B-153433, MAY 26, 1964

B-153433: May 26, 1964

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THIS REQUEST FOR PROPOSALS WAS ISSUED BY THE DIRECTORATE. ECHOLS WAS LISTED AS THE BUYER IN THIS RFP WHICH WAS FOR THE PROCUREMENT OF 817 "PARTS KIT-GOVERNOR" IN ACCORDANCE WITH ATTACHED DRAWINGS AND SPECIFICATIONS. ITEM NO. 14 STATED THAT EACH KIT WAS TO CONTAIN FOUR BEARINGS. PROVIDED THAT THE PROPOSALS WERE TO INCLUDE THE COST OF FURNISHING ITEMS 10 THROUGH 26. YOUR QUOTATION OF $5.39 PER KIT WAS THE LOWEST RECEIVED. SEVEN OTHER QUOTATIONS WERE RECEIVED AS FOLLOWS: $8.35. WHETHER YOU WERE AWARE THAT THE KIT NUMBER WAS "A-02" INSTEAD OF "A-01.'. YOU ALLEGE THAT YOUR WESTERN DIVISION OFFICE WAS NOT NOTIFIED BY YOUR LOCAL OFFICE THAT THE BUYER HAD REQUESTED VERIFICATION OF YOUR UNIT PRICE AND THAT ONE DIVISION OF YOUR CONCERN CANNOT BE RESPONSIBLE FOR THE ACCURATE TRANSMISSION OF MESSAGES FROM ANOTHER DIVISION.

B-153433, MAY 26, 1964

TO LEAR SIEGLER SERVICE, INCORPORATED:

WE REFER TO YOUR LETTER DATED FEBRUARY 3, 1964, IN WHICH YOU REQUEST $4,547.84 FOR LOSSES INCURRED BECAUSE OF AN ERROR IN YOUR PROPOSAL SUBMITTED UNDER REQUEST FOR PROPOSALS NO. OCPDSB-5823.

THIS REQUEST FOR PROPOSALS WAS ISSUED BY THE DIRECTORATE, PROCUREMENT AND PRODUCTION, TINKER AIR FORCE BASE, OAKLAHOMA, ON FEBRUARY 12, 1963, MR. CARL R. ECHOLS WAS LISTED AS THE BUYER IN THIS RFP WHICH WAS FOR THE PROCUREMENT OF 817 "PARTS KIT-GOVERNOR" IN ACCORDANCE WITH ATTACHED DRAWINGS AND SPECIFICATIONS. PAGES 2 AND 3 OF THE RFP PROVIDED THAT THE KIT WOULD BE COMPRISED OF ITEMS 1 THROUGH 26. ITEM NO. 14 STATED THAT EACH KIT WAS TO CONTAIN FOUR BEARINGS, P/N 24150. AMENDMENT NO. 1 ISSUED BY THE PROCURING ACTIVITY ON MARCH 1, 1963, PROVIDED THAT THE PROPOSALS WERE TO INCLUDE THE COST OF FURNISHING ITEMS 10 THROUGH 26, AND THAT ITEMS 1 THROUGH 9 WOULD BE GOVERNMENT FURNISHED EQUIPMENT. YOUR QUOTATION OF $5.39 PER KIT WAS THE LOWEST RECEIVED. SEVEN OTHER QUOTATIONS WERE RECEIVED AS FOLLOWS: $8.35; $9.20; $9.31; $10.61; $11.22; $11.346; AND $18.08.

