B-146264, AUG. 18, 1961

B-146264: Aug 18, 1961

Additional Materials:

Contact:

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

 

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

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 27. THREE OF THE CONDENSING UNITS COVERED BY ITEM 1A ARE TO BE DELIVERED F.O.B. WHILE THE BALANCE OF SEVEN CONDENSING UNITS COVERED BY ITEM 1B ARE TO BE DELIVERED F.O.B. ATTACHED TO THE BID OF THE CORPORATION WAS PAGE NO. WHICH IS THE SPECIFICATION SHEET FOR HILL SEMI-HERMETIC "R" MODEL AIR COOLED AND AIR WATER COOLED CONDENSING UNITS. THIS UNIT IS EQUIPPED WITH A SEMI-HERMETIC COPELAND MOTOR COMPRESSOR ASSEMBLY. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 1A AND 1B ON MARCH 30. THE CORPORATION ALSO STATED THAT IF IT WAS NOT POSSIBLE TO INCREASE THE UNIT PRICE OF THE CONDENSING UNITS TO COVER THE COST OF THE ACCESSORIES.

B-146264, AUG. 18, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 27, 1961, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION AS TO WHETHER THERE MAY BE GRANTED THE RELIEF SOUGHT BY C. V. HILL AND COMPANY, INC., UNDER UNNUMBERED CONTRACT (ORDER NO. O.I. 9411-61Q) DATED MARCH 30, 1961.

THE QUARTERMASTER PURCHASING AGENCY, COLUMBUS GENERAL DEPOT, U.S. ARMY, COLUMBUS, OHIO, BY INVITATION NO. QM 33-031-61-285, REQUESTED BIDS FOR FURNISHING TEN CONDENSING UNITS CONFORMING TO MILITARY SPECIFICATION MIL-R -10137C DATED JUNE 22, 1956, AND A DEVIATION LIST CONSISTING OF TEN PAGES DATED DECEMBER 16, 1959, AS AMENDED BY THE INVITATION. THREE OF THE CONDENSING UNITS COVERED BY ITEM 1A ARE TO BE DELIVERED F.O.B. DESTINATION, FORT EUSTIS, VIRGINIA, WHILE THE BALANCE OF SEVEN CONDENSING UNITS COVERED BY ITEM 1B ARE TO BE DELIVERED F.O.B. ORIGIN. IN RESPONSE C. V. HILL AND COMPANY, INC., SUBMITTED A BID DATED MARCH 3, 1961, OFFERING TO FURNISH THE CONDENSING UNITS UNDER ITEM 1A AT A UNIT PRICE OF $216.50 AND THE CONDENSING UNITS UNDER ITEM 1B AT A UNIT PRICE OF $225.50. IN ITS BID THE CORPORATION MADE THE FOLLOWING NOTATION "HILL MODEL R-100-C (SEE PAGE NO. CU-3).' ATTACHED TO THE BID OF THE CORPORATION WAS PAGE NO. CU-3, WHICH IS THE SPECIFICATION SHEET FOR HILL SEMI-HERMETIC "R" MODEL AIR COOLED AND AIR WATER COOLED CONDENSING UNITS. THE CORPORATION ALSO ATTACHED TO ITS BID A LETTER DATED MARCH 3, 1961, WHICH READS, IN PERTINENT PART, AS FOLLOWS:

"WE PROPOSE TO SUPPLY OUR STANDARD HILL TYPE CONDENSING UNITS. THIS UNIT IS EQUIPPED WITH A SEMI-HERMETIC COPELAND MOTOR COMPRESSOR ASSEMBLY. THE ATTACHED SPECIFICATION SHEET GIVES COMPLETE INFORMATION.'

THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 1A AND 1B ON MARCH 30, 1961.

