B-142480, APR. 19, 1960

B-142480: Apr 19, 1960

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO YOUR LETTER OF APRIL 1. BIDS WERE REQUESTED FOR FURNISHING AUTOMOBILES. THE UNIT PRICE WILL GOVERN.'. EACH SUBITEM THE BID WAS STATED TO BE BASED ON DELIVERY "FOB POINT OF ORIGIN KENOSHA. THE UNIT PRICE QUOTED ON SUBITEMS 2 THROUGH 27 WAS $1. THE UNIT PRICE WAS SHOWN AS $1. 542.83 BUT THE TOTAL PRICE AS EXTENDED FOR 20 UNITS WAS SHOWN AS $33. AWARD OF ALL SUBITEMS UNDER ITEM 6C WAS MADE TO AMERICAN MOTORS CORPORATION AS THE LOWEST BIDDER. AMERICAN MOTORS CORPORATION ALLEGED A TYPOGRAPHICAL ERROR IN ITS BID IN THAT THE UNIT PRICE IN SUBITEM 1 SHOULD HAVE BEEN $1. SINCE ALL SUBITEMS COVERED IDENTICAL STATION WAGONS AND THE BID WAS BASED ON DELIVERY OF ALL STATION WAGONS F.O.B.

B-142480, APR. 19, 1960

TO HONORABLE FRANKLIN FLOETE, ADMINISTRATOR, GENERAL SERVICES

ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 1, 1960, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER CONTRACT NO. GS-00S-30703 DATED DECEMBER 31, 1959, WITH AMERICAN MOTORS CORPORATION MAY BE AMENDED SO AS TO AUTHORIZE PAYMENT OF AN ADDITIONAL AMOUNT TO THE CONTRACTOR.

BY INVITATION NO. FN-3A-24400-A-12-2-59, BIDS WERE REQUESTED FOR FURNISHING AUTOMOBILES, STATION WAGONS AND TRUCKS DESCRIBED UNDER VARIOUS ITEMS AND SUBITEMS FOR DELIVERY TO SPECIFIED DESTINATIONS. PARAGRAPH 1 (C) OF THE "TERMS AND CONDITIONS OF THE INVITATION FOR BIDS" STATES: ,IN CASE OF ERROR IN EXTENSION OF PRICE, THE UNIT PRICE WILL GOVERN.'

IN RESPONSE TO THE INVITATION, AMERICAN MOTORS CORPORATION SUBMITTED ITS BID ON VARIOUS ITEMS, INCLUDING ITEM NO. 6C, SUBITEMS 1 THROUGH 27, WHICH COVERED 4-DOOR STATION WAGONS FOR DELIVERY AT VARIOUS DESTINATIONS. EACH SUBITEM THE BID WAS STATED TO BE BASED ON DELIVERY "FOB POINT OF ORIGIN KENOSHA, WISC.' THE UNIT PRICE QUOTED ON SUBITEMS 2 THROUGH 27 WAS $1,688.36. ON SUBITEM 1, HOWEVER, THE UNIT PRICE WAS SHOWN AS $1,542.83 BUT THE TOTAL PRICE AS EXTENDED FOR 20 UNITS WAS SHOWN AS $33,767.20. DECEMBER 31, 1959, AWARD OF ALL SUBITEMS UNDER ITEM 6C WAS MADE TO AMERICAN MOTORS CORPORATION AS THE LOWEST BIDDER, THE AWARD OF SUBITEM 1 BEING MADE ON THE BASIS OF THE UNIT PRICE OF $1,542.83 SHOWN ON THE BID.

