B-160381, DEC. 2, 1966

B-160381, DEC. 2, 1966

TO THE ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 3, 1966, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, SUBMITTING FOR OUR DECISION A REQUEST BY EAST RUTHERFORD SYRINGES INCORPORATED, FOR RELIEF UNDER CONTRACT NO. V797P-1135 AWARDED BY THE VETERANS ADMINISTRATION (VA) MARKETING DIVISION, MEDICAL-DENTAL-SCIENTIFIC SUPPLIES, HINES, ILLINOIS.

THE VA MARKETING DIVISION REQUESTED BIDS--- TO BE OPENED SEPTEMBER 7, 1966--- FOR FURNISHING, AMONG OTHER ITEMS, VARIOUS QUANTITIES OF SYRINGES. IN RESPONSE EAST RUTHERFORD SYRINGES INCORPORATED SUBMITTED A BID DATED SEPTEMBER 2, 1966, OFFERING TO FURNISH THE 2 CC. SYRINGES COVERED BY ITEM 22 AND ITEMS 33 THRU 37 AT A PRICE OF $0.255 EACH AND TO FURNISH THE 5 CC. SYRINGES COVERED BY ITEM 23 AND ITEMS 38 THRU 42 AT A PRICE OF $0.38 EACH. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDDERS QUOTED UNIT PRICES OF $0.34 (FOREIGN PRODUCT) AND $0.4297 FOR THE 2 CC. SYRINGES COVERED BY ITEM 22 AND ITEMS 33 THRU 37 AND THAT THESE SAME BIDDERS QUOTED UNIT PRICES OF $0.49 (FOREIGN PRODUCT) AND $0.5683 FOR THE 5 CC. SYRINGES COVERED BY ITEM 23 AND ITEMS 38 THRU 42.

IT IS REPORTED THAT THE CONTRACTING OFFICER, NOTING THE CONSIDERABLE DISPARITY BETWEEN THE LOW BIDS OF EAST RUTHERFORD AND THE PRICES PREVIOUSLY BID ON THE SAME ITEMS, REQUESTED THE BIDDER BY TELEPHONE ON SEPTEMBER 8, 1966, TO VERIFY ITS BID ON THE ABOVE ITEMS, AT WHICH TIME THE CORPORATION VERBALLY CONFIRMED ITS PRICES ON THESE ITEMS. AT THE TIME OF HIS REQUEST FOR VERIFICATION, THE CONTRACTING OFFICER ONLY INFORMED EAST RUTHERFORD THAT AN ERROR IN ITS BID WAS SUSPECTED BECAUSE THE PRICES OFFERED THEREIN WERE CONSIDERABLY LOWER THAN THE PRICES PREVIOUSLY OFFERED. ON THE BASIS OF SUCH CONFIRMATION, THE BID OF EAST RUTHERFORD FOR ITEMS 22, 23, AND 33 THRU 42 WAS ACCEPTED THEREBY CONSUMMATING CONTRACT NO. V797P-1135. IN A TELEPHONE CONVERSATION OF SEPTEMBER 21, 1966, THE CORPORATION NOTIFIED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN ITS BID ON THE 2 CC. SYRINGES COVERED BY ITEM 22 AND ITEMS 33 THRU 37 AND ON THE 5 CC. SYRINGES COVERED BY ITEM 23 AND ITEMS 38 THRU 42.

IN ITS LETTERS DATED SEPTEMBER 20 AND 23, 1966, THE CORPORATION ALLEGED THAT IT HAD ERRONEOUSLY QUOTED THE PRICES FOR CLEAR BARREL SYRINGES RATHER THAN GROUND BARREL SYRINGES AS REQUIRED BY THE SPECIFICATIONS. THE CORPORATION STATED THAT THE CORRECT PRICE FOR THE 2 CC. GROUND BARREL SYRINGES OF $0.375 EACH INSTEAD OF $0.255 EACH AND THAT THE CORRECT PRICE FOR THE 5 CC. GROUND BARREL SYRINGES IS $0.54 EACH INSTEAD OF $0.38 EACH. IN A LETTER DATED OCTOBER 25, 1966, THE CORPORATION ADVISED THE CONTRACTING OFFICER THAT IT HAD STARTED MANUFACTURE OF THE SYRINGES IMMEDIATELY UPON RECEIPT OF THE AWARD BECAUSE OF THE SHORT DELIVERY DATE AND THAT IT WAS WILLING TO ACCEPT THE AMOUNTS QUOTED BY THE NEXT LOWEST BIDDER WHICH WERE $0.34 EACH FOR THE 2 CC. SYRINGES AND $0.49 EACH FOR THE 5 CC. SYRINGES.

IN HIS LETTER OF NOVEMBER 3, 1966, THE DIRECTOR, SUPPLY SERVICE, STATES THAT BY REFERENCE TO THE LIST PRICES SHOWN IN EAST RUTHERFORD'S PRINTED PRICE LIST, IT APPEARS THAT THE CORPORATION HAD GRANTED A DISCOUNT OF 76 PERCENT ON THE 2 CC. SYRINGES, A DISCOUNT OF 71 PERCENT ON THE 5 CC. SYRINGES, AND A DISCOUNT OF 58 PERCENT ON THE 10 CC. SYRINGES AS TO WHICH ITEM NO ERROR HAS BEEN ALLEGED. THE DIRECTOR STATES THAT IN VIEW OF THE FACT THAT THE CORPORATION OFFERED ONLY A DISCOUNT OF 58 PERCENT IN ITS PREVIOUS BIDS ON THE 2 CC. AND 5 CC. SYRINGES, IT IS OBVIOUS THAT THE CORPORATION MADE A BONA FIDE MISTAKE IN ITS BID.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947; AND 27 ID. 17. HOWEVER, IN THE INSTANT CASE, IN VIEW OF THE CONSIDERABLE DISPARITY BETWEEN THE BID OF EAST RUTHERFORD AND THE TWO OTHER BIDS RECEIVED ON THESE ITEMS, IT DOES NOT APPEAR THAT THE TELEPHONIC REQUEST FOR BID VERIFICATION WAS ADEQUATE TO DISPEL THE EXISTING DOUBT THAT THE CONTRACTING OFFICER HAD AS TO THE CORRECTNESS OF THE BID. THEREFORE, THERE EXISTED AT THE TIME, AMPLE REASON TO REQUEST FURTHER CLARIFICATION OF THE BID PRIOR TO AWARD. IN THE CIRCUMSTANCES, AND SINCE THE ERROR HAS BEEN SATISFACTORILY EXPLAINED, EAST RUTHERFORD SHOULD NOT BE REQUIRED TO FURNISH THE SYRINGES COVERED BY ITEMS 22, 23, AND 33 THRU 42 AT THE PRICES QUOTED IN ITS BID.

THE RECORD INDICATES THAT EAST RUTHERFORD COMMENCED MANUFACTURE OF THE SYRINGES IMMEDIATELY UPON REQUEST OF THE AWARD. ACCORDINGLY, CONTRACT NO. V797P-1135 MAY BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $0.34 FOR THE 2 CC. SYRINGES COVERED BY ITEM 22 AND ITEMS 33 THRU 37 AND FOR A UNIT PRICE OF $0.49 FOR THE 5 CC. SYRINGES COVERED BY ITEM 23 AND ITEMS 38 THRU 42, AS RECOMMENDED BY THE DIRECTOR, AND PAYMENT FOR THE SYRINGES IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID OF EAST RUTHERFORD, AS CORRECTED, WILL NOT BE IN EXCESS OF THE NEXT LOW ACCEPTABLE BID FOR THE ITEMS AWARDED.

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