B-157301, DEC. 29, 1965

B-157301: Dec 29, 1965

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED JULY 19. IT APPEARS FROM THE PAPERS ACCOMPANYING YOUR LETTER THAT BIDS FOR THIS PROCUREMENT WERE OPENED ON JANUARY 16. THE DIFFERENTIAL IN WEIGHTS BETWEEN THE THREE BIDDERS WAS NOT QUESTIONED. AWARD OF ITEM 4 WAS MADE TO FMC CORPORATION 19 FEBRUARY 1964 AND RESULTING CONTRACT NUMBER DA- 36-005-AMC-202 (T) * * * WAS TRANSFERRED TO THE SAN FRANCISCO PROCUREMENT DISTRICT FOR ADMINISTRATION. "4. DATED 26 OCTOBER 1964 * * * WAS RECEIVED FROM FMC CORPORATION REQUESTING THIS DEPOT FURNISH HIS COMPANY THE NAMES OF THE OTHER BIDDERS ON ITEM 4 OF THE CONTRACT AS WELL AS THE MAXIMUM WEIGHTS AND DUBES SUBMITTED IN THEIR PROPOSALS. THIS INFORMATION WAS FORWARDED BY LETTER.

B-157301, DEC. 29, 1965

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JULY 19, 1965, WITH ENCLOSURES, FROM THE ACTING GENERAL COUNSEL, HEADQUARTERS, UNITED STATES ARMY, MATERIEL COMMAND, FORWARDING THE CLAIM OF FMC CORPORATION FOR REFUND OF THE AMOUNT OF $647.48 WITHHELD BY THE GOVERNMENT TO COVER EXCESS TRANSPORTATION COST IN THE MAKING OF FINAL PAYMENT UNDER CONTRACT NO. DA 36-005-AMC-202 (T).

IT APPEARS FROM THE PAPERS ACCOMPANYING YOUR LETTER THAT BIDS FOR THIS PROCUREMENT WERE OPENED ON JANUARY 16, 1964; THAT THE MISTAKE ALLEGED BY FMC CORPORATION CONCERNS ONLY ITEM 4 OF THE INVITATION--- 932 EACH--- COVERS, TRACK, END SHROUD, ORDNANCE NO. 8756630, FIA-23253 (A); THAT FMC, IN ITS BID, SPECIFIED A GUARANTEED MAXIMUM SHIPPING WEIGHT OF 2,580 POUNDS; AND THAT FMC SUBMITTED THE LOWEST UNIT PRICE BID. IT ALSO APPEARS THAT THE SECOND LOW BIDDER SPECIFIED A GUARANTEED MAXIMUM SHIPPING WEIGHT OF 9,320 POUNDS, AND THE THIRD AND FINAL LOWER BIDDER SPECIFIED A GUARANTEED MAXIMUM SHIPPING WIGHT OF 5,126 POUNDS.

IN HIS DETERMINATION CONCERNING THE ALLEGED MISTAKE IN BID, DATED APRIL 19, 1965, THE CONTRACTING OFFICER STATES, IN PART, AS FOLLOWS:

"3. THE DIFFERENTIAL IN WEIGHTS BETWEEN THE THREE BIDDERS WAS NOT QUESTIONED, BASED ON THE GUARANTEED MAXIMUM SHIPPING WEIGHTS AND DIMENSIONS CLAUSE CONTAINED IN THE IFB. THEREFORE, AWARD OF ITEM 4 WAS MADE TO FMC CORPORATION 19 FEBRUARY 1964 AND RESULTING CONTRACT NUMBER DA- 36-005-AMC-202 (T) * * * WAS TRANSFERRED TO THE SAN FRANCISCO PROCUREMENT DISTRICT FOR ADMINISTRATION.

"4. ON 28 OCTOBER 1964, A LETTER, DATED 26 OCTOBER 1964 * * * WAS RECEIVED FROM FMC CORPORATION REQUESTING THIS DEPOT FURNISH HIS COMPANY THE NAMES OF THE OTHER BIDDERS ON ITEM 4 OF THE CONTRACT AS WELL AS THE MAXIMUM WEIGHTS AND DUBES SUBMITTED IN THEIR PROPOSALS. THIS INFORMATION WAS FORWARDED BY LETTER, DATED 29 OCTOBER 1964 * * *.

"5. LETTER, DATED 15 DECEMBER 1964 * * *, WAS RECEIVED FROM THE SAN FRANCISCO PROCUREMENT DISTRICT REQUESTING THIS PROCUREMENT OFFICE FURNISH OUR OPINION AS TO THE CLAIM LETTER, DATED 4 DECEMBER 1964 * * *, SUBMITTED BY FMC CORPORATION. THIS WAS THE FIRST NOTIFICATION THIS DEPOT HAD OF A MISTAKE IN BID. * * *.'

THE CONTRACTING OFFICER FURTHER STATES THAT IN HIS OPINION HE SHOULD HAVE NOTED THE DIFFERENCE IN THE GUARANTEED WEIGHTS OF BIDDERS AND REQUESTED CONFIRMATION BY THE APPARENT LOW BIDDER. IT IS REPORTED THAT DELIVERY UNDER THE CONTRACT AND PAYMENT THEREFOR WERE COMPLETED PRIOR TO THE ALLEGATION OF MISTAKE AND PRESENTATION OF THE CLAIM.

IN THE LETTER OF DECEMBER 4, 1964, TO THE SAN FRANCISCO PROCUREMENT DISTRICT, WHEREIN FMC PRESENTED ITS CLAIM FOR REIMBURSEMENT OF THE WITHHELD AMOUNTS, IT IS POINTED OUT THAT THE ACTUAL WEIGHT OF THE ITEM SHIPPED WAS 8,553 POUNDS, AN EXCESS OF 5,973 POUNDS OVER THE GUARANTEED MAXIMUM OF 2,580 POUNDS ON THE FMC BID. FMC CONTENDS THAT THE PROCUREMENT OFFICE SHOULD HAVE BEEN AWARE THAT AN ERROR HAD BEEN MADE, AND THAT IT WAS UNDER A DUTY TO VERIFY THE DATA. IN THE SAME LETTER FMC CITES THE GUARANTEED WEIGHTS OF THE TWO OTHER BIDDERS, BUT OVERLOOKS THE FACT THAT THE HIGH BIDDER'S GUARANTEE WAS ALSO SUBSTANTIALLY LESS THAN THE ACTUAL WEIGHT. WE HAVE STATED ON A NUMBER OF OCCASIONS THAT IN ORDER TO MEET COMPETITION A BIDDER MAY GUARANTEE A WEIGHT WHICH IS LESS THAN ACTUAL, RATHER THAN REDUCE THE PRICE FOR THE ITEM ITSELF. SEE 38 COMP. GEN. 821. IN THESE CIRCUMSTANCES WE CANNOT CONCLUDE THAT THE CONTRACTING OFFICE OR THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF ANY ERROR.

IT IS THEREFORE DETERMINED THAT EVEN THOUGH THE CONTRACTING OFFICER MAY HAVE RECOGNIZED THE GUARANTEED MAXIMUM WEIGHT AS UNREALISTICALLY LOW, HE HAD NO MORE REASON TO SUPPOSE IT DUE TO A MISTAKE THAN TO A DELIBERATE ACTION BY THE BIDDER THUS TO REDUCE HIS OVERALL BID EVALUATION. THE CLAIM FOR REFUND OF EXCESS FREIGHT CHARGES WITHHELD SHOULD BE REJECTED.