IN ITS LETTER DATED JANUARY 12, 1960, AMERICAN MOTORS CORPORATION ALLEGED A TYPOGRAPHICAL ERROR IN ITS BID IN THAT THE UNIT PRICE IN SUBITEM 1 SHOULD HAVE BEEN $1,688.36 AS IN ALL OF THE OTHER SUBITEMS, SINCE ALL SUBITEMS COVERED IDENTICAL STATION WAGONS AND THE BID WAS BASED ON DELIVERY OF ALL STATION WAGONS F.O.B. KENOSHA. IN THE LETTER, ATTENTION WAS INVITED TO THE FACT THAT THE EXTENDED PRICE SHOWN ON THE BID FOR THE 20 UNITS COVERED BY SUBITEM 1 WAS COMPUTED AT THE CORRECT UNIT PRICE OF $1,688.36 INSTEAD OF $1,542.83 PER UNIT AS SHOWN ON THE BID AND THERE WAS ENCLOSED A COPY OF A WORKSHEET SHOWING PRICES APPROVED BY THE MANAGEMENT FOR ALL ITEMS, INCLUDING A UNIT PRICE FOR $1,688.36 FOR THE 129 UNITS COVERED BY ITEM NO. 6C.

IN VIEW OF THE FACTS OF THIS MATTER AS REPORTED AND SHOWN BY THE FILE, IT MAY BE REGARDED AS SATISFACTORILY ESTABLISHED THAT AMERICAN MOTORS CORPORATION MADE AN ERROR IN ITS BID ON SUBITEM 1 OF ITEM NO. 6C, AS ALLEGED AND EXPLAINED BY IT, INTENDING TO BID A UNIT PRICE OF $1,688.36 INSTEAD OF $1,542.83. ALSO, BECAUSE OF THE DISPARITY BETWEEN THE UNIT PRICE QUOTED BY AMERICAN MOTORS CORPORATION ON SUBITEM 1 AND THE PRICE QUOTED BY IT ON EACH OF THE OTHER SUBITEMS COVERING IDENTICAL STATION WAGONS, IT IS CONCLUDED THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION BEFORE MAKING AWARD, ESPECIALLY SINCE THE UNIT PRICE QUOTED ON SUBITEM 1 WAS INCONSISTENT WITH THE EXTENDED TOTAL PRICE SHOWN FOR THAT SUBITEM ON THE BID.

IN 36 COMP. GEN. 429, IT WAS HELD (QUOTING THE SYLLABUS):

"A BID WHICH CONTAINED AN APPARENT ERROR IN THE UNIT PRICE, ALTHOUGH THE TOTAL PRICE WAS BASED ON THE INTENDED UNIT PRICE, MAY BE CONSIDERED FOR AWARD ON THE BASIS OF THE TOTAL PRICE, EVEN THOUGH THE INVITATION PROVIDED THAT, IN THE CASE OF A DISCREPANCY BETWEEN THE UNIT AND TOTAL PRICE, THE UNIT PRICE WOULD PREVAIL.'

IN THAT CASE, THE DECISION RESULTED IN AN AWARD TO A BIDDER WHICH WOULD NOT HAVE RECEIVED THE AWARD IF ITS ERRONEOUS UNIT PRICE HAD BEEN USED IN EVALUATING ITS BID. IN THE INSTANT MATTER, AMERICAN MOTORS CORPORATION WAS LOW BIDDER ON SUBITEM 1 OF ITEM NO. 6C IRRESPECTIVE OF WHETHER ITS UNIT BID PRICE OR ITS EXTENDED BID PRICE IS REGARDED AS CONTROLLING.

FOR THE REASONS ABOVE SET FORTH, WE OFFER NO OBJECTION TO AMENDMENT OF THE CONTRACT SO AS TO PROVIDE FOR PAYMENT OF A UNIT PRICE OF $1,688.36 FOR STATION WAGONS FURNISHED UNDER SUBITEM 1 OF ITEM NO. 6C OF THE CONTRACT. REFERENCE TO THIS DECISION SHOULD ACCOMPANY THE PAYMENT VOUCHER.

THE PAPERS TRANSMITTED WITH YOUR LETTER OF APRIL 1, 1960, ARE RETURNED HEREWITH.