B-155757, JAN. 4, 1965

B-155757, JAN. 4, 1965

TO THE HONORABLE LAWSON B. KNOTT, JR., ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 11, 1964, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE RED CIRCLE CORPORATION, BROOKLYN, NEW YORK, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. GS-00S 28433 IS BASED.

THE FEDERAL SUPPLY SERVICE, PROCUREMENT OPERATIONS DIVISION, NEW YORK, BY INVITATION NO. FPNSO-9Q-1992-A-N-3-17-64 SOLICITED OFFERS FOR DELIVERING WOODEN INDEX-CARD BOXES TO THE DESTINATIONS SPECIFIED UNDER ITEMS 1, 2, AND 3 OF THE INVITATION. IN RESPONSE THE RED CIRCLE CORPORATION SUBMITTED THE ONLY BID RECEIVED IN WHICH IT OFFERED TO FURNISH THE BOXES DESCRIBED UNDER ITEMS 1, 2, AND 3 AT UNIT PRICES OF $1.20, $1.41, AND $1.16, RESPECTIVELY, OR FOR AN AGGREGATE TOTAL PRICE OF $1,690,80. THE BID OF THE CORPORATION WAS ACCEPTED AS TO THESE ITEMS ON MARCH 31, 1964.

BY LETTER DATED JUNE 3, 1964, RED CIRCLE ADVISED THE CONTRACTING OFFICE THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT IT HAD FAILED TO INCLUDE IN ITS BID PRICES THE COST OF THE LABOR REQUIRED FOR THE MANUFACTURE OF THE BOXES. THE CORPORATION STATED THAT THE ERROR RESULTED FROM A MISUNDERSTANDING ON THE PART OF ITS FOREMAN IN READING THE PRESIDENT'S INSTRUCTION. IT ALSO STATED THAT THE CORRECT UNIT PRICES FOR THE BOXES REQUIRED UNDER ITEMS 1, 2 AND 3 ARE $3.66, $3.87, AND $3.62 EACH, RESPECTIVELY, AND THAT THE CORRECT AGGREGATE TOTAL PRICE FOR ALL OF THE BOXES IS $4,997.04. IN A LETTER DATED OCTOBER 16, 1964, THE CORPORATION REQUESTED THAT THE CONTRACT BE CANCELED. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED A COPY OF THE FOREMAN'S ESTIMATE SHEET WHICH SHOWS THE PRICES FOR MATERIALS AND FREIGHT; HOWEVER, NO PRICE APPEARS FOR THE COST OF LABOR.

ORDINARILY, WHERE, AS HERE, ONLY ONE BID IS RECEIVED ON AN ITEM, THERE IS NO BASIS FOR COMPARISON OF BIDS; HENCE, THERE IS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. SEE 17 COMP. GEN. 560; 26 ID. 415. HOWEVER, IN A FINDINGS AND DETERMINATION DATED OCTOBER 29, 1964, IN WHICH HE RECOMMENDED RESCISSION OF THE CONTRACT, THE CONTRACTING OFFICER STATED THAT IN VIEW OF THE CONSIDERABLE DIFFERENCE BETWEEN THE PRICES QUOTED BY THE CORPORATION FOR THE BOXES AND THE PRICES PAID FOR SUCH BOXES UNDER PREVIOUS CONTRACT, HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE CORPORATION'S BID. UNDER THE PREVIOUS CONTRACT REFERRED TO THE BOXES WERE PURCHASED AT PRICES RANGING FROM $2.60 EACH TO $2.70 EACH. UNDER A CONTRACT WHICH WAS AWARDED SUBSEQUENT TO THE AWARD OF THE CONTRACT IN QUESTION, THE BOXES WERE PROCURED AT PRICES OF $2.96 EACH F.O.B. SAVANNAH, GEORGIA, AND $3.18 EACH F.O.B. OAKLAND, CALIFORNIA. IN VIEW OF THE PRICES PREVIOUSLY PAID FOR THE BOXES, WE ALSO ARE OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS TO BE NO DOUBT THAT AN ERROR WAS MADE BY THE CORPORATION, AS ALLEGED. IT IS REPORTED THAT THE CORPORATION HAS NOT MADE ANY DELIVERIES OF THE BOXES. ACCORDINGLY, CONTRACT NO. GS-OOS-28433 MAY BE CANCELED WITHOUT LIABILITY TO THE RED CIRCLE CORPORATION, AS RECOMMENDED BY YOU.