B-144300, NOV. 4, 1960

B-144300: Nov 4, 1960

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED OCTOBER 18. THE SECOND LOW BID WAS IN THE AMOUNT OF $70.50 EACH AND 16 OTHER BIDS WERE RECEIVED WHICH RANGED FROM $129.44 TO $440.14 EACH. THE GOVERNMENT ESTIMATE WAS $149 EACH. CONFIRMED ITS UNIT BID PRICE OF $66.71 AND THEREAFTER THE BID WAS ACCEPTED. UNDER WHICH NO DELIVERIES HAVE BEEN MADE. IT IS REPORTED THAT AN INADEQUATE PREAWARD SURVEY WAS MADE IN THE FIRST INSTANCE AND THAT UPON SUBSEQUENT INVESTIGATION IT HAS BEEN DETERMINED THAT THE CORPORATION'S WINDING EQUIPMENT CAN ONLY PRODUCE PIECES OF WAVEGUIDES IN MAXIMUM LENGTHS OF 10 FEET INSTEAD OF THE 23 FOOT LENGTHS REQUIRED. THE CONTRACTING OFFICER ORDINARILY WOULD BE UNDER NO OBLIGATION TO MAKE FURTHER INQUIRY AS TO THE CORRECTNESS OF THE BID PARTICULARLY SINCE THE SECOND LOW BID WAS ONLY $70.50.

B-144300, NOV. 4, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 18, 1960, WITH ENCLOSURES, FORWARDED IN BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY FOR LOGISTICS, BY THE OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING OUR DECISION AS TO WHETHER CONTRACT NO. DA-01 021-ORD-12013 MAY BE CANCELED IN VIEW OF THE DISCLOSURE AFTER AWARD OF AN ERROR IN THE RELATED BID.

THE TELERAD MANUFACTURING CORPORATION SUBMITTED A LOW BID OF $66.71 EACH FOR THE 150 WAVEGUIDES SPECIFIED UNDER INVITATION NO. IDP-X-ORD-01 021-60- 10290, ISSUED ON MARCH 7, 1960, BY THE ARMY ORDNANCE MISSILE COMMAND, REDSTONE ARSENAL, ALABAMA. THE SECOND LOW BID WAS IN THE AMOUNT OF $70.50 EACH AND 16 OTHER BIDS WERE RECEIVED WHICH RANGED FROM $129.44 TO $440.14 EACH. THE GOVERNMENT ESTIMATE WAS $149 EACH. IN RESPONSE TO A TELEPHONIC REQUEST, THE TELERAD MANUFACTURING CORPORATION, BY LETTER DATED APRIL 20, 1960, CONFIRMED ITS UNIT BID PRICE OF $66.71 AND THEREAFTER THE BID WAS ACCEPTED. SUBSEQUENTLY, THE CORPORATION ADVISED THE DEPARTMENT OF THE ARMY BY LETTER DATED MAY 23, 1960, THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT IT HAD MISREAD ONE OF THE DRAWINGS AS REQUIRING WAVEGUIDES 23 INCHES IN LENGTH INSTEAD OF THE SPECIFIED LENGTH OF 23 FEET. THE CORPORATION REQUESTS THAT THE CONTRACT, UNDER WHICH NO DELIVERIES HAVE BEEN MADE, BE CANCELED.

IT IS REPORTED THAT AN INADEQUATE PREAWARD SURVEY WAS MADE IN THE FIRST INSTANCE AND THAT UPON SUBSEQUENT INVESTIGATION IT HAS BEEN DETERMINED THAT THE CORPORATION'S WINDING EQUIPMENT CAN ONLY PRODUCE PIECES OF WAVEGUIDES IN MAXIMUM LENGTHS OF 10 FEET INSTEAD OF THE 23 FOOT LENGTHS REQUIRED.

AFTER THE CORPORATION VERIFIED ITS BID OF $66.71 EACH FOR THE WAVEGUIDES, THE CONTRACTING OFFICER ORDINARILY WOULD BE UNDER NO OBLIGATION TO MAKE FURTHER INQUIRY AS TO THE CORRECTNESS OF THE BID PARTICULARLY SINCE THE SECOND LOW BID WAS ONLY $70.50. HOWEVER, THE BID WAS COMPLETELY OUT OF LINE WITH 16 OF THE 17 OTHER BIDS RECEIVED AND WITH THE GOVERNMENT'S ESTIMATE FOR THE EQUIPMENT. UNDER SUCH CIRCUMSTANCES, WE BELIEVE THAT THERE WAS AMPLE REASON, AS INDICATED BY THE SUCCESSOR CONTRACTING OFFICER IN THE REPORT OF JULY 6, 1960, FOR THE CONTRACTING OFFICER TO HAVE REQUESTED FURTHER CLARIFICATION OF THE MATTER PRIOR TO AWARD AND TO HAVE FURTHER INVESTIGATED THE BIDDER'S CAPABILITIES. MOREOVER, THERE CAN BE NO DOUBT FROM THE AMOUNT OF THE BID ITSELF AND FROM THE EXPLANATION IN THE CORPORATION'S LETTER DATED AUGUST 31, 1960, AND ENCLOSURE, THAT THE TELERAD MANUFACTURING CORPORATION MADE AN ERROR IN ITS BID, AS ALLEGED.

IN VIEW OF THE FOREGOING, AND SINCE ENFORCEMENT OF THE CONTRACT WOULD BE INEQUITABLE WE WILL NOT OBJECT TO A CANCELLATION OF CONTRACT NO. DA-01-021 -ORD-12013 IN THIS PARTICULAR CASE WITHOUT OBLIGATION TO THE TELERAD MANUFACTURING CORPORATION.

THE PAPERS, WITH THE EXCEPTION OF THE NEW YORK ORDNANCE DISTRICT'S COMMUNICATION DATED JULY 6, 1960, AND THE LETTER DATED AUGUST 31, 1960, AND ENCLOSURE, FROM THE TELERAD MANUFACTURING CORPORATION, ARE RETURNED HEREWITH.