BY LETTER DATED MAY 10, 1961, THE CORPORATION ADVISED THAT IT HAD LEARNED THAT THE SPECIFICATIONS FOR THE ORDER CALLED FOR VARIOUS REFRIGERATION ACCESSORIES WHICH, IT STATED, HAD NOT BEEN INCLUDED IN ITS BID PRICE; THAT AT THE TIME IT SUBMITTED ITS QUOTATION IT CLEARLY STATED IN THE COVERING LETTER THAT IT PROPOSED TO FURNISH ITS STANDARD HILL CONDENSING UNITS; AND THAT IT INCLUDED WITH ITS QUOTATION CERTAIN SPECIFICATION SHEETS AND THAT THESE SHEETS DEFINITELY DO NOT COVER ANY DETAILS OF THE REFRIGERATION ACCESSORIES. THE CORPORATION STATED THAT IT COULD NOT FURNISH THE CONDENSING UNITS AND ACCESSORIES AT THE PRICE QUOTED AND THAT IT WOULD BE NECESSARY FOR IT TO INCREASE THE UNIT PRICE BY THE SUM OF $69.75 TO COVER THE COST OF A CONTROL PANEL, SIGHT GLASS, DRIER ASSEMBLY AND A VIBRATION ELIMINATOR. THE CORPORATION ALSO STATED THAT IF IT WAS NOT POSSIBLE TO INCREASE THE UNIT PRICE OF THE CONDENSING UNITS TO COVER THE COST OF THE ACCESSORIES, THAT THE CONTRACT BE CANCELLED. IN A LETTER DATED MAY 24, 1961, THE CORPORATION REITERATED ITS ALLEGATION THAT ITS BID PRICE ONLY COVERED ITS STANDARD UNIT. WITH ITS LETTER THE CORPORATION SUBMITTED ITS WORKSHEETS, WHICH APPEAR TO BE PAGES FROM THE INVITATION. THE CORPORATION ALSO SUBMITTED ITS PRICE PAGE CU-27, WHICH SHOWS THE PRICE OF A ONE- HORSEPOWER UNIT. NO MENTION OF ANY ACCESSORIES IS MADE ON THIS PRICE PAGE. ALSO, THERE WAS SUBMITTED A COPY OF PAGE CU-24, WHICH OUTLINES THE SPECIFICATIONS OF THE CONTROL PANEL, SIGHT GLASS, DRIER ASSEMBLY AND VIBRATION ELIMINATOR. THE PRICES FOR THESE ACCESSORIES ARE SHOWN ON PRICE PAGE CU-32.

THE INVITATION PROVIDES THAT THE CONDENSING UNITS ARE TO CONFORM TO MILITARY SPECIFICATION MIL-R-10137C, PARAGRAPH 3.3.12.1 OF WHICH PROVIDES AS FOLLOWS:

"CONDENSING UNIT SHALL BE PROVIDED COMPLETE WITH MOTOR, AIR-COOLED CONDENSER, RECEIVER, COMPRESSOR, LIQUID LINE SIGHT GLASS AND OTHER NECESSARY ACCESSORIES ALL MOUNTED IN A RESILIENT MANNER ON A COMMON BASE AND CONTAINING AN OPERATING CHARGE OF THE MANUFACTURER'S RECOMMENDED REFRIGERANT OIL. * * *"

PARAGRAPH 3 OF THE ADDITIONAL TERMS AND CONDITIONS OF THE INVITATION FOR BIDS PROVIDES AS FOLLOWS:

"WHERE DETAILED SPECIFICATIONS ARE SHOWN IN THE BID SOLICITATION, ANY REFERENCE BY BIDDER TO BRAND OR TRADE NAMES OR MODEL NUMBERS WILL BE ASSUMED TO MEAN THAT THE ITEM SO REFERENCED CONFORMS TO SPECIFICATIONS OR WILL BE MODIFIED TO CONFORM TO SPECIFICATIONS. DELIVERIES UNDER ANY CONTRACT AWARDED WILL BE REQUIRED IN ACCORDANCE WITH GOVERNMENT SPECIFICATIONS CITED IN THE BID SOLICITATION. (QMCPI 7-105-50).'