THE RECORD INDICATES THAT THE BUYER SUSPECTING A POSSIBLE ERROR IN YOUR PROPOSAL, CONTACTED YOUR LOCAL OFFICE LOCATED IN DELAWARE CITY, OKLAHOMA, TO REQUEST VERIFICATION OF THE FOLLOWING MATTERS: YOUR UNIT PRICE, THE INCLUSION OF THE COST OF RECEIVING AND PROCESSING THE GOVERNMENT FURNISHED EQUIPMENT, AND WHETHER YOU WERE AWARE THAT THE KIT NUMBER WAS "A-02" INSTEAD OF "A-01.' THE RECORD ESTABLISHES THAT YOUR LOCAL OFFICE TRANSMITTED THE BUYER'S REQUEST FOR VERIFICATION TO YOUR WESTERN DIVISION OFFICE, THE ACTIVITY WHICH PREPARED YOUR PROPOSAL. HOWEVER, YOU ALLEGE THAT YOUR WESTERN DIVISION OFFICE WAS NOT NOTIFIED BY YOUR LOCAL OFFICE THAT THE BUYER HAD REQUESTED VERIFICATION OF YOUR UNIT PRICE AND THAT ONE DIVISION OF YOUR CONCERN CANNOT BE RESPONSIBLE FOR THE ACCURATE TRANSMISSION OF MESSAGES FROM ANOTHER DIVISION. ON APRIL 12, 1963, YOUR WESTERN DIVISION OFFICE REPLIED TO THE BUYER'S REQUEST AS FOLLOWS:

"THIS LETTER TO CONFIRM THAT ITEMS ONE (1) THRU NINE (9), SUNDSTRAND MACHINE TOOL PART NUMBERS, WILL BE GOVERNMENT FURNISHED AND WILL BE DELIVERED WITHIN 120 DAYS (AFTER THE AWARD IS MADE). THERE WILL BE NO CHARGE TO THE GOVERNMENT FOR RECEIVING AND INSPECTION FOR SHIPMENT DAMAGE OF THE AFORESAID PARTS.

"WE UNDERSTAND AND VERIFY RECEIPT OF THE INFORMATION THAT THE KIT PART NUMBER HAS BEEN CHANGED FROM 041-03-01 TO 041-03-02. WE ARE ASSUMING THAT ALL ITEMS (1 THRU 26) ON PAGES 2 AND 3 OF THE REFERENCED BID ARE THOSE THAT MAKE UP THE "-02" KIT.'

ON MAY 17, 1963, YOUR QUOTATION WAS ACCEPTED AND AWARD WAS MADE TO YOU AT YOUR QUOTED UNIT PRICES OF $5.39 PER KIT.

ON AUGUST 1, 1963, YOU ADVISED THE PROCURING ACTIVITY THAT YOUR UNIT PRICE FOR THE KITS WAS BASED ON YOUR DETERMINATION THAT ONLY ONE BEARING, LISTED AS P/N 24150 UNDER ITEM NO. 14 OF THE RFP, WOULD BE REQUIRED FOR EACH KIT INSTEAD OF THE FOUR ACTUALLY CALLED FOR. YOUR LETTER TO OUR OFFICE ADVISES THAT IN BEING REQUIRED TO FURNISH THE ADDITIONAL THREE BEARINGS PER KIT, YOU INCURRED A LOSS. WORKSHEETS SUBMITTED BY YOU AND A LETTER DATED MARCH 1, 1963, FROM MINIATURE PRECISION BEARINGS, INCORPORATED, TEND TO SUPPORT THE POSITION THAT YOUR PROPOSAL WAS BASED ON FURNISHING ONE BEARING, P/N 24150, PER KIT UNDER ITEM NO. 14. IT SHOULD BE NOTED, HOWEVER, THAT ITEM NO. 14 SPECIFYING FOUR BEARINGS, IS INCLUDED WITHIN ITEMS 1 THROUGH 26, AND YOUR LETTER, QUOTED ABOVE, CONFIRMED THAT YOUR "A-02" KIT INCLUDES ALL THE REQUIREMENTS FOR THESE ITEMS.

