B-154166, AUG. 5, 1964

B-154166: Aug 5, 1964

Additional Materials:

Contact:

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

 

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

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 12. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA 23-012-AMC 8/A) IS BASED. THE BID OF BRISTOL DYNAMICS WAS ACCEPTED ON SEPTEMBER 6. WAS OMITTED FROM ITS BID PRICE. IT IS REPORTED THAT THREE GUN MOUNTS OF THE TYPE REQUIRED UNDER THIS INVITATION WERE PREVIOUSLY PROCURED FROM THE TWIN CITY TOOL CO. ORDINARILY A WIDE DISPARITY IN BID PRICES IS OF NO SIGNIFICANCE IF. THERE ARE TWO OR MORE LOW BIDS WHICH ARE CLOSELY IN LINE. THERE ARE ADDITIONAL FACTORS WHICH ARE FOR CONSIDERATION HERE. WE BELIEVE IT IS REASONABLE TO CONCLUDE THAT THESE FACTORS SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THESE TWO BIDS.

B-154166, AUG. 5, 1964

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 12, 1964, WITH ENCLOSURES, FROM THE DEPUTY DIRECTOR, PROCUREMENT AND PRODUCTION, UNITED STATES ARMY MATERIEL COMMAND, SUBMITTED IN RESPONSE TO A LETTER OF OUR OFFICE DATED MAY 18, 1964, TO YOU, REQUESTING A REPORT RELATIVE TO AN ERROR ALLEGED BY BRISTOL DYNAMICS, INC., BROOKLYN, NEW YORK, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA 23-012-AMC 8/A) IS BASED.

THE LAKE CITY ORDNANCE PLANT (NOW KNOWN AS THE LAKE CITY AMMUNITION PLANT), INDEPENDENCE, MISSOURI, REQUESTED BIDS FOR FURNISHING 10 GUN MOUNTS TO BE MANUFACTURED IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS. IN RESPONSE BRISTOL DYNAMICS, INC., SUBMITTED A BID OFFERING TO FURNISH THE GUN MOUNTS AT A UNIT PRICE OF $1,335.96. THE SECOND LOW BIDDER, RAY, DAISLEY CO., INC., QUOTED A PRICE OF $1,362. THE OTHER BIDS RANGED FROM $1,937 TO $4,340. THE BID OF BRISTOL DYNAMICS WAS ACCEPTED ON SEPTEMBER 6, 1963.

IN A LETTER DATED OCTOBER 9, 1963, BRISTOL DYNAMICS, INC., ADVISED THE CONTRACTING OFFICE THAT IT HAD MADE AN ERROR IN ITS BID PRICE FOR THE GUN MOUNTS IN THAT IT HAD FAILED TO INCLUDE THEREIN TOOLING COSTS AMOUNTING APPROXIMATELY $17,000. THE CORPORATION REQUESTED THAT THE CONTRACT BE CANCELED WITHOUT LIABILITY TO THE CORPORATION. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS WORKSHEETS WHICH SHOW MATERIAL COSTS OF $1,000.30, CRATING AND SHIPPING COSTS OF $125 AND G AND A AND PROFIT AT $135.04 AND $75.62, RESPECTIVELY, FOR A TOTAL OF $1,335.96, THE CORPORATION'S UNIT BID PRICE FOR THE GUN MOUNTS. THE WORKSHEETS ALSO SHOW TOOLING COSTS OF $17,150, WHICH AMOUNT, THE CORPORATION ALLEGES, WAS OMITTED FROM ITS BID PRICE.

IT IS REPORTED THAT THREE GUN MOUNTS OF THE TYPE REQUIRED UNDER THIS INVITATION WERE PREVIOUSLY PROCURED FROM THE TWIN CITY TOOL CO., INC., AT A UNIT PRICE OF $2,327.70 UNDER CONTRACT NO. DA 23-012-ORD 206 DATED DECEMBER 2, 1958, AND THAT IN RESPONSE TO THIS INVITATION THAT CORPORATION QUOTED A UNIT PRICE OF $4,340 FOR THE GUN MOUNTS. THE FILE CONTAINS A PURCHASE REQUEST AND COMMITMENT FORM (DA 14-115), ADDRESSED TO THE PURCHASING AND CONTRACTING OFFICER, WHICH SHOWS THAT THE GOVERNMENT ESTIMATED A UNIT PRICE OF $3,000 FOR THE GUN MOUNT.

ORDINARILY A WIDE DISPARITY IN BID PRICES IS OF NO SIGNIFICANCE IF, AS HERE, THERE ARE TWO OR MORE LOW BIDS WHICH ARE CLOSELY IN LINE. B 154125, MAY 21, 1964. HOWEVER, THERE ARE ADDITIONAL FACTORS WHICH ARE FOR CONSIDERATION HERE, NAMELY, THE SUBSTANTIAL DIFFERENCE BETWEEN THE LOW BIDS AND THE GOVERNMENT'S ESTIMATED PRICE AND THE PRICE PAID UNDER A PRIOR PROCUREMENT. WE BELIEVE IT IS REASONABLE TO CONCLUDE THAT THESE FACTORS SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THESE TWO BIDS. THEREFORE, AS ADMINISTRATIVELY SUGGESTED, THE LOW BIDS SHOULD NOT HAVE BEEN CONSIDERED WITHOUT REQUESTING VERIFICATION.

ACCORDINGLY, AND SINCE IT IS REPORTED THAT NO WORK HAS BEEN COMMENCED BY BRISTOL, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY, AS RECOMMENDED BY THE ADMINISTRATIVE OFFICE.

THE DRAWINGS COVERING THE GUN MOUNTS ARE RETURNED. THE OTHER PAPERS IN THE CASE ARE BEING RETAINED.