B-156338, APR. 20, 1965

B-156338: Apr 20, 1965

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO THE ACTING ADMINISTRATOR'S LETTER DATED MARCH 15. WHICHEVER IS LATER. GS-07S 9754 WAS AWARDED ON AUGUST 27. LETTERS WERE RECEIVED FROM THE CORPORATION CONFIRMING THE ERROR. 107 AND 108 WERE $0.1184. SEVEN OTHER BIDS WERE RECEIVED FOR ITEM NO. 64. WERE RECEIVED FOR ITEM NO. 107. NINE OTHER BIDS WERE RECEIVED FOR ITEM NO. 108. IN ADDITION TO THE FACT THAT THERE IS A SUBSTANTIAL DIFFERENCE BETWEEN THE LOW BIDS OF KERR-MCGEE OIL INDUSTRIES. SHOULD HAVE PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF KERR-MCGEE AND THE CORPORATION SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRIOR TO THE ACCEPTANCE THEREOF.

B-156338, APR. 20, 1965

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

REFERENCE IS MADE TO THE ACTING ADMINISTRATOR'S LETTER DATED MARCH 15, 1965, WITH ENCLOSURES, SUBMITTING FOR OUR CONSIDERATION A RECOMMENDATION THAT CONTRACT NO. GS-07S-9754, WITH KERR-MCGEE OIL INDUSTRIES, INC., BE REFORMED AS TO ITEMS NOS. 64, 107 AND 108.

UNDER DATE OF JUNE 19, 1964, THE FEDERAL SUPPLY SERVICE, REGION 7, FORT WORTH, TEXAS, ISSUED INVITATION NO. DA-P1-3059, SOLICITING BIDS FOR FURNISHING CERTAIN QUANTITIES OF GASOLINE AT THE DESTINATIONS SPECIFIED UNDER PROPOSED FEDERAL SUPPLY SCHEDULE CONTRACTS FROM THE DATE OF AWARD OR OCTOBER 1, 1964, WHICHEVER IS LATER, THROUGH SEPTEMBER 30, 1965. GENERAL SERVICES ADMINISTRATION FORM 1424, INCORPORATED IN THE INVITATION BY REFERENCE, SPECIFICALLY PROVIDED THAT FEDERAL TAXES BE INCLUDED IN THE BID PRICES. CONTRACT NO. GS-07S 9754 WAS AWARDED ON AUGUST 27, 1964, TO KERR- MCGEE COVERING THE FURNISHING OF ITEMS NOS. 64, 69, 79, 106, 107, 108, AND 110 FOR AN ESTIMATED 425,000 GALLONS OF GASOLINE. UNDER DATE OF OCTOBER 26, 1964, KERR-MCGEE ADVISED THE FORT WORTH OFFICE OF THE FEDERAL SUPPLY SERVICE BY TELEPHONE THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICES DID NOT INCLUDE THE FEDERAL TAX OF $0.04 A GALLON. SUBSEQUENTLY, LETTERS WERE RECEIVED FROM THE CORPORATION CONFIRMING THE ERROR, FURNISHING EVIDENCE THEREOF, AND REQUESTING THAT THE CONTRACT BE MODIFIED FROM THE EFFECTIVE DATE THEREOF TO PROVIDE FOR THE OMISSION IN THE BID PRICES OF THE FEDERAL GASOLINE TAX OF $0.04 A GALLON OR FOR SUCH OTHER RELIEF AS MIGHT BE AVAILABLE.

THE BIDS OF KERR-MCGEE OIL INDUSTRIES, INC., FOR ITEMS NOS. 64, 107 AND 108 WERE $0.1184, $0.11 AND $0.11638 A GALLON RESPECTIVELY. SEVEN OTHER BIDS WERE RECEIVED FOR ITEM NO. 64, RANGING FROM $0.1499 TO $0.1695 A GALLON; NINE OTHER BIDS, INCLUDING A POSTED PRICE BID, WERE RECEIVED FOR ITEM NO. 107, RANGING FROM $0.142 TO $0.1695 A GALLON; AND NINE OTHER BIDS WERE RECEIVED FOR ITEM NO. 108, RANGING FROM $0.1387 TO $0.1695 A GALLON. IN OUR OPINION THE CLOSE RANGE OF THE PRICES SUBMITTED BY ALL OF THE OTHER BIDDERS ON ITEMS NOS. 64, 107 AND 108, IN ADDITION TO THE FACT THAT THERE IS A SUBSTANTIAL DIFFERENCE BETWEEN THE LOW BIDS OF KERR-MCGEE OIL INDUSTRIES, INC., AND THE SECOND LOW BIDS, SHOULD HAVE PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF KERR-MCGEE AND THE CORPORATION SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRIOR TO THE ACCEPTANCE THEREOF. THE CONTRACTING OFFICER HAS STATED THAT THIS SHOULD HAVE BEEN DONE. MOREOVER, EVIDENCE OF RECORD, WHICH WAS FURNISHED BY THE KERR-MCGEE OIL INDUSTRIES, INC., APPEARS TO UNEQUIVOCALLY ESTABLISH THE ERROR ALLEGED BY THE CORPORATION.

IN VIEW OF THE FOREGOING, CONTRACT NO. GS-07S-9754 MAY BE MODIFIED RETROACTIVELY TO THE EFFECTIVE DATE THEREOF, AS RECOMMENDED BY YOU, TO REFLECT SUCH AN INCREASE IN PRICE FOR EACH OF ITEMS NOS. 64, 107 AND 108 AS WILL NOT EXCEED THE PRICES OF THE NEXT LOW ACCEPTABLE BIDS ON THESE ITEMS.

SINCE NEITHER COMPARATIVE BID PRICES NOR ANY OTHER CIRCUMSTANCES EXIST WITH RESPECT TO ITEMS NOS. 69, 79, 106 AND 110 UPON WHICH THE CONTRACTING OFFICER PROPERLY MAY BE CHARGED WITH NOTICE OF THE PROBABILITY OF AN ERROR IN THESE ITEMS, NO ADJUSTMENT IN PRICE THEREOF MAY BE AUTHORIZED.