B-145505, JUN. 21, 1961

B-145505: Jun 21, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED MARCH 31. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY RAWAY SALES TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63069-1510 IS BASED. RAWAY'S BID WAS ACCEPTED AS TO ITEMS 15. ITS ACTUAL BIDS WERE: TABLE ITEM 15 5. 734.06 THE CONTRACT AS AWARDED WAS $1. IT IS APPARENT THEREFORE THAT THE CONTRACTING OFFICER CORRECTED THE ERRONEOUSLY EXTENDED PRICE ON ITEM 15 BEFORE MAKING THE AWARD. THE CONTRACTING OFFICER WAS AWARE THAT THERE WAS AN ERROR EITHER IN THE UNIT PRICE OR THE EXTENSION AND SHOULD NOT HAVE FOLLOWED THE "UNIT PRICE GOVERNS" RULE WITHOUT VERIFICATION. SINCE THE CONTRACTING OFFICER NOTED THE DISCREPANCY BETWEEN THE UNIT PRICE AND THE EXTENDED PRICE HE WAS ON NOTICE OF ERROR.

B-145505, JUN. 21, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED MARCH 31, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY RAWAY SALES TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63069-1510 IS BASED.

THE CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SHIPYARD, PHILADELPHIA, PENNSYLVANIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS PARTS OF AIRCRAFT. RAWAY'S BID WAS ACCEPTED AS TO ITEMS 15, 47, AND 49. ITS ACTUAL BIDS WERE:

TABLE

ITEM 15 5,950 AT .161 $1,265.41

ITEM 47 550 AT .34 187.00

ITEM 49 215 AT 1.31 281.65

$1,734.06

THE CONTRACT AS AWARDED WAS $1,426.60, WHICH INDICATES THAT THE CONTRACTING OFFICER IN MAKING THE AWARD USED THE PRICE OF $0.161 EACH FOR 5,950 UNITS ON ITEM 15.

IT IS APPARENT THEREFORE THAT THE CONTRACTING OFFICER CORRECTED THE ERRONEOUSLY EXTENDED PRICE ON ITEM 15 BEFORE MAKING THE AWARD. CONSEQUENTLY, THE CONTRACTING OFFICER WAS AWARE THAT THERE WAS AN ERROR EITHER IN THE UNIT PRICE OR THE EXTENSION AND SHOULD NOT HAVE FOLLOWED THE "UNIT PRICE GOVERNS" RULE WITHOUT VERIFICATION.

WE BELIEVE THAT ACCEPTANCE OF THE BID DID NOT BIND RAWAY AT THE UNIT PRICE OF $0.161 ON ITEM 15 UNDER THE FACTS HERE. SINCE THE CONTRACTING OFFICER NOTED THE DISCREPANCY BETWEEN THE UNIT PRICE AND THE EXTENDED PRICE HE WAS ON NOTICE OF ERROR. WHILE THE INVITATION DID PROVIDE THAT IN CASE OF ERROR, THE UNIT PRICE WOULD GOVERN, THIS OFFICE HOLDS THE VIEW THAT SUCH PROVISION CAN BE APPLIED ONLY WHEN THE DIFFERENCE BETWEEN THE UNIT PRICE AND EXTENDED PRICE IS RELATIVELY MINOROR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. SEE 37 COMP. GEN. 829.

ACCORDINGLY, ITEM 15 OF THE CONTRACT MAY BE CANCELLED AS RECOMMENDED BY THE CONTRACTING OFFICER. A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.