B-142385, MAR. 31, 1960

B-142385: Mar 31, 1960

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UNITED STATES ATOMIC ENERGY COMMISSION: REFERENCE IS MADE TO A LETTER DATED MARCH 24. TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 401-60-26C. IT IS REPORTED THAT THE REACTERS ARE BEING PROCURED FOR THE USE OF THE COMMISSION'S CONTRACTOR. A REPRESENTATIVE OF THE HYDRODYNE CORPORATION MENTIONED THE POSSIBILITY THAT ITS BID WAS IN ERROR BY REASON OF BEING BASED ON FURNISHING MATERIALS OTHER THAN THAT SPECIFIED IN THE INVITATION. THAT THE ABOVE ADVICE WAS TRANSMITTED TO THE CONTRACTING OFFICER BY THE COMMISSION'S CONTRACTOR. THE CONTRACTING OFFICER ADVISED THE CORPORATION BY TELEGRAM THAT IF IT WAS ALLEGING AN ERROR IN ITS BID IT SHOULD SUBMIT A WRITTEN STATEMENT EXPLAINING SUCH ERROR AND EVIDENCE IN SUPPORT THEREOF.

B-142385, MAR. 31, 1960

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

REFERENCE IS MADE TO A LETTER DATED MARCH 24, 1960, WITH ENCLOSURES, FROM THE GENERAL MANAGER, ATOMIC ENERGY COMMISSION, CONCERNING AN ERROR ALLEGED BY THE HYDRODYNE CORPORATION, NORTH HOLLYWOOD, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 401-60-26C, ISSUED BY THE ATOMIC ENERGY COMMISSION, OAK RIDGE OPERATIONS OFFICE, OAK RIDGE, TENNESSEE, AND OPENED ON FEBRUARY 12, 1960.

THE INVITATION REQUESTED, UNDER ITEM 1, QUOTATIONS FOR 6 UNITS, 14 UNITS AND 80 UNITS OF SIX-INCH REACTORS, ROLLED AND WELDED PLATE CONSTRUCTION, TO BE FABRICATED IN ACCORDANCE WITH THE DRAWING NO. B-M 22158D. THE DRAWING CALLED FOR FABRICATION OF THE REACTORS FROM STAINLESS STEEL BUT THE INVITATION DELETED THE TABLE OF MATERIALS ON THE DRAWING AND SUBSTITUTED THEREFOR MATERIALS MADE OF HAYNES STALLITE ALLOY X (MASTALLOY ALLOY X). IT IS REPORTED THAT THE REACTERS ARE BEING PROCURED FOR THE USE OF THE COMMISSION'S CONTRACTOR, UNION CARBIDE NUCLEAR COMPANY. RESPONSE TO THE INVITATION, THE HYDRODYNE CORPORATION SUBMITTED A BID DATED FEBRUARY 5, 1960, OFFERING TO FURNISH THE REACTORS UNDER ITEM 1 AT PRICES OF $501.49 EACH, $452.99 EACH, AND $382.42 EACH FOR LOTS OF 6, 14, AND 80 UNITS, RESPECTIVELY. THE ABSTRACT OF BIDS SHOWS THAT FOR THE LOT OF 6 REACTORS UNDER ITEM 1, THE 11 OTHER BIDDERS THEREON QUOTED PRICES RANGING FROM $550 EACH TO $2,169.89 EACH.

THE RECORD INDICATES THAT DURING A TELEPHONE CONVERSATION WITH THE COMMISSION'S CONTRACTOR, UNION CARBIDE NUCLEAR COMPANY, A REPRESENTATIVE OF THE HYDRODYNE CORPORATION MENTIONED THE POSSIBILITY THAT ITS BID WAS IN ERROR BY REASON OF BEING BASED ON FURNISHING MATERIALS OTHER THAN THAT SPECIFIED IN THE INVITATION; THAT THE ABOVE ADVICE WAS TRANSMITTED TO THE CONTRACTING OFFICER BY THE COMMISSION'S CONTRACTOR; AND THAT BY TELEGRAM DATED FEBRUARY 24, 1960, THE CONTRACTING OFFICER REQUESTED THE CORPORATION TO VERIFY ITS BID IN ALL RESPECTS. BY TELEGRAM DATED FEBRUARY 29, 1960, THE CORPORATION SUBMITTED A REVISED QUOTATION ON ITEM 1 BASED ON THE USE OF HAYNES ALLOY X MATERIAL IN WHICH IT QUOTED PRICES OF $720.49 EACH, $656.98 EACH, AND $595.43 EACH FOR LOTS OF 6, 14, AND 80 UNITS, RESPECTIVELY. SUBSEQUENTLY, THE CONTRACTING OFFICER ADVISED THE CORPORATION BY TELEGRAM THAT IF IT WAS ALLEGING AN ERROR IN ITS BID IT SHOULD SUBMIT A WRITTEN STATEMENT EXPLAINING SUCH ERROR AND EVIDENCE IN SUPPORT THEREOF.

IN A LETTER DATED MARCH 3, 1960, THE CORPORATION STATED THAT ITS BID PRICE FOR THE REACTORS WAS ERRONEOUS IN THAT IT WAS BASED ON THE USE OF STAINLESS STEEL MATERIAL AS CALLED FOR BY DRAWING NO. B-M 22158D; THAT THE STAINLESS STEEL ON WHICH ITS BID PRICE WAS BASED COST $0.80 TO $0.90 PER POUND, WHEREAS THE HAYNES ALLOY X MATERIAL, REQUIRED BY THE INVITATION COST $2.44 PER POUND; AND THAT IN ADDITION TO THE PRICE DIFFERENTIAL, MACHINING OF HAYNES ALLOY X REQUIRES MORE TIME THEREBY INCREASING THE COST OF MANUFACTURE.

ON THE RECORD, THERE IS NO ROOM FOR REASONABLE DOUBT THAT THE CORPORATION MADE AN ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, SINCE THE ERROR WAS ALLEGED AND EXPLAINED PRIOR TO AWARD, THE BID OF THE HYDRODYNE CORPORATION AS TO ITEM 1 MAY BE DISREGARDED IN MAKING THE AWARD.