B-148569, APR. 10, 1962

B-148569: Apr 10, 1962

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER OF APRIL 3. BIDS WERE RECEIVED FROM THE RESPECTIVE FIRMS AS FOLLOWS: TABLE F.O.B. WAS THE LOWEST BID RECEIVED AND THE CONTRACT WAS AWARDED TO THAT FIRM. THE HARVELL-KILGORE CORPORATION PROTESTED TO THE CONTRACTING OFFICE AGAINST THE AWARD ON THE GROUND THAT AN ERROR MUST HAVE BEEN MADE IN COMPUTING THE TRANSPORTATION COSTS. THE MATTER WAS REVIEWED. IT WAS DISCOVERED THAT THE CONTRACT REQUIREMENT CALLING FOR DELIVERY OF THE GROSS QUANTITY IN FIVE MONTHLY INSTALLMENTS COMMENCING AUGUST 31. DESTINATION BID OF THE HARVELL-KILGORE CORPORATION WAS LOWER THAN ANY OF THE F.O.B. THE FIRM WAS ADVISED THAT THE AWARD WOULD HAVE TO BE CANCELED SINCE IT WAS THE RESULT OF A MISTAKE OF FACT IN THE EVALUATION OF BIDS.

B-148569, APR. 10, 1962

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF APRIL 3, 1962, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION WHETHER AN AWARD UNDER INVITATION CML-04-205-62 30 INCORRECTLY MADE TO JET RESEARCH CENTER, INC., ON DECEMBER 22, 1961, SHOULD BE CANCELED AND PLACED WITH THE HARVELL-KILGORE CORPORATION.

BIDS WERE RECEIVED FROM THE RESPECTIVE FIRMS AS FOLLOWS:

TABLE

F.O.B. F.O.B.

ORIGIN DESTINATION

-------- ----------- HARVELL-KILGORE CORPORATION

$32.61 $33.10 JET RESEARCH CENTER, INC. 31.99 34.15

IN THE EVALUATION OF BIDS, THE PROCUREMENT OFFICIALS ADDED TRANSPORTATION COSTS TO THE F.O.B. ORIGIN BIDS BASED UPON THE ENTIRE 1,500 CONTRACT QUANTITY BEING SHIPPED TOGETHER. EVALUATED ON THAT BASIS, THE F.O.B. ORIGIN BID OF JET RESEARCH CENTER, INC., WAS THE LOWEST BID RECEIVED AND THE CONTRACT WAS AWARDED TO THAT FIRM. THE HARVELL-KILGORE CORPORATION PROTESTED TO THE CONTRACTING OFFICE AGAINST THE AWARD ON THE GROUND THAT AN ERROR MUST HAVE BEEN MADE IN COMPUTING THE TRANSPORTATION COSTS. UPON RECEIPT OF THE PROTEST, THE MATTER WAS REVIEWED. IT WAS DISCOVERED THAT THE CONTRACT REQUIREMENT CALLING FOR DELIVERY OF THE GROSS QUANTITY IN FIVE MONTHLY INSTALLMENTS COMMENCING AUGUST 31, 1962, HAD BEEN OVERLOOKED IN DETERMINING THE COST OF TRANSPORTATION AND THAT, ON THAT BASIS, THE F.O.B. DESTINATION BID OF THE HARVELL-KILGORE CORPORATION WAS LOWER THAN ANY OF THE F.O.B. ORIGIN BIDS EVALUATED TO DESTINATION. UPON ASCERTAINING THAT AN ERRONEOUS AWARD HAD BEEN MADE, THE CONTRACTING OFFICER OF FEBRUARY 9, 1962, NOTIFIED JET RESEARCH CENTER, INC., TO SUSPEND PERFORMANCE. THEREAFTER, THE FIRM WAS ADVISED THAT THE AWARD WOULD HAVE TO BE CANCELED SINCE IT WAS THE RESULT OF A MISTAKE OF FACT IN THE EVALUATION OF BIDS.

IN SUPPORT OF THE DETERMINATION TO CANCEL, THE CONTRACTING OFFICER CITED, AMONG OTHER DECISIONS, THE ONE REPORTED IN 37 COMP. GEN. 330 WHICH HELD THAT AN AWARD RESULTING FROM A MISTAKE OF FACT SHOULD BE CANCELED. JET RESEARCH CENTER, INC., CONTENDS THAT A MATTER OF JUDGMENT IS INVOLVED IN SELECTING THE TRANSPORTATION RATES TO BE APPLIED TO THE ORIGIN BIDS AND THAT THE PRINCIPLES IN B-127917, JULY 17, 1956, AFFIRMED SEPTEMBER 14, 1956, 36 COMP. GEN. 213, SHOULD BE APPLIED AND THE CONTRACT BE CONSIDERED VALID.

HOWEVER, THERE IS NOT INVOLVED HERE, AS THERE WAS IN 36 COMP. GEN. 213, A QUESTION OF THE FREIGHT CLASSIFICATION THAT WILL DETERMINE THE FREIGHT RATE TO BE APPLIED, WHICH QUESTION CAN INVOLVE SOME DEGREE OF JUDGMENT. HERE THE RELEVANT FACTOR IS THAT THE ERROR THAT OCCURRED RESULTED FROM THE MISTAKEN ASSUMPTION THAT DELIVERY WAS TO BE MADE IN TOTO, WHICH WAS CONTRARY TO THE SPECIFIC CONTRACT REQUIREMENT AND THE OBVIOUS FACT THAT DELIVERY WAS TO BE MADE IN INSTALLMENTS. THEREFORE, THE TWO CASES ARE READILY DISTINGUISHABLE. IT IS THEREFORE OUR OPINION THAT THE RULE CITED BY THE CONTRACTING OFFICER IS FOR APPLICATION.

ACCORDINGLY, WHILE THE SITUATION, AS IT AFFECTS JET RESEARCH CENTER, INC., IS MOST UNFORTUNATE, THE CANCELLATION OF THE AWARD MADE TO THAT FIRM IS LEGALLY REQUIRED. IN THE CIRCUMSTANCES, THE CONTRACT SHOULD BE CANCELED AND AWARD MADE TO HARVELL-KILGORE CORPORATION ON THE BASIS OF ITS F.O.B. DESTINATION BID.