B-141638, JAN. 19, 1960

B-141638, JAN. 19, 1960

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 4, 1960, REQUESTING A DECISION AS TO WHETHER CONTRACT NO. GS-00S-23144, DATED JUNE 25, 1959, WITH REVCO, INC., DEERFIELD, MICHIGAN, MAY BE REFORMED TO PERMIT PAYMENT OF AN AMOUNT IN ADDITION TO THE CONTRACT PRICE ON ONE OF THE THREE FREEZER UNITS REQUIRED FOR DELIVERY UNDER THE TERMS OF THE CONTRACT.

THE CONTRACT WAS AWARDED ON THE BASIS OF PRICES QUOTED BY THE CONTRACTOR UNDER ITEMS NO. 39, 40 AND 56 OF INVITATION FOR BIDS NO. FN 2J-21852-A-5- 29-59, ISSUED MAY 15, 1959, AS AMENDED. ON ITEMS NOS. 39 AND 40 THE CONTRACTOR QUOTED PRICES OF $1,265.15 AND $1,263.69 ON THE BASIS OF FURNISHING ITS MODEL SZH-653, CHEST-TYPE, SUB-ZERO FREEZER, 110 VOLT, 60 CYCLE, SINGLE PHASE, HAVING A TEMPERATURE RANGE TO A MINUS 85 DEGREES. HOWEVER, IN PERFORMING THE CONTRACT, IT WAS FOUND NECESSARY TO DELIVER FOR ITEM NO. 39 A MORE EXPENSIVE MODEL TO MEET THE SPECIFICATIONS FOR THAT ITEM. THE MODEL DELIVERED WAS SZC-657, DESCRIBED AS A CHEST-TYPE, SUB- ZERO FREEZER, 220 VOLT, 60 CYCLE, SINGLE PHASE, HAVING TEMPERATURE RANGES TO MINUS 125 AND MINUS 140 DEGREES, DEPENDING UPON ROOM TEMPERATURES. THE CONTRACTOR HAD BID A PRICE OF $3,050.93 ON ITS MODEL SZC-657 UNDER ITEM NO. 30 OF THE INVITATION, ALTHOUGH THAT ITEM CALLED FOR A FREEZER OF A DIFFERENT CAPACITY. AN ADJUSTMENT IN THE CONTRACT PRICE FOR ITEM NO. 39 WAS REQUESTED WHICH WOULD INCREASE SUCH PRICE TO $2,898.38, REPRESENTING A FIVE PERCENT REDUCTION IN THE PRICE QUOTED FOR THE SAME FREEZER UNDER ITEM NO. 30.

THE SPECIFICATIONS FOR ITEM NO. 39 WERE NOT SET FORTH IN THE ORIGINAL INVITATION AND, SINCE A FREEZER OF THE SAME CAPACITY WAS CALLED FOR UNDER ITEM NO. 40, WHICH REQUIRED THAT THE TEMPERATURE RANGE SHOULD BE TO A MINUS 85 DEGREES, THE CONTRACTOR ASSUMED THAT MODEL NO. SZH-653 WOULD MEET THE REQUIREMENTS OF BOTH ITEMS NOS. 39 AND 40.

HOWEVER, IT DEVELOPED THAT THE GOVERNMENT HAD MADE A MISTAKE IN REFERRING TO CERTAIN DETAILED SPECIFICATIONS AS BEING APPLICABLE TO ITEM NO. 30, AND THAT SUCH SPECIFICATIONS SHOULD HAVE BEEN MADE APPLICABLE TO ITEM NO. 39. THAT ERROR WAS CORRECTED BY SPECIAL NOTICE NO. 1, ISSUED MAY 25, 1959, WHICH ALSO ADDED VARIOUS ITEMS TO THE INVITATION FOR BIDS. PRIOR TO THAT NOTICE, THE CONTRACTOR HAD SUBMITTED ITS BID ON SEVERAL ITEMS, INCLUDING ITEMS NOS. 30, 39 AND 40, AND IT APPEARS THAT WHEN THE NOTICE WAS RECEIVED, IT WAS SIGNED AND RETURNED, SHOWING A BID ON ONE OF THE ADDITIONAL ITEMS (NO. 56). THE CONTRACTOR EVIDENTLY FAILED TO OBSERVE THE REFERENCES MADE TO THE SPECIFICATIONS FOR ITEM NO. 39, APPEARING AT THE BOTTOM OF PAGE 5 OF THE NOTICE FOLLOWING THE SPACES PROVIDED FOR THE BIDDER'S NAME, SIGNATURE AND DATE OF ACKNOWLEDGMENT OF RECEIPT OF SUCH NOTICE.

