B-145208, APR. 4, 1961

B-145208: Apr 4, 1961

Additional Materials:

Contact:

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

 

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

VETERANS ADMINISTRATION CONSOLIDATED HOSPITAL: REFERENCE IS MADE TO YOUR LETTER (5234/134C) DATED FEBRUARY 27. BIDDERS WERE REQUIRED ACCORDANCE WITH VA PAMPHLET 10-19 REVISED. WAS DESCRIBED IN THE INVITATION. (IT IS CONTEMPLATED THAT AWARD WILL BE MADE ON EITHER GOOD OR CHOICE GRADE. THE ABSTRACT OF BIDS SHOWS THAT BIDS WERE RECEIVED ON ITEM NO. 15 AS FOLLOWS: TABLE GOOD GRADE CHOICE GRADE BIDDER UNIT PRICE UNIT PRICE ARMOUR AND COMPANY $0.8447 $0.9297 MAR MEAT COMPANY. INC. 1.29 1.55 HEIM BROTHER PACKING CO. 1.60 1.65 SWIFT AND COMPANY 1.649 1.749 BURNETT MEAT CO. 1.95 2.19 YOU STATE THAT AT THE TIME BIDS WERE OPENED IT WAS NOTED THE BID OF ARMOUR AND COMPANY WAS OBVIOUSLY LOW ON SOME ITEMS.

B-145208, APR. 4, 1961

TO THE CHIEF, SUPPLY DIVISION, VETERANS ADMINISTRATION CONSOLIDATED HOSPITAL:

REFERENCE IS MADE TO YOUR LETTER (5234/134C) DATED FEBRUARY 27, 1961, WITH ENCLOSURES, CONCERNING A MISTAKE WHICH ARMOUR AND COMPANY, LITTLE ROCK, ARKANSAS, ALLEGED IT MADE ON ITEM NO. 15 OF ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 61-50 ISSUED FEBRUARY 1, 1961.

THE INVITATION SOLICITED BIDS--- OPENING DATE 1:30 P.M., FEBRUARY 14, 1961--- FOR FURNISHING CERTAIN "PACKING HOUSE AND DAIRY PRODUCTS IN STANDARD SPECIFICATIONS, AS INDICATED WITHIN.' BIDDERS WERE REQUIRED ACCORDANCE WITH VA PAMPHLET 10-19 REVISED, EDITION OF JANUARY 1959, TO QUOTE A UNIT PRICE ON EACH ITEM BID UPON. ITEM NO. 15, HERE IN QUESTION, WAS DESCRIBED IN THE INVITATION, AS FOLLOWS:

"15. BEEF, PREFABRICATED RIB, BONELESS (FROZEN) GOOD GRADE.

OR

15. BEEF, PREFABRICATED RIB, BONELESS (FROZEN) CHOICE GRADE.

(IT IS CONTEMPLATED THAT AWARD WILL BE MADE ON EITHER GOOD OR CHOICE

GRADE, ITEM 15)"

IN THE QUANTITY OF 500 POUNDS, FOR DELIVERY TO THE CONSOLIDATED VA HOSPITAL, NORTH LITTLE ROCK DIVISION, NORTH LITTLE ROCK, ARKANSAS, ON MARCH 9, 1961.

THE ABSTRACT OF BIDS SHOWS THAT BIDS WERE RECEIVED ON ITEM NO. 15 AS FOLLOWS:

TABLE

GOOD GRADE CHOICE GRADE

BIDDER UNIT PRICE UNIT PRICE ARMOUR AND COMPANY $0.8447 $0.9297 MAR MEAT COMPANY, INC. 1.29 1.49 OAKLAND MEAT CO., INC. 1.29 1.55 HEIM BROTHER PACKING CO. 1.60

1.65 SWIFT AND COMPANY 1.649 1.749 BURNETT MEAT CO.

1.95 2.19

YOU STATE THAT AT THE TIME BIDS WERE OPENED IT WAS NOTED THE BID OF ARMOUR AND COMPANY WAS OBVIOUSLY LOW ON SOME ITEMS, ESPECIALLY ITEM "NO. 15, PREFABRICATED RIB.' THE VENDOR WAS CONTACTED BY MR. SHIRLEY, CHIEF, PROCUREMENT, BY TELEPHONE AT 11 A.M. ON FEBRUARY 15, 1961, FOR VERIFICATION OF ITS ENTIRE BID, AND AT THAT TIME MR. HOWARD, WHO PREPARED THE BID, ADVISED THAT HIS COMPANY'S BID ON ITEM NO. 15 WAS IN ERROR. MR. HOWARD EXPLAINED THAT WHEN HE RECEIVED PRICING FROM TWO OF THE COMPANY'S PLANTS THERE WAS A SPREAD OF $0.60 PER POUND, BUT THAT HE THOUGHT ,MAYBE THEY WERE LONG ON THE ITEM AND WANTED TO MOVE IT.' HE THEN ASKED IF THE COMPANY COULD WITHDRAW ITS BID, BUT HE WAS ADVISED BY MR. SHIRLEY THAT YOUR OFFICE DID NOT HAVE AUTHORITY TO DO THAT. MR. SHIRLEY THEN STATED THAT HE WOULD CHECK AND SEE IF THERE WAS ANY POSSIBILITY OF GETTING A DETERMINATION FROM THE AGENCY, BUT IT WAS HIS THOUGHT THAT DUE TO THE URGENCY OF THE NEED OF THE SUPPLIES THE COMPANY WOULD BE REQUIRED TO MAKE DELIVERY AND THE COMPANY COULD THEN BILL FOR THE PRICE BID, WITH A SEPARATE BILLING FOR THE PRICE IT INTENDED TO BID. MR. HOWARD THEN STATED THAT HE WOULD CALL THE COMPANY PLANT AND THAT HE WOULD LET MR. SHIRLEY KNOW PRIOR TO 2 P.M. IF THE COMPANY CLAIMED ERROR.

