B-159534, JUL. 19, 1966

B-159534: Jul 19, 1966

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO A LETTER DATED JUNE 23. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. V7018P-1212E IS BASED. 13 AND 14 WAS ACCEPTED ON MAY 11. THE COMPANY STATED THAT THE CORRECT PRICES FOR THOSE ITEMS WERE $8.50 AND $4.35. 13 AND 14 WAS $3.24 EACH INSTEAD OF $3.43 EACH. IT ALSO IS STATED THAT IN COMPUTING ITS INTENDED BID PRICE FOR ITEM 7. IT IS FURTHER STATED THAT FROM AN EXAMINATION OF ALL THE PRICES QUOTED BY THE COMPANY IN ITS BID IT APPEARS THAT IT INTENDED TO OFFER APPROXIMATELY 28 PERCENT OFF LIST ON ITS BID. IT IS UNDERSTOOD INFORMALLY THAT BOTH BIDDERS OFFERED TO FURNISH INSTRUMENTS MANUFACTURED IN THE UNITED STATES. HE SHOULD HAVE SUSPECTED AN ERROR IN THE BID OF THE COMPANY AND REQUESTED CONFIRMATION THEREOF.

B-159534, JUL. 19, 1966

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JUNE 23, 1966, FILE 074B, FROM THE DIRECTOR, SUPPLY MANAGEMENT SERVICE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN IN REGARD TO ERRORS ALLEGED BY V. MUELLER AND CO. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. V7018P-1212E IS BASED.

THE MARKETING DIVISION, MEDICAL-DENTAL SCIENTIFIC SUPPLIES, HINES, ILLINOIS, BY INVITATION NO. M1-17-67, REQUESTED BIDS FOR FURNISHING VARIOUS SURGICAL INSTRUMENTS. IN RESPONSE V. MUELLER AND CO. SUBMITTED A BID DATED MAY 9, 1966, TO FURNISH DIFFERENT TYPES OF SURGICAL INSTRUMENTS TO THE VARIOUS VA SUPPLY DEPOTS LISTED UNDER ITEMS 1 TO 26, INCLUSIVE, AT THE PRICES SET FORTH OPPOSITE EACH ITEM. THE BID OF THE COMPANY AS TO ITEMS 7, 10, 12, 13 AND 14 WAS ACCEPTED ON MAY 11, 1966.

BY LETTERS DATED MAY 24 AND JUNE 1 AND 3, 1966, THE COMPANY ADVISED THAT ERRORS HAD BEEN MADE IN ITS BID IN REGARD TO THE PRICES QUOTED FOR ITEMS 7, 10, 12, 13, 14 AND OTHER ITEMS. IN REGARD TO ITEMS 7 AND 10, THE COMPANY STATED THAT THE CORRECT PRICES FOR THOSE ITEMS WERE $8.50 AND $4.35, RESPECTIVELY, INSTEAD OF $3.57 AND $3.60 EACH. IT ALSO STATED THAT THE CORRECT PRICE FOR ITEMS 12, 13 AND 14 WAS $3.24 EACH INSTEAD OF $3.43 EACH. THE COMPANY REQUESTED THAT THE CONTRACT PRICES FOR ITEMS 7, 10, 12, 13 AND 14 BE CORRECTED ACCORDINGLY. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS WORKSHEETS WHICH APPEAR TO BE A COPY OF THE INVITATION AND ITS PRINTED PRICE LIST. IN HIS REPORT OF JUNE 7, 1966, THE CONTRACTING OFFICER STATES THAT THE COMPANY'S WORKSHEETS INDICATE THAT IN COMPUTING ITS ORIGINAL BID PRICE FOR ITEM 7, THE COMPANY GRANTED A DISCOUNT OF 69.74 PERCENT FROM THE LIST PRICE SHOWN ON ITS PRINTED PRICE LIST. IT ALSO IS STATED THAT IN COMPUTING ITS INTENDED BID PRICE FOR ITEM 7, THE COMPANY GRANTED A DISCOUNT OF 27.96 PERCENT FROM THE LIST PRICE SHOWN IN ITS PRINTED PRICE LIST FOR THAT ITEM. ALSO, IT IS FURTHER STATED THAT FROM AN EXAMINATION OF ALL THE PRICES QUOTED BY THE COMPANY IN ITS BID IT APPEARS THAT IT INTENDED TO OFFER APPROXIMATELY 28 PERCENT OFF LIST ON ITS BID.

THE ABSTRACT OF BIDS SHOWS THAT V. MUELLER AND CO. QUOTED A PRICE OF $3.57 EACH FOR ITEM 7 AND THAT THE ONLY OTHER BIDDER ON THAT ITEM QUOTED A PRICE OF $7 EACH. IT IS UNDERSTOOD INFORMALLY THAT BOTH BIDDERS OFFERED TO FURNISH INSTRUMENTS MANUFACTURED IN THE UNITED STATES. IN HIS SUPPLEMENTAL REPORT OF JUNE 15, 1966, IN WHICH HE RECOMMENDED THAT ITEM 7 OF THE CONTRACT BE CANCELED, THE CONTRACTING OFFICER STATES THAT IN VIEW OF THE FACT THAT MUELLER QUOTED A PRICE OF $7.90 EACH FOR THE SAME ITEM UNDER A PREVIOUS INVITATION AND HAVING KNOWLEDGE OF A RISING MARKET, HE SHOULD HAVE SUSPECTED AN ERROR IN THE BID OF THE COMPANY AND REQUESTED CONFIRMATION THEREOF. WE AGREE WITH THE CONTRACTING OFFICER THAT, UNDER THE CIRCUMSTANCES IN THIS CASE, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID. IT IS REPORTED THAT MUELLER HAS NOT BEGUN MANUFACTURE OF ITEM 7. SINCE MUELLER'S BID WOULD NO LONGER BE LOW IF CORRECTION WERE PERMITTED, ITEM 7 OF CONTRACT NO. V7018P- 1212E MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.

THE ABSTRACT OF BIDS SHOWS THAT ON ITEM 10, MUELLER QUOTED A PRICE OF $3.60 EACH AND THAT THE TWO OTHER BIDDERS QUOTED UNIT PRICES OF $4.90 AND $10.68. IN VIEW OF THE DIFFERENCE BETWEEN THE AMOUNT OF MUELLER'S BID AND THE AMOUNTS QUOTED BY THE OTHER BIDDERS, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF AN ERROR IN THE COMPANY'S BID ON THAT ITEM AND THAT THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID. ACCORDINGLY, SINCE MUELLER HAS ESTABLISHED ITS INTENDED BID PRICE, CONTRACT NO. V7018P-1212E MAY BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $4.35 FOR THE SURGICAL INSTRUMENT COVERED BY ITEM 10 AND PAYMENT FOR THE INSTRUMENTS IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID AS CORRECTED WILL STILL BE THE LOWEST BID RECEIVED ON THAT ITEM.

IN REGARD TO THE REQUESTED CORRECTION OF THE PRICE FOR ITEMS 12, 13 AND 14, SINCE SUCH CORRECTION INVOLVES A REDUCTION IN PRICE, THERE APPEARS NO BASIS UPON WHICH WE COULD OBJECT TO SUCH CORRECTION. ACCORDINGLY, CONTRACT NO. V7018P-1212E MAY BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $3.24 FOR THE SURGICAL INSTRUMENTS COVERED BY ITEMS 12, 13 AND 14 AND PAYMENT FOR THE INSTRUMENTS IS AUTHORIZED TO BE MADE ON THAT BASIS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO THE CONTRACT.