IT IS ESTABLISHED THAT THE RESPONSIBILITY FOR THE PREPARATION OF BIDS IS ON THE BIDDER WHO IS PRESUMED TO BE QUALIFIED TO ESTIMATE THE PRICES WHICH CAN BE CHARGED IN ORDER TO REALIZE A REASONABLE PROFIT. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120,163. ARMED SERVICES PROCUREMENT REGULATION SEC. 2-406.1 PLACES A DUTY ON A CONTRACTING OFFICER TO VERIFY A BID IF THERE IS AN APPARENT MISTAKE IN THE BID OR IF THE CONTRACTING OFFICER HAS REASON TO BELIEVE THAT A MISTAKE HAS BEEN MADE. THE RECORD ESTABLISHES THAT THE BUYER REQUESTED CONFIRMATION OF CERTAIN ASPECTS OF YOUR PROPOSAL INCLUDING VERIFICATION OF THE UNIT PRICE QUOTED IN YOUR PROPOSAL AND THAT YOUR LOCAL OFFICE TRANSMITTED PART OF THE BUYER'S REQUEST TO YOUR WESTERN DIVISION OFFICE. IT SEEMS CLEAR THAT YOU ACCEPTED THE CHANNEL USED BY THE BUYER FOR TRANSMITTING THE REQUEST FOR VERIFICATION OF YOUR UNIT PRICE. WHILE YOUR LOCAL OFFICE MAY NOT HAVE TRANSMITTED THE ENTIRE MESSAGE OF THE BUYER TO YOUR WESTERN DIVISION OFFICE, WE FIND NO BASIS IN THESE CIRCUMSTANCES TO IMPOSE UPON THE GOVERNMENT THE RESPONSIBILITY FOR THE INTERNAL TRANSMISSION OF A MESSAGE BY ONE DIVISION OF YOUR ORGANIZATION TO ANOTHER DIVISION OF YOUR ORGANIZATION. THERE IS NO EVIDENCE THAT THE BUYER HAD ACTUAL NOTICE OF AN ERROR IN YOUR PROPOSAL. YOUR LETTER OF APRIL 12, 1963, WHICH WAS IN RESPONSE TO THE BUYER'S SPECIFIC REQUEST FOR VERIFICATION INCLUDING YOUR UNIT PRICE, WAS CONSTRUED BY THE BUYER--- AND WE THINK REASONABLY -- AS VERIFICATION OF ALL OF THE QUESTIONED ELEMENTS OF YOUR PROPOSAL. IN THIS REGARD THE RULE IS WELL ESTABLISHED THAT WHERE A COMPANY CONFIRMS ITS BID PRIOR TO AWARD, ANY ASSUMPTION OF BAD FAITH OR THAT THE CONTRACTING OFFICER SOUGHT TO TAKE ADVANTAGE OF THE COMPANY IS PRECLUDED. SEE 27 COMP. GEN. 17; B-151735, SEPTEMBER 11, 1963. MOREOVER, AFTER THE AFFIRMATION OF YOUR PROPOSAL THE BUYER WAS UNDER NO OBLIGATION TO MAKE FURTHER INQUIRY OF YOU REGARDING THE CORRECTNESS OF YOUR QUOTATION. SEE CARNEGIE STEEL COMPANY V. CONNELLY, 89 N.J.L. 1, 97 A. 774; SHRIMPTON MANUFACTURING COMPANY V. BRIN, 59 TEX.CIV.APP. 352, 125 S.W. 942. THESE CIRCUMSTANCES WE FIND THAT THE ACCEPTANCE OF YOUR PROPOSAL WAS IN GOOD FAITH, THE CONTRACTING OFFICER NOT HAVING BEEN ON ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR PRIOR TO AWARD; CONSEQUENTLY, THE AWARD TO YOU CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES THERETO.

UPON THE ACCEPTANCE OF YOUR PROPOSAL THE RIGHT VESTED IN THE GOVERNMENT TO RECEIVE PERFORMANCE STRICTLY IN ACCORDANCE WITH ITS TERMS, AND, IN THE ABSENCE OF STATUTE SPECIFICALLY SO PROVIDING, NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER THAT RIGHT WITHOUT ADEQUATE CONSIDERATION. SEE 36 COMP. GEN. 27.