B-156780, JUN. 4, 1965

B-156780: Jun 4, 1965

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO LETTER DATED MAY 13. THE RECORD SHOWS THAT NO BIDS WERE RECEIVED ON ITEMS 12 AND 14 UNDER INVITATION NO. QUOTATIONS WERE REQUESTED FROM TEN FIRMS BY TELEGRAM (TWX) WITH FINER FOODS SALES COMPANY BEING THE ONLY RESPONSIVE BIDDER. WAS THE SAME ITEM THEY HAD BID ON A YEAR EARLIER. YOU STATE THAT WHEN INSPECTION WAS MADE OF THE POTATOES TENDERED BY THE VENDOR (THE INSPECTION HAVING BEEN MADE BY UNITED STATES DEPARTMENT OF AGRICULTURE INSPECTORS) AND THE POTATOES REJECTED. FINER FOODS SALES COMPANY INDICATED THAT THEIR ERROR WAS OBVIOUS BECAUSE OF THE AWARD MADE TO I.S.I.S. IFB M4 270-64) WHICH WAS OPENED ON APRIL 8. HIS RIGHT TO PROCEED WITH DELIVERY ON ITEM 14 WAS TERMINATED ON DECEMBER 23.

B-156780, JUN. 4, 1965

TO THE HONORABLE WILLIAM J. DRIVER, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED MAY 13, 1965, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, FILE 074B, REQUESTING OUR DECISION RELATIVE TO A MISTAKE IN QUOTATION OF PRICE ALLEGED AFTER AWARD BY FINER FOODS SALES COMPANY IN CONNECTION WITH THE NEGOTIATED AWARD OF CONTRACT NO. V7018P-4970B.

IN EXAMINING THE BACKGROUND OF THE PROCUREMENT IN QUESTION, THE RECORD SHOWS THAT NO BIDS WERE RECEIVED ON ITEMS 12 AND 14 UNDER INVITATION NO. M4-270-64, ISSUED BY THE VETERANS ADMINISTRATION, SUPPLY DEPOT, HINES, ILLINOIS. THEREUPON, QUOTATIONS WERE REQUESTED FROM TEN FIRMS BY TELEGRAM (TWX) WITH FINER FOODS SALES COMPANY BEING THE ONLY RESPONSIVE BIDDER. THE FINER FOODS SALES COMPANY, IN RESPONSE TO THE TELEGRAPHIC SOLICITATION, SUBMITTED A LETTER QUOTATION DATED APRIL 20, 1964, AS FOLLOWS:

"POTATOES, WHITE, DEHYDRATED, PRECOOKED, MASHED, TYPE IV, CLASS 1, IDAHO RUSSET--- IN ACCORDANCE WITH MIL SPEC MIL-P-1073A NO. 10 CANS, 6 CANS TO CASE.

CHART ITEM QUANTITY UNIT UNIT PRICE ----

12 FRANCONIA, VA. 3000 NO. 10 CAN .725

POTATOES, DEHYDRATED, SLICED--- IN ACCORDANCE WITH MIL-P-1073A 6/2 1/4 LB. CARTON TO CASE.

CHART

16 FRANCONIA, VA.1350 POUND .3407"

ON THE BASIS OF SUCH QUOTATION, THE CONTRACTING OFFICER ISSUED PURCHASE ORDER NO. 64-HI-41072 ON MAY 8, 1964, FOR THE POTATOES IN QUESTION.

THEREAFTER, BY LETTER OF JULY 29, 1964, FINER FOODS SALES COMPANY ALLEGED ERROR, HAVING ASSUMED THAT THE ITEM THEY INTENDED TO FURNISH, WAS THE SAME ITEM THEY HAD BID ON A YEAR EARLIER. YOU STATE THAT WHEN INSPECTION WAS MADE OF THE POTATOES TENDERED BY THE VENDOR (THE INSPECTION HAVING BEEN MADE BY UNITED STATES DEPARTMENT OF AGRICULTURE INSPECTORS) AND THE POTATOES REJECTED, THIS MISUNDERSTANDING CAME TO LIGHT. FINER FOODS SALES COMPANY INDICATED THAT THEIR ERROR WAS OBVIOUS BECAUSE OF THE AWARD MADE TO I.S.I.S. AT $1.49 (FOR ITEM 13, SAME KIND OF POTATOES, FOR DELIVERY TO KANSAS CITY, MISSOURI, IFB M4 270-64) WHICH WAS OPENED ON APRIL 8, 1964.

RESPECTING THE UNIT PRICE OF THE TYPE OF POTATOES INVOLVED, THE CONTRACTING OFFICER STATES AS FOLLOWS:

"2. THE VENDOR FURNISHED ITEM 12 AND 16, AND HIS RIGHT TO PROCEED WITH DELIVERY ON ITEM 14 WAS TERMINATED ON DECEMBER 23, 1964. NEGOTIATION ON ITEM 14 WAS CONDUCTED VIGOROUSLY, BUT WE WERE UNABLE TO PURCHASE THIS REQUIREMENT.

"3. WE RECEIVED A LETTER FROM FINER FOODS SALES CO., INC., DATED APRIL 1, 1965, ENCLOSING INVOICE NO. 17313, FOR A RECLAIM IN THE AMOUNT OF $2,325.00 FOR ITEM 12.

"4. WE BELIEVE FROM THE CIRCUMSTANCES INVOLVED THAT THE PILLSBURY MILLS, INC., ERRED IN QUOTING THE FINER FOODS SALES COMPANY IN BOTH INSTANCES ON THIS PRODUCT WHICH WAS NOT ACTUALLY DISCOVERED UNTIL CERTIFICATION FOR COMPLIANCE WAS MADE BY U.S.D.A. THIS WAS THE ONLY BID RECEIVED AND THE PRICES FOR PREVIOUS G.S.A. PURCHASES GANGED FROM $1.49 TO $1.83 FOR THIS ITEM. INVESTIGATION OF PREVIOUS AWARDS INDICATES THE AWARDING OFFICIAL SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE MISTAKE BEFORE THE AWARD. HOWEVER, DUE TO PERSONNEL CHANGES AND OTHER PRESSURES AT THE HEIGHT OF THE CANNING SEASON, DETAILED PRELIMINARY PROCEDURES WERE INADVERTENTLY OVERLOOKED.

"5. THE CONTRACTOR HAS BEEN PAID FOR ITEM 16, AND ON APRIL 1, 1965 SUBMITTED AN INVOICE FOR ITEM 12 ON THE ORIGINAL BID PRICE OF .725 PLUS A RECLAIM VOUCHER OF .775 FOR THE ALLEGED MISTAKE.'

MOREOVER, THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, STATES THAT HE IS ALSO OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR AND THEREFORE RECOMMENDS THAT FINERFOODS SALES COMPANY BE GRANTED RELIEF BY PERMITTING AN INCREASE IN THE UNIT PRICE OF 3,000 NO. 10 CANS OF ITEM 12 FROM $0.725 TO $1.50; AND A TOTAL INCREASE OF $2,325. WE CONCUR WITH THIS OPINION. IN THE CIRCUMSTANCES, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. ACCORDINGLY, THE ADJUSTMENT IN PRICE SUGGESTED BY THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, MAY BE GRANTED, AND A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER SUPPORTING PAYMENT.