B-147324, OCT. 17, 1961

B-147324: Oct 17, 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: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 28. THREE OTHER BIDS WERE RECEIVED FOR THE ITEM IN THE UNIT PRICES OF $0.2945. - THIS BID WAS NONRESPONSIVE AS IT SPECIFIED 30-POUND CONTAINERS. IT IS REPORTED THAT AFTER AN AWARD WAS MADE ON SEPTEMBER 11. ADVISED THE HINES SUPPLY DEPOT THAT IT INADVERTENTLY HAD FAILED TO STATE THAT ITS BID WAS ON THE BASIS OF FURNISHING 30-POUND CONTAINERS INSTEAD OF THE 10-POUND CONTAINERS SPECIFIED. THERE IS NOTED THE CONTRACTING OFFICER'S STATEMENT THAT OF THE SIX MOST RECENT PROCUREMENTS OF WHOLE FROZEN EGGS IN 10-POUND CONTAINERS. FOUR PROCUREMENTS WERE FROM ARMOUR AND COMPANY AND THAT $0.34 A POUND WAS THE COMPANY'S LOWEST PRICE FOR THIS PRODUCT.

B-147324, OCT. 17, 1961

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 28, 1961, WITH ENCLOSURES, FILE 031C, FORWARDED IN BEHALF OF THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, REQUESTING OUR DECISION AS TO WHETHER THERE MAY BE RESCINDED A CONTRACT AWARDED TO ARMOUR AND COMPANY, CHICAGO, ILLINOIS, UNDER INVITATION NO. M4- 115-62, IN VIEW OF THE CIRCUMSTANCES REPORTED.

IN RESPONSE TO THE INVITATION ISSUED ON AUGUST 24, 1961, BY THE MARKETING DIVISION FOR SUBSISTENCE, VETERANS ADMINISTRATION SUPPLY DEPOT, HINES, ILLINOIS, ARMOUR AND COMPANY SUBMITTED A BID OFFERING TO FURNISH ITEM NO. 1, COVERING 20,000 POUNDS OF WHOLE FROZEN EGGS AT $0.3075 A POUND, OR FOR A TOTAL PRICE OF $6,150. THREE OTHER BIDS WERE RECEIVED FOR THE ITEM IN THE UNIT PRICES OF $0.2945--- THIS BID WAS NONRESPONSIVE AS IT SPECIFIED 30-POUND CONTAINERS--- $0.35 AND $0.3665. IT IS REPORTED THAT AFTER AN AWARD WAS MADE ON SEPTEMBER 11, 1961, TO ARMOUR AND COMPANY, AS THE LOWEST RESPONSIBLE BIDDER, THE COMPANY, BY LETTER DATED SEPTEMBER 13, 1961, ADVISED THE HINES SUPPLY DEPOT THAT IT INADVERTENTLY HAD FAILED TO STATE THAT ITS BID WAS ON THE BASIS OF FURNISHING 30-POUND CONTAINERS INSTEAD OF THE 10-POUND CONTAINERS SPECIFIED. BY REASON OF THIS, ARMOUR AND COMPANY HAS REQUESTED THAT IT BE RELIEVED OF PERFORMANCE UNDER THE AWARD.

THERE IS NOTED THE CONTRACTING OFFICER'S STATEMENT THAT OF THE SIX MOST RECENT PROCUREMENTS OF WHOLE FROZEN EGGS IN 10-POUND CONTAINERS, FOUR PROCUREMENTS WERE FROM ARMOUR AND COMPANY AND THAT $0.34 A POUND WAS THE COMPANY'S LOWEST PRICE FOR THIS PRODUCT. MOREOVER, NOTWITHSTANDING THAT THE PRESENT EGG MARKET WOULD APPEAR TO BE PARTICULARLY COMPETITIVE, THE ONLY RESPONSIVE BIDS RECEIVED WERE AT THE SUBSTANTIALLY HIGHER UNIT PRICES OF $0.35 AND $0.3665 A POUND. ALSO, THE ONLY NONRESPONSIVE BID OF $0.2945 A POUND COMPARES FAVORABLY IN PRICE WITH THE BID OF ARMOUR AND COMPANY AND THIS BID WAS DETERMINED TO BE NONRESPONSIVE BECAUSE IT ALSO WAS BASED ON FURNISHING THE EGGS IN 30-POUND CONTAINERS. IN THE CIRCUMSTANCES, WE BELIEVE THAT THE PROBABILITY OF A MISTAKE IN ITEM NO. 1 OF THE BID OF ARMOUR AND COMPANY SHOULD HAVE BEEN OBSERVED BY THE CONTRACTING OFFICER AT THE TIME OF AWARD. THIS BEING THE CASE, ARMOUR AND COMPANY SHOULD HAVE BEEN AFFORDED THE USUAL OPPORTUNITY TO VERIFY ITS BID ON ITEM NO. 1 PRIOR TO ITS ACCEPTANCE.

ACCORDINGLY, THE AWARD TO ARMOUR AND COMPANY MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.