B-152483, OCT. 21, 1963

B-152483: Oct 21, 1963

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE POSTMASTER GENERAL: REFERENCE IS MADE TO LETTER OF SEPTEMBER 11. PRICES WERE SOLICITED ON AN ALTERNATE BASIS. WHICH WAS THE SECOND LOW BID. 345 WHICH WAS DISQUALIFIED BECAUSE THE BIDDER WAS NOT CONSIDERED TO HAVE BEEN A MANUFACTURER OR REGULAR DEALER. THE INVITATION REQUIRED THE BIDDER TO STATE GUARANTEED SHIPPING WEIGHTS AND PROVIDED THAT IF THE ACTUAL SHIPPING WEIGHT IS IN EXCESS OF THE GUARANTEED WEIGHT. PITTCON WAS THE LOW BIDDER HAVING BID $4. PITTCON WAS ADVISED THAT ITS UNIT PRICES WERE THE SAME ON THE ORIGIN AND DELIVERED BASIS AND IT WAS REQUESTED TO CONFIRM ITS UNIT PRICES. WHEN PITTCON DID NOT COMPLY WITH THE REQUEST BY THE TIME BIDS WERE TO EXPIRE. AN AWARD WAS MADE TO PITTCON FOR ITEMS I AND VIII A.

B-152483, OCT. 21, 1963

TO THE POSTMASTER GENERAL:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 11, 1963, FROM THE ACTING ASSISTANT POSTMASTER GENERAL REQUESTING A DECISION WHETHER PITTCON WOOD PRODUCTS CO., INC., MAY BE DISCHARGED FROM PERFORMANCE UNDER THE CONTRACT AWARDED TO IT FOR ITEMS I AND VIII-A IN INVITATION FOR BIDS 1542.

THE INVITATION SOLICITED PRICES ON VARIOUS ITEMS OF EQUIPMENT. BEGINNING WITH ITEM III, PRICES WERE SOLICITED ON AN ALTERNATE BASIS. FOR EXAMPLE, ITEM III SOLICITED THE PRICE OF LOBBY DESKS F.O.B. ORIGIN AND ITEM III-A SOLICITED A PRICE FOR THE SAME ARTICLE BUT ON AN F.O.B. DESTINATION BASIS INSTEAD.

ON ITEM I, PITTCON BID $7,114.25, WHICH WAS THE SECOND LOW BID, TERRY, INC., HAVING BEEN LOWER WITH A BID OF 46,345 WHICH WAS DISQUALIFIED BECAUSE THE BIDDER WAS NOT CONSIDERED TO HAVE BEEN A MANUFACTURER OR REGULAR DEALER. WITH RESPECT TO ITEM I, AND ANOTHER ITEM NOT APPLICABLE HERE, THE INVITATION REQUIRED THE BIDDER TO STATE GUARANTEED SHIPPING WEIGHTS AND PROVIDED THAT IF THE ACTUAL SHIPPING WEIGHT IS IN EXCESS OF THE GUARANTEED WEIGHT, THE CONTRACTOR WOULD BE RESPONSIBLE FOR THE TRANSPORTATION EXPENSES RESULTING FROM THE OVERAGE IN WEIGHT. PITTCON DID NOT STATE ANY GUARANTEED SHIPPING WEIGHTS FOR ITEM I IN ITS BID. ON ITEMS VIII AND VIII-A, PITTCON WAS THE LOW BIDDER HAVING BID $4,567.05 ON EACH OF THESE ITEMS. PITTCON FOLLOWED THE SAME PATTERN OF BIDDING ON THE OTHER FIVE ITEMS WHICH ALSO CALLED FOR ALTERNATE BIDS.

PITTCON WAS ADVISED THAT ITS UNIT PRICES WERE THE SAME ON THE ORIGIN AND DELIVERED BASIS AND IT WAS REQUESTED TO CONFIRM ITS UNIT PRICES, TO STATE ITS GUARANTEED SHIPPING WEIGHTS AND TO EXTEND THE TIME FOR ACCEPTANCE. WHEN PITTCON DID NOT COMPLY WITH THE REQUEST BY THE TIME BIDS WERE TO EXPIRE, AN AWARD WAS MADE TO PITTCON FOR ITEMS I AND VIII A.

ABOUT A MONTH LATER, PITTCON ADVISED THAT IT HAD MADE AN ERROR IN ITS BID ON ITEMS I AND VIII-A. ON ITEM I, IT REPRESENTED THAT ITS ACTUAL MATERIAL COST PLUS ESTIMATED LABOR EXCEEDED THE CONTRACT PRICE BY ABOUT $1,227.41. AS TO ITEM VIII-A IT REPRESENTED THAT THE ERROR OCCURRED DUE TO AN ERRONEOUS UNDERSTANDING OF THE BID FORM WHICH LED THE COMPANY TO BELIEVE THAT IT HAD AN OPTION TO PRICE ITEMS ON AN F.O.B. ORIGIN BASIS TO THE EXCLUSION OF A DELIVERY BASIS.

IT IS PROVIDED IN 41 U.S.C. 253 THAT THE AWARD OF A CONTRACT LET AFTER FORMAL ADVERTISING SHALL BE MADE TO THE LOWEST RESPONSIBLE BIDDER WHOSE BID IS "CONFORMING TO THE INVITATION FOR BIDS.' THE BID OF PITTCON ON ITEM I DID NOT CONFORM TO THE INVITATION FOR BIDS IN THAT IT DID NOT INCLUDE THE REQUIRED SHIPPING WEIGHT DATA. AN AWARD ON THIS NONRESPONSIVE ITEM WAS CONTRARY TO THE QUOTED STATUTORY MANDATE AND THE BID SHOULD MORE PROPERLY HAVE BEEN REJECTED.

AS TO THE BID ON ITEM VIII-A, THE QUESTION FOR RESOLUTION IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE CONTRACTING OFFICER'S ACCEPTANCE OF THE OFFEROR'S BID ON THAT ITEM. THE GENERAL RULE IS THAT AN ACCEPTANCE OF A BID BY THE CONTRACTING OFFICER WHO NEITHER KNEW NOR HAD REASON TO KNOW OF ANY ERROR IN THE BID CONSUMMATES A VALID AND BINDING CONTRACT. HOWEVER, IN THE INSTANT CASE THE CONTRACTING OFFICER SUSPECTED THAT THE BID ON ITEM VIII-A WAS IN ERROR. ALONG THAT LINE THE LETTER OF SEPTEMBER 11 STATES THAT THE TRANSPORTATION COST FROM HYATTSVILLE, MARYLAND, WHERE PITTCON IS LOCATED, TO OAKLAND, CALIFORNIA, THE DESTINATION OF DELIVERY, IS ABOUT $906 AND THAT "IT IS UNREASONABLE TO SUPPOSE THAT PITTCON WOULD HAVE BID IDENTICALLY BOTH ON A DELIVERED AND F.O.B. POINT OF ORIGIN BASIS.' IN VIEW OF THE CONSTRUCTIVE NOTICE OF POSSIBLE ERROR, IT MAY BE CONCLUDED THAT ACCEPTANCE OF THE BID ON THIS LATTER ITEM DID NOT RESULT IN A BINDING AGREEMENT.

ACCORDINGLY, THE CONTRACT AWARDED TO PITTCON FOR ITEMS I AND VIII-A SHOULD BE CANCELED.

THE ENCLOSURES THAT ACCOMPANIED THE SEPTEMBER 11 LETTER ARE RETURNED AS REQUESTED.