B-151538, JUN. 21, 1963

B-151538: Jun 21, 1963

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A COMMUNICATION DATED APRIL 24. MAY BE CANCELED IN VIEW OF AN ERROR ALLEGED BY THE CONTRACTOR TO HAVE BEEN MADE IN ITS BID UPON WHICH THE AWARD WAS MADE. SIX OTHER BIDS WERE RECEIVED FOR THESE ITEMS RANGING FROM $1.75 TO $4.22 EACH FOR ITEM NO. 1. THE MATTER OF THE COMPANY'S LOW BID AGAIN WAS CALLED TO ITS ATTENTION AND A VERIFICATION OF THE BID REQUESTED BY RETURN WIRE. 2 AND 3 WAS ACCEPTED ON OCTOBER 12. 2 AND 3 IN THAT ITS BID WAS BASED ON AN ERRONEOUS QUOTATION. 2 AND 3 SHOULD HAVE BEEN $328.90 PER HUNDRED. THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY STATES THAT SINCE ITS BID ON THESE ITEMS SHOULD HAVE BEEN 10 TIMES MORE THAN THE PRICES QUOTED IT REQUESTS CANCELLATION OF CONTRACT NO.

B-151538, JUN. 21, 1963

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A COMMUNICATION DATED APRIL 24, 1963, WITH ENCLOSURE, FROM THE DIRECTORATE OF ADJUDICATION, TRANSPORTATION LOSS AND DAMAGE DIVISION, HEADQUARTERS, AIR FORCE ACCOUNTING AND FINANCE CENTER, DENVER, COLORADO, REQUESTING OUR DECISION AS TO WHETHER DEPARTMENT OF THE AIR FORCE CONTRACT NO. AF 01/601/-46385, DATED OCTOBER 12, 1962, MAY BE CANCELED IN VIEW OF AN ERROR ALLEGED BY THE CONTRACTOR TO HAVE BEEN MADE IN ITS BID UPON WHICH THE AWARD WAS MADE.

IN RESPONSE TO INVITATION NO. 01-601-63-64, ISSUED ON AUGUST 8, 1962, BY HEADQUARTERS, MOBILE AIR MATERIEL AREA, DIRECTORATE OF PROCUREMENT AND PRODUCTION, BROOKLEY AIR FORCE BASE, THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY, CONYERS, GEORGIA, SUBMITTED A BID DATED SEPTEMBER 6, 1962, OFFERING TO FURNISH ITEMS NOS. 1, 2 AND 3, COVERING VARIOUS TYPES AND QUANTITIES OF PREFORMED SYNTHETIC RUBBER PACKING RINGS AT THE RESPECTIVE UNIT PRICES $0.48, $0.54 AND $0.45 EACH. SIX OTHER BIDS WERE RECEIVED FOR THESE ITEMS RANGING FROM $1.75 TO $4.22 EACH FOR ITEM NO. 1, FROM $2.05 TO $4.45 EACH FOR ITEM NO. 2 AND FROM $1.69 TO $3.64 EACH FOR ITEM NO. 3. THE CONTRACTING OFFICER, NOTING THE DISPARITY BETWEEN THE LOW BID OF THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY AND THE OTHER BIDS RECEIVED FOR ITEMS NOS. 1, 2 AND 3, REQUESTED THE COMPANY BY TELEPHONE ON SEPTEMBER 12, 1962, TO VERIFY ITS BID, AT WHICH TIME THE COMPANY VERBALLY CONFIRMED ITS PRICES ON THESE ITEMS. BY TELEGRAM DATED SEPTEMBER 13, 1962, THE MATTER OF THE COMPANY'S LOW BID AGAIN WAS CALLED TO ITS ATTENTION AND A VERIFICATION OF THE BID REQUESTED BY RETURN WIRE. BY LETTER DATED SEPTEMBER 12, 1962, AND BY TELEGRAM DATED SEPTEMBER 17, 1962, THE COMPANY CONFIRMED ITS PREVIOUS VERBAL VERIFICATION OF THE BID. ON THE BASIS OF SUCH CONFIRMATION THE BID OF THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY FOR ITEMS NOS. 1, 2 AND 3 WAS ACCEPTED ON OCTOBER 12, 1962, THEREBY CONSUMMATING CONTRACT NO. AF 01/601/-46385. IN A TELEPHONE CONVERSATION OF NOVEMBER 12, 1962, THE COMPANY NOTIFIED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN ITS BID ON ITEMS NOS. 1, 2 AND 3 IN THAT ITS BID WAS BASED ON AN ERRONEOUS QUOTATION--- MISPLACED DECIMAL POINT--- OF ITS SUPPLIER OF $32.89 PER HUNDRED, $39.04 PER HUNDRED AND $30.75 PER HUNDRED, RESPECTIVELY. THE COMPANY STATED THAT UPON REQUEST ITS SUPPLIER HAD AFFIRMED THESE UNIT PRICES AS BEING CORRECT AND, THEREFORE, THE COMPANY HAD BASED THE VERIFICATION OF ITS OWN BID TO THE GOVERNMENT CONTRACTING OFFICER FOR THESE ITEMS ON THE SUPPLIER'S AFFIRMATION OF ITS QUOTATION TO IT. THE COMPANY STATED FURTHER, HOWEVER, THAT ITS SUPPLIER SUBSEQUENTLY ADVISED THAT ITS RESPECTIVE BID FOR ITEMS NOS. 1, 2 AND 3 SHOULD HAVE BEEN $328.90 PER HUNDRED, $390.40 PER HUNDRED AND $307.50 PER HUNDRED. THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY STATES THAT SINCE ITS BID ON THESE ITEMS SHOULD HAVE BEEN 10 TIMES MORE THAN THE PRICES QUOTED IT REQUESTS CANCELLATION OF CONTRACT NO. AF 01/601/ 46385.

