B-141965, APR. 13, 1960

B-141965: Apr 13, 1960

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UNITED STATES ATOMIC EMERGY COMMISSION: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 8. WAS AWARDED. TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. HA-60-1048 WAS AWARDED TO THE GENERAL ELECTRIC COMPANY ON THE BASIS OF ITS LOW BID. A WORKSHEET ENCLOSED WITH THE LETTER APPEARS TO SUPPORT THE ALLEGATION THAT AN ERROR WAS MADE IN COMPUTING THE UNIT PRICE. IT IS REPORTED THAT. TO THE EXTENT THAT A BRAKE IS ADDED AND THE MOUNTING POSITION IS CHANGED. WHILE A SMALL INCREASE WAS INCLUDED IN THE PRICE MAKE-UP FOR THE CHANGED MOUNTING. THE CONTRACTOR STATES THAT THE UNIT NET PRICE OF THE 30 GEAR MOTORS OF $152.47 IS LESS THAN THE $161.96 QUOTED ON THE PROTOTYPE MOTOR BECAUSE AN INCREASED DISCOUNT WAS GIVEN FOR THE LARGE QUANTITY PURCHASE.

B-141965, APR. 13, 1960

TO THE HONORABLE JOHN A. MCCONE, CHAIRMAN, UNITED STATES ATOMIC EMERGY COMMISSION:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 8, 1960, WITH ENCLOSURES, FROM YOUR ASSISTANT GENERAL MANAGER FOR ADMINISTRATION, REQUESTING A DECISION RELATIVE TO AN ERROR IN BID ALLEGED BY THE GENERAL ELECTRIC COMPANY, PASCO, WASHINGTON, UPON WHICH CONTRACT NO. HA 60-1048 DATED SEPTEMBER 15, 1959, WAS AWARDED.

THE RECORD SHOWS THAT BY INVITATION FOR BIDS NO. 451-60-14 THE ATOMIC ENERGY COMMISSION, HANFORD OPERATIONS OFFICE, RICHLAND, WASHINGTON, REQUESTED QUOTATIONS FOR 30 STALLED ROTOR TORQUE GEAR MOTORS, EACH TO BE EQUIPPED WITH BRAKE. TWO BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. THE GENERAL ELECTRIC COMPANY, PASCO, WASHINGTON, SUBMITTED THE LOW BID, AMOUNTING TO $4,574.10 FOR THE 30 MOTORS REQUIRED, OR $152.47 PER UNIT. THE OTHER BIDDER QUOTED A UNIT PRICE OF $416, PLUS $300 TO COVER THE "CERTIFIED DATA" REQUIRED BY THE INVITATION, AMOUNTING TO A TOTAL BID OF $12,780. ON SEPTEMBER 15, 1959, CONTRACT NO. HA-60-1048 WAS AWARDED TO THE GENERAL ELECTRIC COMPANY ON THE BASIS OF ITS LOW BID.

BY LETTER DATED OCTOBER 21, 1959, THE CONTRACTOR ALLEGED A MISTAKE IN BID IN THAT IT FAILED TO INCLUDE IN ITS QUOTED UNIT PRICE AN AMOUNT TO COVER THE REQUIRED MOTOR BRAKE, AND REQUESTED AN INCREASE IN THE UNIT PRICE FROM $152.47 TO $198.39. A WORKSHEET ENCLOSED WITH THE LETTER APPEARS TO SUPPORT THE ALLEGATION THAT AN ERROR WAS MADE IN COMPUTING THE UNIT PRICE. IT IS REPORTED THAT, TO DATE, THE CONTRACTOR HAS DELIVERED 28 OF THE 30 UNITS ORDERED.

THE CONTRACTOR STATES THAT IT RECEIVED AN ORDER FOR A PROTOTYPE MOTOR, WITHOUT BRAKE, FROM THE SAME OFFICE WHICH IT SUPPLIED UNDER AN ORDER DATED NOVEMBER 18, 1958, AT A UNIT PRICE OF $161.96. THE SPECIFICATIONS ON THE PRESENT ORDER, TO THE EXTENT THAT A BRAKE IS ADDED AND THE MOUNTING POSITION IS CHANGED. WHILE A SMALL INCREASE WAS INCLUDED IN THE PRICE MAKE-UP FOR THE CHANGED MOUNTING, THE CONTRACTOR STATES THAT THE UNIT NET PRICE OF THE 30 GEAR MOTORS OF $152.47 IS LESS THAN THE $161.96 QUOTED ON THE PROTOTYPE MOTOR BECAUSE AN INCREASED DISCOUNT WAS GIVEN FOR THE LARGE QUANTITY PURCHASE, BUT THAT NOTHING WAS ADDED FOR THE BRAKE.

IN THE TRANSMITTAL LETTER FROM YOUR ASSISTANT GENERAL MANAGER, REFERRED TO ABOVE, IT IS STATED THAT ALTHOUGH THE CONTRACTOR'S QUOTATION FOR THE PRESENT ORDER IS SOMEWHAT LESS THAN ITS PRICE FOR THE SINGLE PROTOTYPE PREVIOUSLY PROCURED, THE ORDERING OFFICE IS UNABLE TO CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE DETECTED A POSSIBLE ERROR IN BID ON A 30- UNIT ORDER.

WE FIND NOTHING ON THE FACE OF THE LOW BID OF THE GENERAL ELECTRIC COMPANY, OR IN THE ATTENDANT CIRCUMSTANCES, THAT SHOULD HAVE INDICATED ANY NEED FOR FURTHER INQUIRY TOWARD ASCERTAINING THE CORRECTNESS OF SUCH LOW BID. THE SLIGHTLY LOWER PRICE QUOTED ON A LARGE QUANTITY ORDER FOR A MOTOR WITH A BRAKE IS NOT, IN OUR OPINION, SO OUT OF LINE WITH THE PREVIOUS PRICE FOR A PROTOTYPE MODEL WITHOUT BRAKE AS TO INDICATE AN OBVIOUS ERROR. NOR IS THE CONSIDERABLY HIGHER BID RECEIVED FROM THE ONLY OTHER BIDDER FOR THIS PROCUREMENT ANY REASON TO PLACE THE CONTRACTING OFFICER ON NOTICE, PARTICULARLY WHEN THE LOW BIDDER HAS OFFERED A PRICE IN LINE WITH THE PROTOTYPE MODEL WHICH IT HAD SUPPLIED PREVIOUSLY. SEE 20 COMP. GEN. 286.

IT IS CONCLUDED, THEREFORE, THAT THE LOW BID OF THE GENERAL ELECTRIC COMPANY WAS ACCEPTED IN GOOD FAITH. SUCH ACCEPTANCE, WE BELIEVE, CONSUMMATED A VALID CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES, AND WE ARE NOT AUTHORIZED TO WAIVE OR RELINQUISH ANY RIGHTS WHICH VESTED IN THE GOVERNMENT UNDER THAT CONTRACT.

ACCORDINGLY, YOU ARE ADVISED THAT WE FIND NO LEGAL BASIS FOR INCREASING BY ANY AMOUNT THE CONSIDERATION SPECIFIED IN CONTRACT NO. HA 60-1048, AWARDED TO THE GENERAL ELECTRIC COMPANY ON SEPTEMBER 15, 1959.