B-142794, MAY 23, 1960

B-142794: May 23, 1960

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER R11.2 OF MAY 4. ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT N665S- 47964 IS BASED. 651.57 PRICE EXCESSIVE BECAUSE HE THOUGHT THE TOTAL WORTH INCLUDED IN THE DESCRIPTION OF THE PROPERTY WAS AN ESTIMATE AND AS SUCH MIGHT NOT HAVE BEEN REALISTIC. HE MADE THE AWARD TO THE HIGH BIDDER WHO PROMPTLY UPON RECEIPT OF NOTICE OF AWARD ALLEGED A TYPOGRAPHICAL ERROR IN ITS BID IN THAT THE PRICE SHOULD HAVE BEEN $651.57. AN INVESTIGATION WAS CONDUCTED WHICH ESTABLISHED THAT THE $939.15 AMOUNT STATED IN THE DESCRIPTION OF ITEM 37 WAS THE GOVERNMENT ACQUISITION COST. HE WOULD HAVE KNOWN THAT IT WAS CORRECT AND SHOULD HAVE THEN SUSPECTED THE PROBABILITY OF ERROR IN THE BID EXCEEDING THE GOVERNMENT'S ACQUISITION COST BY MORE THAN 75 PERCENT AND AFFORDED THE BIDDER AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO ACCEPTANCE.

B-142794, MAY 23, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER R11.2 OF MAY 4, 1960, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION REGARDING AN ERROR L. F. GARBERT AND CO., NEW ORLEANS, LOUISIANA, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT N665S- 47964 IS BASED.

IN RESPONSE TO SALES INVITATION B-102-60-665, L. F. GAUBERT AND CO. SUBMITTED A LOT PRICE BID OF $1,651.57 FOR THE PURCHASE OF ITEM 37 DESCRIBED AS:

"ELECTRIC CABLE, CONSISTING OF APPROXIMATELY 10,435 FT SINGLE CONDUCTOR, STRANDED, AWG NOT AVAILABLE, COPPER, INSULATED. MFR PLASTOID CORP. UNUSED, GOOD. REELS. TOTAL: $939.15. EST GROSSWT: 5500 LB. * * *.'

THE OTHER SIX BIDS FOR THAT ITEM RANGED FROM $133.80 TO $939.15. THE CONTRACTING OFFICER REPORTS THAT HE DID NOT CONSIDER THE $1,651.57 PRICE EXCESSIVE BECAUSE HE THOUGHT THE TOTAL WORTH INCLUDED IN THE DESCRIPTION OF THE PROPERTY WAS AN ESTIMATE AND AS SUCH MIGHT NOT HAVE BEEN REALISTIC. THEREFORE, HE MADE THE AWARD TO THE HIGH BIDDER WHO PROMPTLY UPON RECEIPT OF NOTICE OF AWARD ALLEGED A TYPOGRAPHICAL ERROR IN ITS BID IN THAT THE PRICE SHOULD HAVE BEEN $651.57. THEREAFTER, AN INVESTIGATION WAS CONDUCTED WHICH ESTABLISHED THAT THE $939.15 AMOUNT STATED IN THE DESCRIPTION OF ITEM 37 WAS THE GOVERNMENT ACQUISITION COST.

WHERE A BID SO FAR EXCEEDS THE LIST PRICE OF A SALE ITEM AND THE CONTRACTING OFFICER DOUBTS THE ACCURACY OF THE LIST PRICE, IN ALL FAIRNESS TO BIDDERS AND IN ORDER TO MAKE A COMPLETE AND PROPER EVALUATION OF BIDS, HE SHOULD VERIFY THE LIST PRICE BEFORE MAKING AN AWARD. HAD HE UNDERTAKEN TO ASCERTAIN THE AUTHENTICITY OF THE PRICE IDENTIFIED WITH THE ITEM, HE WOULD HAVE KNOWN THAT IT WAS CORRECT AND SHOULD HAVE THEN SUSPECTED THE PROBABILITY OF ERROR IN THE BID EXCEEDING THE GOVERNMENT'S ACQUISITION COST BY MORE THAN 75 PERCENT AND AFFORDED THE BIDDER AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO ACCEPTANCE.

IN THE CIRCUMSTANCES, IT IS APPARENT THAT THE BIDDER MADE AN ERROR AS ALLEGED AND ITEM 37 SHOULD BE CANCELED FROM THE CONTRACT AWARDED WITHOUT LIABILITY TO THE COMPANY.