B-141568, JAN. 11, 1960

B-141568: Jan 11, 1960

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 24. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY OHIO MACHINERY COMPANY TO HAVE BEEN MADE IN ITS QUOTATION SUBMITTED IN RESPONSE TO A REQUEST FOR QUOTATION ISSUED ON JUNE 25. NO OTHER QUOTATIONS WERE RECEIVED. THE DESTINATION OF A PORTION OF THE SUPPLIES WAS CHANGED BUT THE CONTRACT REMAINED OTHERWISE UNCHANGED. O.I.634-60Q WAS ISSUED TO OHIO MACHINERY COMPANY. STATING THAT THE CORRECT PRICE WAS $6.35 INSTEAD OF $2.35 PER UNIT AND REQUESTING AMENDMENT OF THE PURCHASE ORDER. THAT THE ERRONEOUS QUOTATION RESULTED FROM A TYPOGRAPHICAL ERROR WHICH WAS NOT DISCOVERED UNTIL THE INVOICE WAS BEING PREPARED FOR BILLING.

B-141568, JAN. 11, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 24, 1959, WITH ENCLOSURES, FROM THE OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY OHIO MACHINERY COMPANY TO HAVE BEEN MADE IN ITS QUOTATION SUBMITTED IN RESPONSE TO A REQUEST FOR QUOTATION ISSUED ON JUNE 25, 1959, BY THE QUARTERMASTER PURCHASING AGENCY, COLUMBUS GENERAL DEPOT, COLUMBUS, OHIO, FOR THE PURCHASE OF 58 CATERPILLAR PARTS NO. 2-B-1902, TO BE SHIPPED TO THREE DESTINATIONS.

IN RESPONSE TO THE REQUEST, OHIO MACHINERY COMPANY SUBMITTED A QUOTATION OF $2.35 PER UNIT, A TOTAL PRICE OF $136.30. NO OTHER QUOTATIONS WERE RECEIVED. BY MODIFICATION NO. 1 DATED AUGUST 23, 1959, THE DESTINATION OF A PORTION OF THE SUPPLIES WAS CHANGED BUT THE CONTRACT REMAINED OTHERWISE UNCHANGED. ON JULY 24, 1959, PURCHASE ORDER NO. O.I.634-60Q WAS ISSUED TO OHIO MACHINERY COMPANY, WHICH SHIPPED THE SUPPLIES ON AUGUST 21, 1959.

BY ITS LETTER DATED AUGUST 24, 1959, THE CONTRACTOR ALLEGED AN ERROR IN ITS QUOTATION, STATING THAT THE CORRECT PRICE WAS $6.35 INSTEAD OF $2.35 PER UNIT AND REQUESTING AMENDMENT OF THE PURCHASE ORDER. IT ALSO ENCLOSED A COPY OF THE CATERPILLAR PRICING MEDIUM WHICH SHOWS THE LIST PRICE OF THE PARTS TO BE $6.35 EACH. THE CONTRACTOR STATED IN A LETTER DATED SEPTEMBER 3, 1959, THAT THE ERRONEOUS QUOTATION RESULTED FROM A TYPOGRAPHICAL ERROR WHICH WAS NOT DISCOVERED UNTIL THE INVOICE WAS BEING PREPARED FOR BILLING. TRANSMITTED WITH THE LETTER WAS A CERTIFICATE BY AN EMPLOYEE OF THE CONTRACTOR STATING THAT HE MADE THE TYPOGRAPHICAL ERROR WHEN THE QUOTATION WAS SUBMITTED.

IN A SUPPLEMENTAL REPORT DATED OCTOBER 7, 1959, THE CONTRACTING OFFICER STATED THAT THE PROCUREMENT DIRECTIVE RECEIVED FROM RICHMOND QUARTERMASTER DEPOT CONTAINED AN ESTIMATED COST OF $4.85 EACH BUT THAT THIS ESTATE WAS NOT REGARDED AS SIGNIFICANT SINCE EXPERIENCE HAD SHOWN THAT SUCH ESTIMATED PRICES ARE NOT USUALLY ACCURATE.

IN VIEW OF THE FACTS OF THE MATTER AS REPORTED AND SHOWN BY THE FILE, IT MAY BE REGARDED AS SATISFACTORILY ESTABLISHED THAT OHIO MACHINERY COMPANY MADE A BONA FIDE ERROR IN ITS QUOTATION AS ALLEGED AND EXPLAINED BY IT AND THAT THE INTENDED QUOTATION WAS IN THE AMOUNT OF $6.35 PER UNIT. APPEARS OBVIOUS THAT THE COMPANY WOULD NOT INTENTIONALLY QUOTE A PRICE LESS THAN HALF OF THE COST OF THE SUPPLIES. THE FACT THAT THE QUOTATION WAS IN THE AMOUNT OF $2.35PER UNIT AND THE LIST PRICE WAS $6.35 PER UNIT TENDS TO SUPPORT THE CONTRACTOR'S EXPLANATION THAT THE MISTAKE RESULTED FROM A TYPOGRAPHICAL ERROR.

ALTHOUGH ONLY ONE QUOTATION WAS RECEIVED AND THE CONTRACTING OFFICER HAD NOT PREVIOUSLY PURCHASED SIMILAR ARTICLES, IT IS BELIEVED THAT HE SHOULD HAVE REQUESTED VERIFICATION BEFORE MAKING THE AWARD SINCE THE ESTIMATED COST FURNISHED TO HIM BY THE RICHMOND QUARTERMASTER DEPOT WAS IN THE AMOUNT OF $4.85 PER UNIT--- MORE THAN DOUBLE THE AMOUNT OF OHIO MACHINERY COMPANY'S QUOTATION. MOREOVER, IT WOULD SEEM UNCONSCIONABLE TO REQUIRE THE CONTRACTOR TO FURNISH THE ARTICLES AT THE BID PRICE WHICH APPARENTLY IS LESS THAN HALF OF THE ACTUAL COST TO THE CONTRACTOR.

THE FACT THAT OHIO MACHINERY COMPANY EXECUTED THE REFERRED-TO MODIFICATION OF THE CONTRACT, MERELY CHANGING THE DESTINATION OF A PORTION OF THE SUPPLIES, IS NOT SUFFICIENT TO PREVENT RELIEF OF THE CONTRACTOR, SINCE THE ERROR HAD NOT THEN BEEN DISCOVERED AND THE QUOTED PRICE WAS NOT CONSIDERED AT THAT TIME.

FOR THE REASONS ABOVE SET FORTH, WE OFFER NO OBJECTION TO PAYMENT OF $6.35 PER UNIT TO THE CONTRACTOR AS REQUESTED. REFERENCE TO THIS DECISION SHOULD BE MADE ON THE PAYMENT VOUCHER.