AFTER THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY VERIFIED, ON TWO OCCASIONS, ITS BID OF $0.48, $0.54 AND ?45 EACH, RESPECTIVELY, FOR ITEMS NOS. 1, 2 AND 3 FOR THE PACKING RINGS, ORDINARILY THE CONTRACTING OFFICER WOULD, OF COURSE, BE UNDER NO FURTHER OBLIGATION TO MAKE INQUIRY AS TO THE CORRECTNESS OF THE BID. HOWEVER, THERE CAN BE NO DOUBT THAT THE BID OF THE COMPANY WAS COMPLETELY OUT OF LINE WITH THE SIX OTHER BIDS RECEIVED FOR THESE ITEMS AND IT WAS, IN FACT, APPROXIMATELY 400 PERCENT LOWER THAN THE NEXT LOW BID RECEIVED FOR EACH OF THESE ITEMS. ALSO, THE ESTIMATED PRICES SHOWN ON THE PURCHASE REQUESTS FOR ITEMS NOS. 1, 2 AND 3 WERE $2.38, $2.57 AND $1.78 EACH. UNDER THESE CIRCUMSTANCES, WE BELIEVE THAT EVEN THE TWO-FOLD VERIFICATION OF ITS BID BY THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY SHOULD NOT HAVE BEEN SUFFICIENTLY ADEQUATE TO DISPEL THE ALREADY EXISTING DOUBT THAT THE GOVERNMENT CONTRACTING OFFICER HAD AS TO THE CORRECTNESS OF THE COMPANY'S BID ON ITEMS NOS. 1, 2 AND 3 AND, THEREFORE, THAT THERE STILL EXISTED AMPLE REASON FOR THE CONTRACTING OFFICER TO REQUEST A STILL FURTHER CLARIFICATION OF THE COMPANY'S BID ON THESE ITEMS PRIOR TO AWARD. MOREOVER, THERE CAN BE NO DOUBT FROM THE AMOUNT OF THE COMPANY'S BID ITSELF ON ITEMS NOS. 1, 2 AND 3 AND FROM THE QUOTATIONS OF RECORD OF THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY'S SUPPLIER THAT THE COMPANY MADE AN ERROR IN ITS BID, AS ALLEGED.

IN VIEW OF THE FOREGOING, AND SINCE ENFORCEMENT OF THE CONTRACT WOULD BE INEQUITABLE, WE WILL NOT OBJECT TO A CANCELLATION OF CONTRACT NO. AF 01/601/46385 IN THIS PARTICULAR CASE, WITHOUT OBLIGATION TO THE AIRCRAFT PRODUCTS AND ENGINEERING COMPANY.

A COPY OF THE COMMUNICATION DATED APRIL 15, 1963, FROM THE AIR FORCE LOGISTICS COMMAND, WRIGHT-PATTERSON AIR FORCE BASE, TOGETHER WITH THE ENCLOSURE, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT IN THE MATTER, IS RETURNED HEREWITH.