.

THE QUARTERMASTER PURCHASING AGENCY, COLUMBUS GENERAL DEPOT AT COLUMBUS, OHIO, ISSUED AN INVITATION FOR BIDS--- TO BE OPENED JUNE 19, 1959--- FOR THE PURCHASE OF 100 FOLDING ORGANS, TO BE IN ACCORDANCE WITH THE SPECIFICATIONS AS SET OUT THEREIN. PAGE NINE OF THE INVITATION LISTED CERTAIN FORMS WHICH WERE MADE A PART THEREOF AND STATED AS BEING ATTACHED THERETO. INCLUDED IN THE LIST OF FORMS WAS QMPA FORM 16 (9 MARCH 1959), WHICH WAS LISTED AS BEING ATTACHED TO THE INVITATION, AND CONTAINS PROVISIONS THAT THE AMOUNT OF FEDERAL TAXES IS TO BE INCLUDED IN THE BID PRICE. TWO BIDS WERE RECEIVED, ONE IN THE AMOUNT OF $217.95 EACH AND THE OTHER IN THE AMOUNT OF $210 EACH. THE LATTER BID SUBMITTED BY THE EASTERN MUSIC COMPANY WAS ACCEPTED ON JUNE 29, 1959.

BY LETTER DATED SEPTEMBER 15, 1959, THE CONTRACTOR ALLEGED THAT ITS BID PRICE OF $210 PER UNIT DID NOT INCLUDE THE FEDERAL EXCISE TAX APPLICABLE TO THE SUPPLIES AND IT REQUESTED THAT IT BE FURNISHED WITH AN EXEMPTION CERTIFICATE TO COVER THE TAX. THE CONTRACTOR WAS ADVISED ON SEPTEMBER 23, 1959, THAT UNDER THE PROVISIONS OF QMPA FORM 16 ATTACHED TO THE INVITATION IT WAS WARNED THAT IT MUST INCLUDE SUCH A TAX IN ITS BID PRICE. IN A SUBSEQUENT LETTER DATED OCTOBER 21, 1959, THE CONTRACTOR HAS DENIED THAT IT HAD ANY KNOWLEDGE OF THE PROVISIONS OF THE FORM ATTACHED TO THE INVITATION WITH REGARD TO THE REQUIREMENT THAT THE AMOUNT OF FEDERAL TAXES SHOULD BE INCLUDED IN THE AMOUNT OF THE BID. THE PURCHASING OFFICE STATES THAT THE SIGNED COPY OF THE CONTRACTOR'S BID RETAINED IN THE CONTRACT FILE HAS ATTACHED TO IT QMPA FORM 16 WHICH "APPEARS TO HAVE BEEN FOLDED IN THE SAME MANNER AS THE BID FOR MAILING PURPOSES.' THIS FACT WOULD INDICATE THAT THE CONTRACTOR OR ITS SUPPLIER OVERLOOKED THIS TAX PROVISION IN COMPUTING THE BID PRICE. NO WORKSHEET IN SUPPORT OF THE INTENDED BID PRICE HAS BEEN FURNISHED. HOWEVER, THE CONTRACTOR HAS SUBMITTED A SIGNED STATEMENT FROM ITS SUPPLIER THAT ITS UNIT PRICE IS $198.91, PLUS 10 PERCENT FEDERAL EXCISE TAX, OR $218.80.

WHETHER QMPA FORM 16 WAS ACTUALLY ATTACHED TO THE INVITATION IS IMMATERIAL SINCE THE CONTRACTOR WAS ON NOTICE THAT THIS FORM WAS MADE A PART OF THE INVITATION, AND THEREFORE A PART OF ANY RESULTING CONTRACT, AND IF IT CHOSE TO BID WITHOUT ASCERTAINING THE PROVISIONS OF THIS FORM, IT DID SO AT ITS OWN RISK.

IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER HAD ANY ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF THE MISTAKE IN BID PRIOR TO AWARD, AND HE HAS MADE A STATEMENT TO THIS EFFECT. IT FOLLOWS THEREFORE THAT THE BID WAS ACCEPTED IN GOOD FAITH AND SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR INCREASING THE CONTRACT PRICE OR RELIEVING THE CONTRACTOR FROM ITS OBLIGATION TO PERFORM THE CONTRACT.