WE DO NOT FEEL THAT THE CORPORATION OFFERED TO FURNISH OTHER THAN SPECIFICATION CONDENSING UNITS WITHIN THE PURVIEW OF THE ABOVE-QUOTED PARAGRAPH. AND WE CANNOT HOLD, UNDER THE CIRCUMSTANCES HERE INVOLVED, THAT THE CORPORATION BY FURNISHING WITH ITS BID THE SPECIFICATIONS FOR ITS STANDARD MODEL AND THE LETTER IN QUESTION, AFFIRMATIVELY "STATED" THAT IT WAS OFFERING OTHER THAN SPECIFICATION EQUIPMENT. NO MENTION WAS MADE BY THE CORPORATION IN ITS LETTER OF MARCH 3, 1961, THAT THE CONDENSING UNITS WOULD NOT BE EQUIPPED WITH THE REQUIRED ACCESSORIES AND IN THE ABSENCE OF SUCH A STATEMENT, THE CONTRACTING OFFICER HAD A RIGHT UNDER THE PROVISIONS OF PARAGRAPH 3 OF THE ADDITIONAL TERMS AND CONDITIONS OF THE INVITATION FOR BIDS TO ASSUME THAT HILL MODEL R-100 C, CITED BY THE CORPORATION IN ITS BID, WAS EQUIPPED WITH THE ACCESSORIES CALLED FOR IN THE SPECIFICATIONS.

IN VIEW OF THE FOREGOING, IT IS OUR OPINION THAT THE ACCEPTANCE OF THE LOW BID OF C. V. HILL AND COMPANY, INC., CONSUMMATED A VALID AND BINDING CONTRACT REQUIRING DELIVERY BY THE CORPORATION OF CONDENSING UNITS EQUIPPED WITH THE REQUIRED ACCESSORIES AT ITS ORIGINAL BID PRICES.

WHILE THE CORPORATION NOW ALLEGES THAT IT MISINTERPRETED THE SPECIFICATIONS AND THAT AS A RESULT THEREOF IT FAILED TO INCLUDE THE COST OF THE ACCESSORIES IN ITS BID PRICE, THE CONTRACTING OFFICER REPORTS THAT HE WAS NOT ON NOTICE OF ERROR PRIOR TO THE ACCEPTANCE OF THE BID SINCE THE CORPORATION'S BID PRICE WAS IN LINE WITH THE OTHER BIDS RECEIVED AND THE PRICES PREVIOUSLY PAID FOR THE SAME TYPE OF CONDENSING UNITS. THE RECORD INDICATES THAT THE OTHER BID PRICES ON THE CONDENSING UNITS RANGED FROM $275 TO $330 AND THAT THE SAME TYPE OF CONDENSING UNITS WERE PREVIOUSLY PROCURED AT PRICES RANGING FROM $212.34 TO $228.70. IN VIEW OF THE OTHER BIDS RECEIVED AND THE PREVIOUS PRICES PAID FOR THE IDENTICAL CONDENSING UNITS WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE CORPORATION. REGARD TO THE CORPORATION'S ACTION IN ATTACHING ITS SPECIFICATIONS FOR THE MODEL R 100-C CONDENSING UNIT TO ITS BID, THE CONTRACTING OFFICER STATES THAT SINCE THERE WAS NO APPARENT CONFLICT BETWEEN THESE SPECIFICATIONS AND THE REQUIREMENTS SET FORTH IN PARAGRAPH 3.3.12.1 OF MILITARY SPECIFICATION MIL-R-10137C, THE CORPORATION'S BID WAS REGARDED AS RESPONSIVE TO THE INVITATION BY VIRTUE OF THE PROVISIONS OF PARAGRAPH 3 (CITATION OF SPECIFICATION) OF THE ADDITIONAL TERMS AND CONDITIONS OF THE INVITATION FOR BIDS. SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED BY THE CORPORATION UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505; 20 COMP. GEN. 652; AND 26 ID. 415.

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR AUTHORIZING AN INCREASE IN THE CONTRACT PRICE OF THE CONDENSING UNITS OR FOR CANCELING THE CONTRACT.