B-147647, DEC. 27, 1961

B-147647: Dec 27, 1961

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 21. TO HAVE BEEN MADE IN ITS BID UPON WHICH PURCHASE ORDER NO. 354 WAS AWARDED. WHICH WAS ISSUED ON AUGUST 23. SINCE THIS WAS THE LOWEST BID RECEIVED FOR ITEM NO. 1. - PURCHASE ORDER NO. 354 WAS ISSUED BY THE HOSPITAL TO MID STATES ON SEPTEMBER 25. ALL OTHER PARAGRAPHS OF THE APPLICABLE FEDERAL SPECIFICATION NO. 00-L-131E WERE INCLUDED IN THE OVER-ALL REQUIREMENTS FOR THE TUMBLERS. 024.15 EACH FOR THE TUMBLERS WAS MORE THAN $358 LOWER THAN THE NEXT LOW BID. MOREOVER THE THREE OTHER BIDS RECEIVED WERE CLOSELY IN RANGE THERE BEING A DIFFERENCE OF ONLY $57 BETWEEN THEM. WE BELIEVE SUCH A PRICE DIFFERENTIAL MIGHT VERY WELL HAVE ALERTED THE CONTRACTING OFFICER TO THE PROBABILITY OF AN ERROR IN THE LOW BID OF MID STATES AND.

B-147647, DEC. 27, 1961

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 21, 1961, WITH ENCLOSURES, FILE 031C, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, ASSISTANT ADMINISTRATOR FOR MANAGEMENT SERVICES, VETERANS ADMINISTRATION, REQUESTING OUR DECISION IN REGARD TO AN ERROR ALLEGED BY MID STATES SUPPLIES, NC., DAYTON, OHIO, TO HAVE BEEN MADE IN ITS BID UPON WHICH PURCHASE ORDER NO. 354 WAS AWARDED.

IN RESPONSE TO INVITATION NO. 62-12, WHICH WAS ISSUED ON AUGUST 23, 1961, BY THE SUPPLY DIVISION, VETERANS ADMINISTRATION HOSPITAL, SHERIDAN, WYOMING, MID STATES SUBMITTED A BID OFFERING TO FURNISH ITEM NO. 1, COVERING TWO COMMERCIAL LAUNDRY DRYING TUMBLERS AT $1,024.15 EACH. SINCE THIS WAS THE LOWEST BID RECEIVED FOR ITEM NO. 1--- THREE OTHER BIDS RANGED FROM $1,383 TO $1440--- PURCHASE ORDER NO. 354 WAS ISSUED BY THE HOSPITAL TO MID STATES ON SEPTEMBER 25, 1961, ACCEPTING ITS BID FOR THIS ITEM. TELEGRAM DATED OCTOBER 6, 1961, THE CORPORATION ADVISED THE HOSPITAL THAT IT COULD NOT SHIP THE TUMBLERS COVERED BY THE PURCHASE ORDER SINCE IT HAD LEARNED THAT THEY DID NOT MEET SPECIFICATIONS. BY A SUBSEQUENT LETTER DATED OCTOBER 17, 1961, THE CORPORATION ADVISED THAT IN SUBMITTING THE BID IT DID NOT REALIZE THAT, IN ADDITION TO PARAGRAPH 3.3.2.22, ALL OTHER PARAGRAPHS OF THE APPLICABLE FEDERAL SPECIFICATION NO. 00-L-131E WERE INCLUDED IN THE OVER-ALL REQUIREMENTS FOR THE TUMBLERS. THE CORPORATION FURTHER ADVISED THAT IT COULD SUPPLY DRYING TUMBLERS MEETING THE SPECIFICATIONS AT $1,290 EACH.

AN EXAMINATION OF THE BIDS RECEIVED FOR ITEM NO. 1 SHOWS THAT THE LOW BID OF MID STATES OF $1,024.15 EACH FOR THE TUMBLERS WAS MORE THAN $358 LOWER THAN THE NEXT LOW BID, AND MOREOVER THE THREE OTHER BIDS RECEIVED WERE CLOSELY IN RANGE THERE BEING A DIFFERENCE OF ONLY $57 BETWEEN THEM. THUS, ON A BID COMPARISON BASIS ALONE, WE BELIEVE SUCH A PRICE DIFFERENTIAL MIGHT VERY WELL HAVE ALERTED THE CONTRACTING OFFICER TO THE PROBABILITY OF AN ERROR IN THE LOW BID OF MID STATES AND, THEREFORE, THE CORPORATION SHOULD HAVE BEEN AFFORDED THE OPPORTUNITY TO VERIFY ITS BID PRIOR TO ACCEPTANCE.

ACCORDINGLY, SINCE THERE CAN BE LITTLE, IF ANY, DOUBT THAT AN ERROR WAS, IN FACT, MADE IN ITEM NO. 1 OF THE BID OF MID STATES, AS ALLEGED, AND SINCE THERE APPEARS TO HAVE BEEN CONSTRUCTIVE NOTICE THEREOF PRIOR TO THE ACCEPTANCE OF THE BID, PURCHASE ORDER NO. 354 MAY BE CANCELED WITHOUT LIABILITY TO THE CORPORATION.

IT IS OUR VIEW THAT THE RECORD FAILS TO ESTABLISH WITH THAT DEGREE OF CERTAINTY REQUIRED AS A PREREQUISITE FOR THE CORRECTION OF BIDS OR THE ALLOWANCE OF COMPARABLE AMOUNTS THAT HAD THE ERROR NOT OCCURRED IN THE BID OF MID STATES FOR ITEM NO. 1 ITS BID WOULD HAVE BEEN $1,290. THEREFORE, AMENDMENT OF THE PURCHASE ORDER IS NOT AUTHORIZED.

THE PAPERS, WITH THE EXCEPTION OF A COPY OF THE CONTRACTING OFFICER'S STATEMENT, ARE RETURNED HEREWITH AS REQUESTED.