B-152453, OCT. 7, 1963

B-152453, OCT. 7, 1963

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED AUGUST 6, 1963, FROM THE HEADQUARTERS, AIR FORCE ACCOUNTING AND FINANCE CENTER, DENVER, COLORADO, FILE AJF, TRANSMITTING TO OUR OFFICE A REQUEST OF SANDNES' SONS FOR CANCELLATION OF CONTRACT NO. AF 01/601/-50435, DATED JUNE 4, 1963.

ON APRIL 10, 1963, THE HEADQUARTERS, MOBILE AIR MATERIEL AREA, BROOKLEY AIR FORCE BASE, ALABAMA, ISSUED AN INVITATION FOR BIDS FOR FURNISHING 2,500 CLAMPS; WIRE ROPE, THREADED, STEEL, CADMIUM PLATED FINISH; P/N MS16843-8, FEDERAL SPECIFICATION FF-C-450A, TYPE IV. SIX BIDS WERE RECEIVED. THE LOW BID OF SANDNES' SONS WAS $0.70 EACH OR A TOTAL OF $1,750. THE UNIT PRICES OF THE OTHER FIVE BIDS WERE $2.96, $3.07, $3.13, $3.82 AND $3.97. IN VIEW OF THE DISPARITY BETWEEN THE PRICE QUOTED BY THE LOW BIDDER AND THE FIVE OTHER BIDS RECEIVED THE CONTRACTING OFFICER, BY A TELEGRAM DATED MAY 15, 1963, REQUESTED IT TO CONFIRM ITS BID AND IN ADDITION, HE POINTED OUT THAT ITS BID WAS APPROXIMATELY 236 PERCENT LOWER THAN THE NEXT LOW BIDDER. IN ITS LETTER OF MAY 17, 1963, SANDNES' STATED THAT "THIS WILL CONFIRM OUR UNIT PRICE OF .70 EACH FOR SUBJECT BID.' JUNE 4, 1963, AWARD WAS MADE TO SANDNES' AT ITS BID PRICE. THEREAFTER, BY ITS LETTER OF JUNE 11, 1963, THE CONTRACTOR ADMITTED THAT IT MADE A MISTAKE IN INTERPRETING THE SPECIFICATIONS AS TO THE ,MS" PART NUMBER AS TO SIZE FROM WHICH IT HAD CONCLUDED THAT THE GOVERNMENT WAS ASKING FOR BIDS ON 1/4-INCH CLAMPS. HOWEVER, ON JUNE 7, 1963, IN A TELEPHONE CONVERSATION WITH THE PROCURING ACTIVITY IT LEARNED THAT 5/8-INCH CLAMPS WERE TO BE FURNISHED AND IT STATED THAT IF IT WERE REQUIRED TO PERFORM THE CONTRACT FOR $1,750 IT WOULD SUSTAIN A LOSS AMOUNTING TO $4,000. WHEREFORE, IT REQUESTED THAT IT BE RELIEVED OF ITS COMMITMENT UNDER THE CONTRACT.

THE CONTRACTING OFFICER STATES THAT IT APPEARS THAT THE CONTRACTOR DID MAKE A BONA FIDE MISTAKE IN ITS BID PRICE BUT FEELS THAT SINCE HE HAD ASKED FOR VERIFICATION OF THE BID PRICE HE HAD FULFILLED HIS RESPONSIBILITY FOR THE ASCERTAINMENT OF THE CORRECTNESS OF THE BID. ALSO, HE FEELS THAT WHILE THE SIZE OF THE CLAMPS WAS NOT SHOWN SPECIFICALLY IN THE INVITATION, THE CONTRACTOR SHOULD NOT HAVE ATTEMPTED TO DETERMINE THE SIZE FROM THE PART NUMBER BUT SHOULD HAVE AVAILED ITSELF OF THE SPECIFICATIONS AND DRAWINGS REFERRED TO IN THE INVITATION WHICH "ARE AVAILABLE TO AND GENERALLY ARE IN THE POSSESSION OF THE INDUSTRY.' THE WRIGHT-PATTERSON AIR FORCE BASE, OHIO, IN REVIEWING THE CORRESPONDENCE IN THE MATTER, HAS CONCLUDED THAT THE CONTRACTOR WAS ACTUALLY CONFUSED IN THE INTERPRETATION OF THE MATERIAL REQUIRED AND THAT IN VIEW OF THE GREAT DIFFERENCE BETWEEN THE CONTRACTOR'S BID AND THE OTHER BIDS RECEIVED THE CONTRACTING OFFICER SHOULD HAVE GIVEN THE CONTRACTOR A FURTHER OPPORTUNITY TO DISCOVER THE ERROR IN ITS BID. THIS RECOMMENDATION THAT THE CONTRACT BE CANCELED IS CONCURRED IN BY THE FORWARDING ACTIVITY'S LETTER.

IN VIEW OF THE FOREGOING FACTS AND CIRCUMSTANCES WE FEEL THAT THE CONTRACTING OFFICER SHOULD HAVE AFFORDED THE CONTRACTOR A FURTHER OPPORTUNITY TO EXAMINE ITS BID. IT WOULD NOT ONLY BE INEQUITABLE TO REQUIRE PERFORMANCE AT THE CONTRACT PRICE BUT IT COULD ALSO BE SERIOUSLY CONTENDED THAT IT WOULD BE UNCONSCIONABLE TO DO SO.

ACCORDINGLY, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY TO SANDNES' SONS.