B-144285, OCT. 27, 1960

B-144285, OCT. 27, 1960

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 19, 1960, AND ENCLOSURES, RELATIVE TO THE ERRORS ALLEGED TO HAVE BEEN MADE BY THE BOULEVARD FUEL OIL COMPANY IN THE PREPARATION OF ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS ISSUED ON JUNE 1, 1960, BY FEDERAL SUPPLY SERVICE, REGION 2, NEW YORK, NEW YORK. YOU REQUEST TO BE ADVISED WHETHER RELIEF PROPERLY MAY BE GRANTED, IN THE FORM OF CANCELLATION OF THE CONTRACT AND PAYMENT TO THE CONTRACTOR FOR INTERIM DELIVERIES OF FUEL OIL UNDER ITEMS NOS. 156 AND 157, AT A PRICE NOT TO EXCEED THE UNIT RATE OF THE LOWEST CORRECT BID RECEIVED. IF THE REQUESTED RELIEF IS AUTHORIZED, YOU STATE THAT THE REMAINING REQUIREMENTS FOR THE BALANCE OF THE PERIOD COVERED BY THE FEDERAL SUPPLY SCHEDULE WILL BE OBTAINED IN ACCORDANCE WITH USUAL PROCUREMENT PROCEDURES.

THE RECORD DISCLOSED THAT AFTER EVALUATION OF THE BIDS SUBMITTED, CONTRACT NO. GS-02S-18053 WAS AWARDED TO THE SAID COMPANY FOR ITEMS NOS. 156 AND 157, ON THE BASIS OF ITS QUOTATION OF ?0571 PER GALLON, THE LOWEST BID ON THOSE ITEMS COVERING FUEL OIL DELIVERIES TO BE MADE TO THE NAVAL SHIPYARD AT KEARNEY, NEW JERSEY. THEREAFTER, THE CONTRACTOR NOTIFIED THE PROCUREMENT AUTHORITIES THAT ITS QUOTATION WAS BASED ON THE FURNISHING OF NO. 6 OIL, INSTEAD OF "COLD NO. 5 OIL" AS STIPULATED IN THE INVITATION, AND THAT ITS CORRECT PRICE SHOULD HAVE BEEN ?0745, BASED UPON THE NEW YORK HARBOR TANK CAR PRICE AS POSTED MAY 3, 1960, IN THE NEW YORK JOURNAL OF COMMERCE.

THE ACTING CHIEF OF THE PROCUREMENT BRANCH CHARGED WITH THE RESPONSIBILITY TO OBTAIN THE SUPPLIES AND SERVICES REVIEWED THE FACTS AND CIRCUMSTANCES OF THE TRANSACTION INVOLVED, AND CONCLUDED THAT IN VIEW OF THE MATERIAL DIFFERENCE BETWEEN THE LOW BID FOR THIS COMMODITY AND THE OTHER PROPOSALS SUBMITTED, WHICH AMOUNTED TO 20 PERCENT OR MORE, THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF ERROR. IT IS ALSO STATED THAT CLEAR AND CONVINCING EVIDENCE OF THE MISTAKE HAS BEEN OFFERED. IT IS APPARENT FROM THE ADMINISTRATIVE REPORT THAT FAILURE TO DETECT THE ERROR DISCLOSED BY THE DISPARITY IN PRICES WAS AN OVERSIGHT ON THE PART OF THE PROCUREMENT OFFICIALS. THE RELATED FACTS AND CIRCUMSTANCES SUPPORT THE CONCLUSION THAT A BONA FIDE ERROR WAS MADE AS ALLEGED AND, IN THOSE CIRCUMSTANCES, OF COURSE VERIFICATION OF THE BID SHOULD HAVE BEEN REQUESTED BEFORE ACCEPTANCE.

IN VIEW THEREOF, CANCELLATION OF THE CONTRACT IS AUTHORIZED, AS YOU HAVE RECOMMENDED, AND PAYMENT MAY BE MADE TO THE CONTRACTOR FOR ANY OIL DELIVERED, AT A RATE EQUAL TO THE LOWEST CORRECT BID RECEIVED.

THE PAPERS AND DOCUMENTS TRANSMITTED WITH YOUR LETTER OF OCTOBER 19, 1960, ARE RETURNED HEREWITH, AS REQUESTED.