AS AMENDED, THE INVITATION REQUIRED THAT THE TEMPERATURE RANGE FOR THE FREEZER TO BE FURNISHED UNDER ITEM NO. 39 SHOULD BE FROM MINUS 60 TO MINUS 100 DEGREES; ALSO THAT THE UNIT ELECTRICAL REQUIREMENTS SHOULD BE 220/208 VOLTS, 60 CYCLE, SINGLE PHASE, WITH OVERLOAD PROTECTION AND HIGH-LOW PRESSURE CUT-OUTS. THESE WERE, IN EFFECT, THE ORIGINAL REQUIREMENTS FOR ITEM NO. 30, ALTHOUGH THE WORD "MINUS" WAS NOT USED WITH REFERENCE TO CERTAIN TEMPERATURE RATINGS. THE GOVERNMENT WAS PROPOSING TO PURCHASE SUB -ZERO FREEZERS AND IT IS APPARENT THAT THE ORIGINALLY STATED TEMPERATURE RANGE WOULD NORMALLY BE INTERPRETED AS REFERRING TO SUB-ZERO TEMPERATURES.

IT IS REPORTED THAT THE CONTRACTOR BECAME AWARE OF AN ERROR IN BID ON ITEM NO. 39 AFTER AWARD OF THE CONTRACT AND THAT, WITHOUT CONSULTING THE CONTRACTING OFFICER, ATTEMPTED TO MEET THE CONTRACT REQUIREMENTS BY MODIFYING ITS MODEL SZH-653. WHEN IT BECAME APPARENT THAT ADDITIONAL MODIFICATIONS WOULD BE SO TIME-CONSUMING THAT DELIVERY WOULD BE DELINQUENT, THE CONTRACTOR SHIPPED ITS MORE EXPENSIVE MODEL SZC-657, WHICH MET SPECIFICATIONS. CERTAIN DATA WAS REQUESTED CONCERNING WHAT THE COST OF CONVERSIONS WOULD HAVE BEEN IF TIME HAD PERMITTED THE MODEL SZH-653 TO BE CONVERTED TO MEET THE SPECIFICATIONS AND IT HAS BEEN DETERMINED ADMINISTRATIVELY THAT THE CLAIMED AMOUNT OF $2,898.38 WOULD REPRESENT A FAIR AND REASONABLE PRICE FOR THE MODEL FURNISHED. REVCO, INC., WAS THE ONLY BIDDER ON ITEM NO. 39, AND IT IS STATED THAT A BID OF $3,050.93 WOULD HAVE BEEN ACCEPTED FOR A FREEZER MEETING THE REQUIRED SPECIFICATIONS.

REVCO, INC., APPARENTLY DID NOT ORIGINALLY FURNISH INFORMATION CONCERNING THE TEMPERATURE RANGE OF ITS MODEL NO. SZH-653. HOWEVER, SUCH MODEL WAS DESCRIBED AS "110 VOLT - 60 CYCLE - SINGLE PHASE," ETC., WHEREAS THE SPECIFICATIONS PROVIDED FOR "220/208 VOLTS, 60 CYCLE, SINGLE PHASE; " AND IT APPEARS REASONABLE TO CONCLUDE, AS HAS BEEN SUGGESTED IN YOUR LETTER, THAT A MUTUAL ERROR OCCURRED IN AWARDING THE CHEAPER MODEL PROPOSED FOR ITEM NO. 39. IN OUR OPINION, THERE IS A CONSIDERABLE DOUBT AS TO WHETHER A FAILURE TO NOTICE THE FACT THAT THE ORIGINAL SPECIFICATIONS FOR ITEM NO. 30 WERE FINALLY MADE APPLICABLE TO ITEM NO. 39 WOULD HAVE AFFECTED IN ANY MANNER THE TERMS OF THE ORIGINAL BID WHICH OFFERED EITHER STANDARD OR SPECIAL TYPES OF EQUIPMENT AS ,EXCEPTIONS" RELATING TO MOST OF THE ITEMS FOR WHICH THE CONTRACTOR QUOTED PRICES UNDER THE INVITATION. IT WOULD SEEM THAT IT WOULD HAVE REMAINED FOR THE GOVERNMENT TO DETERMINE FROM AN EXAMINATION OF DESCRIPTIVE LITERATURE OR OTHERWISE WHETHER THE MODELS OFFERED WOULD SATISFY THE PARTICULAR REQUIREMENTS.

ACCORDINGLY, YOU ARE ADVISED THAT WE WOULD NOT BE REQUIRED TO OBJECT TO THE RECOMMENDED MODIFICATION OF THE CONTRACT WHEREBY PAYMENT OF THE AMOUNT OF $2,898.38 WOULD BE AUTHORIZED FOR THE FREEZER INVOLVED.