B-157901, NOV. 4, 1965

B-157901: Nov 4, 1965

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO LETTER DATED OCTOBER 21. AWARD OF CONTRACT WAS MADE ON OCTOBER 1. ISIS NOTIFIED THE PURCHASING ACTIVITY THAT AN ERROR ON THE SUBJECT ITEM 9 OF THE INVITATION WAS MADE IN "OUR COMPUTATION ON OUR WORK SHEET. ISIS ALSO POINTED OUT THAT IT WAS AWARDED A CONTRACT FOR APPLESAUCE FOR A PRICE HIGHER THAN THE APPLES WHICH CLEARLY INDICATED THAT THE PRICE OF THE APPLES WAS IN ERROR. WITH RESPECT TO SUCH ALLEGATION OF ERROR IT IS ADMINISTRATIVELY REPORTED THAT AN EXAMINATION OF THE ABSTRACT OF BIDS DISCLOSED THAT 16 FIRMS SUBMITTED BIDS FOR THE SUBJECT ITEM RANGING FROM A LOW BID OF $4.05 DELIVERED. IS OF THE VIEW THAT THE DISPARITY BETWEEN THE BID OF ISIS AND THE OTHER BIDS RECEIVED SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR.

B-157901, NOV. 4, 1965

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

REFERENCE IS MADE TO LETTER DATED OCTOBER 21, 1965, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, FILE 074B, REQUESTING OUR DECISION AS TO WHETHER ITEM 9 OF PURCHASE ORDER NO. 66-HI-40373, ISSUED TO ISIS FOODS, INC., MAY BE CANCELED.

THE RECORD SHOWS THAT PURSUANT TO ITS BID ON ITEM 9 OF INVITATION NO. M4- 117-66, AWARD OF CONTRACT WAS MADE ON OCTOBER 1, 1965, UNDER THE SUBJECT PURCHASE ORDER TO ISIS FOODS, INC., FOR 1200 CASES OF GRADE C CANNED APPLES AT $4.05 PER CASE, F.O.B. KANSAS CITY, MISSOURI.

THEREAFTER, BY LETTER DATED OCTOBER 4, 1965, ISIS NOTIFIED THE PURCHASING ACTIVITY THAT AN ERROR ON THE SUBJECT ITEM 9 OF THE INVITATION WAS MADE IN "OUR COMPUTATION ON OUR WORK SHEET; " AND ASKED THAT THE ITEM BE CANCELED. ISIS ALSO POINTED OUT THAT IT WAS AWARDED A CONTRACT FOR APPLESAUCE FOR A PRICE HIGHER THAN THE APPLES WHICH CLEARLY INDICATED THAT THE PRICE OF THE APPLES WAS IN ERROR. WITH RESPECT TO SUCH ALLEGATION OF ERROR IT IS ADMINISTRATIVELY REPORTED THAT AN EXAMINATION OF THE ABSTRACT OF BIDS DISCLOSED THAT 16 FIRMS SUBMITTED BIDS FOR THE SUBJECT ITEM RANGING FROM A LOW BID OF $4.05 DELIVERED, A SECOND LOW BID OF $4.30 F.O.B. PLANT OR $4.77666 DELIVERED, TO THE HIGHEST BID OF $5.215 F.O.B. WATSONVILLE, CALIFORNIA. THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, IS OF THE VIEW THAT THE DISPARITY BETWEEN THE BID OF ISIS AND THE OTHER BIDS RECEIVED SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. IN ADDITION, THE CONTRACTING OFFICER'S SUMMARIES FOR PURCHASES BETWEEN JUNE 1964 AND OCTOBER 1965 SUBSTANTIATE ISIS' CONTENTION THAT AN ERROR WAS COMMITTED, SINCE THE AVERAGE COST OF GRADE C APPLIES IS APPROXIMATELY $0.82 GREATER THAN GRADE A APPLESAUCE FOR IDENTICAL SIZE CASES OF 6--- NO. 10 CANS.

IN VIEW OF THE FOREGOING, THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, RECOMMENDS CANCELLATION OF THE 1200 CASES OF ITEM 9, TOTALING $4,860 FROM PURCHASE ORDER NO. 66-HI-40373. WE CONCUR IN THIS RECOMMENDATION. IN THE CIRCUMSTANCES, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION. ACCORDINGLY, THE CANCELLATION RECOMMENDED BY THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, MAY BE MADE.