B-150707, APR. 15, 1963

B-150707: Apr 15, 1963

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TO THE SECRETARY OF THE INTERIOR: WE HAVE RECEIVED A REPORT DATED FEBRUARY 1. WHICH HAD SUBMITTED THE LOW BID AND WAS LOCATED AT GLASSPORT. WHILE WE THINK THE CONTRACTING OFFICER WAS JUSTIFIED IN ASSUMING THAT THE CONTRACTOR WOULD NOT SHIP FROM GLASSPORT. WE DO NOT BELIEVE HE WAS JUSTIFIED IN ASSUMING THAT THE CONTRACTOR WOULD NOT INCUR ANY TRANSPORTATION CHARGES. IN VIEW OF THE FACT THAT THE BIDS INDICATE AND THE CONTRACTING OFFICER CORRECTLY ASSUMED THAT THE MANUFACTURER AND THE CONTRACTOR WERE BIDDING THE SAME UNIT PRICES ON THE SAME GOODS. DESTINATION BID WAS SUFFICIENT EVIDENCE TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. THE CONTRACTING OFFICER SHOULD HAVE CONFIRMED THE CONTRACTOR'S BID PRICES BEFORE MAKING THE AWARD.

B-150707, APR. 15, 1963

TO THE SECRETARY OF THE INTERIOR:

WE HAVE RECEIVED A REPORT DATED FEBRUARY 1, 1963, FROM THE DIRECTOR, DIVISION OF PROPERTY MANAGEMENT, ON THE REQUEST OF I.T.T. KELLOGG, OF BURLINGAME, CALIFORNIA, FOR RELIEF FROM AN ERROR IN BID ALLEGED AFTER THE AWARD OF CONTRACT NO. 14-03-34797 FOR STEEL WIRE STRAND.

THE RECORD ESTABLISHES THAT THE CONTRACTOR ERRONEOUSLY SUBMITTED PRICES F.O.B. DESTINATION, AMPERE, WASHINGTON, INSTEAD OF F.O.B. ORIGIN, GLASSPORT, PENNSYLVANIA. ALTHOUGH ITS SUBCONTRACTOR, THE MANUFACTURER OF THE STRAND, HAD QUOTED PRICES TO IT ON THE BASIS F.O.B. ORIGIN, GLASSPORT, PENNSYLVANIA. THE TWO OTHER BIDDERS BOTH QUOTED PRICES F.O.B., GLASSPORT, PENNSYLVANIA.

THE CONTRACTING OFFICER STATES THAT HE NOTICES THAT THE CONTRACTOR HAD BID THE SAME UNIT PRICES AS THE MANUFACTURER, WHICH HAD SUBMITTED THE LOW BID AND WAS LOCATED AT GLASSPORT. HOWEVER, THE CONTRACTING OFFICER ASSUMED THAT SINCE THE CONTRACTOR BID FROM ITS WEST COAST OFFICE IN BURLINGAME, IT WOULD NOT INCUR THE $2.25-$2.29 PER CWT. TRANSPORTATION CHARGES FROM GLASSPORT.

WHILE WE THINK THE CONTRACTING OFFICER WAS JUSTIFIED IN ASSUMING THAT THE CONTRACTOR WOULD NOT SHIP FROM GLASSPORT, WE DO NOT BELIEVE HE WAS JUSTIFIED IN ASSUMING THAT THE CONTRACTOR WOULD NOT INCUR ANY TRANSPORTATION CHARGES. INDEED, OUR TRANSPORTATION DIVISION COMPUTES THAT THE CHEAPEST TRANSPORTATION FROM BURLINGAME TO AMPERE WOULD BE ROUGHLY $2.20 PER CWT. (10,000-POUND MINIMUM), $1.90 PER CWT. (30,000 POUND MINIMUM). IN VIEW OF THE FACT THAT THE BIDS INDICATE AND THE CONTRACTING OFFICER CORRECTLY ASSUMED THAT THE MANUFACTURER AND THE CONTRACTOR WERE BIDDING THE SAME UNIT PRICES ON THE SAME GOODS, WE BELIEVE THAT THE LATTER'S CLEAR FAILURE TO INCLUDE ANY PART OF THE RELATIVELY SUBSTANTIAL TRANSPORTATION COSTS IN ITS F.O.B. DESTINATION BID WAS SUFFICIENT EVIDENCE TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. THEREFORE, THE CONTRACTING OFFICER SHOULD HAVE CONFIRMED THE CONTRACTOR'S BID PRICES BEFORE MAKING THE AWARD.

HOWEVER, IT IS NOTED THAT THE CONTRACTOR'S CORRECTED BID WOULD EXCEED THE NEXT LOWEST BID OF $28,302.01 BY $92.85. THEREFORE, THE PRICE ADJUSTMENT DUE THIS CONTRACTOR SHALL BE LIMITED TO AN AMOUNT WHICH MAY NOT EXCEED THE NEXT LOWEST BID. SEE 37 COMP. GEN. 398.