THE RECORD SHOWS THAT AT 1 P.M. OF THE SAME DAY MR. HOWARD TELEPHONED MR. SHIRLEY AND CONFIRMED THAT HIS COMPANY'S BID WAS IN ERROR AS TO ITEM NO. 15 AND THAT ALL OTHER ITEMS WERE ALL RIGHT. IN EXPLANATION OF THE ERROR, MR. HOWARD AT THAT TIME STATED "WE FURNISH ITEM 14 TO SOME INSTALLATIONS WHICH IS A ROLLED RIB NOT SQUARED OFF ON THE ENDS. THIS ITEM, OF COURSE, IS .40 CENTS PER POUND CHEAPER. EVIDENTLY THE PLANT PERSONNEL HAD IN MIND FURNISHING THIS ITEM AND DID NOT CAREFULLY CHECK YOUR BID.' MR. HOWARD WAS THEN ADVISED THAT THE COMPANY SHOULD MAKE DELIVERY OF ITEM NO. 15 AND SUBMIT SEPARATE BILLS, TOGETHER WITH NOTARIZED WORK PAPERS SUBSTANTIATING THE CLAIM OF ERROR; ALSO, THAT HE WOULD BE ADVISED SHORTLY BY TELEPHONE OF THE ITEMS AWARDED TO THE COMPANY AND OF AN ORDER NUMBER.

IN LETTER DATED FEBRUARY 22, 1961, SWORN AND SUBSCRIBED TO BEFORE A NOTARY PUBLIC, TO THE CHIEF, PURCHASE AND CONTRACT SECTION, SUPPLY DIVISION, MR. E. C. NORBUT, ASSISTANT SALES MANAGER, MEMPHIS PACKING COMPANY, DIVISION OF ARMOUR AND COMPANY, CONFIRMED THE COMPANY'S EARLIER ALLEGATION OF ERROR AND EXPLAINED THAT IN BIDDING ON ITEM NO. 15 "BEEF, FABRICATED RIB, BONELESS, FROZEN, U.S. GOOD," THROUGH ERROR ITS BID WAS BASED ON FURNISHING A "BONELESS, ROLLED AND TIED RIB U.S. GOOD.' STATED THAT THE COMPANY HAD ATTEMPTED EARLIER TO CORRECT THE ERROR BUT WAS TOLD THAT THE BID WAS ALREADY CLOSED. HE STATED THAT THE COMPANY HOPED THAT A CLAIM WAS IN ORDER BETWEEN THE AMOUNT OF ITS BID AND THE NEXT LOWEST BID.

THERE IS LITTLE, IF ANY, DOUBT THAT ARMOUR AND COMPANY MADE AN ERROR IN ITS BID ON ITEM NO. 15, AS ALLEGED. HOWEVER, IN CONNECTION WITH THE COMPANY'S REQUEST FOR ADJUSTMENT IN ITS BID PRICE, THE RECORD INDICATES THAT ITS UNIT BID PRICE ON ITEM NO. 15 "GOOD GRADE" SHOULD HAVE BEEN $0.40 HIGHER THAN THE "?8447" SHOWN ON ITS BID, OR $1.2447, AN AMOUNT LESS THAN THE NEXT LOW BID.

THE FACTS IN THIS CASE ARE CLOSELY ANALOGOUS TO THOSE IN THE CASE OF EDMUND J. RAPPOLI COMPANY, INC. V. UNITED STATES, 98 CT.CL. 499. SEE ALSO 38 COMP. GEN. 504 AND ID. 684.

IN VIEW OF THE FOREGOING, THE CONTRACT UNIT PRICE FOR ITEM NO. 15 MAY BE ADJUSTED TO $1.2447, RATHER THAN TO THE NEXT LOW BID OF $1.29 AS REQUESTED BY ARMOUR AND COMPANY, AND PAYMENT THEREOF, IN FULL SETTLEMENT OF ITS CLAIM BECAUSE OF THE ERROR AS ALLEGED, IS AUTHORIZED, IF OTHERWISE CORRECT.