B-160428, NOV. 29, 1966

B-160428, NOV. 29, 1966

TO THE HONORABLE JAMES L. HARRISON:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 21, 1966, WITH ENCLOSURES, REQUESTING OUR DECISION AS TO WHETHER YOU MAY CANCEL A CONTRACT AWARDED TO FISHER BOOKBINDING COMPANY, INC., BECAUSE OF AN ERROR IT ALLEGES IT MADE IN ITS BID UPON WHICH THE CONTRACT WAS BASED.

INVITATION FOR BIDS ON JACKET NO. 233-118 SOLICITED BIDS FOR FURNISHING 335,064 RULED RECORD BOOKS, INDEXED THROUGHOUT. FISHER SUBMITTED A BID IN THE AMOUNT OF $455,647, REPRESENTING A UNIT PRICE OF $1.359. THE ONLY OTHER BIDDER WAS S. E. AND M. VERNON, INC., AT A UNIT PRICE OF $1.65, HOWEVER, VERNON'S BID WAS NONRESPONSIVE TO THE INVITATION FOR BIDS BECAUSE THE MATERIAL PROPOSED FOR USE WAS INFERIOR TO THAT CALLED FOR BY THE SPECIFICATIONS AND THE BIDDER INDICATED THAT IT COULD NOT MEET THE REQUIRED DELIVERY SCHEDULE.

ON NOVEMBER 2, 1966, THE CONTRACT WAS AWARDED AND PURCHASE ORDER NO. 47609 WAS ISSUED TO FISHER. ON NOVEMBER 3, 1966, FISHER ADVISED THAT IT HAD MADE AN ERROR OF MORE THAN $100,000 AND ASKED THAT IT BE ALLOWED TO CORRECT ITS BID. BY LETTER DATED NOVEMBER 7, FISHER SUBMITTED ITS ORIGINAL WORKSHEET AND A REVISED WORKSHEET AND ALLEGED THAT AN ERROR WAS MADE IN THE PAPER COST AND IN THE PRINTING. THE CORRECTED WORKSHEET SHOWS INCREASES IN COST OF PAPER FROM $60,480 TO $162,600; AND SHEETS FROM $4,188.41 TO $4,608; RULING FROM $15,750 TO $35,000; AND HANDLING CHARGE AND PROFIT FROM $45,234.39 TO $75,681.80, FOR A TOTAL INCREASE OF $152,237.

YOU STATE THAT ALTHOUGH THE WORKSHEETS SUBMITTED ARE INCONCLUSIVE REGARDING THE ALLEGED ERROR YOU BELIEVE THAT THE FOLLOWING FACTORS ARE FOR CONSIDERATION. YOU POINT OUT THAT THE ONLY OTHER BID FOR A PRODUCT USING MATERIALS INFERIOR TO THE REQUIREMENTS OF THE SPECIFICATIONS WAS AT A UNIT PRICE OF $1.65, AS COMPARED TO A UNIT PRICE OF $1.359 SUBMITTED BY FISHER FOR A PRODUCT IN STRICT ACCORD WITH THE SPECIFICATIONS. ALSO, YOUR OWN ESTIMATE FOR THE PAPER REQUIRED TO FULFILL THE CONTRACT IS $138,961.35. YOU SUGGEST THAT THESE CIRCUMSTANCES COMBINE TO INDICATE THE POSSIBILITY OF ERROR AND THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED A VERIFICATION OF THE BID BUT DUE TO EXTREME WORK PRESSURES THIS WAS NOT DONE. IN VIEW OF THE FOREGOING, YOU STATE THAT YOU HAVE NO DOUBT THAT A MISTAKE WAS MADE; HOWEVER, YOU ARE OF THE OPINION THAT THE ORDER CAN BE FILLED AT A LOWER COST THAN THE REVISED BID OF $607,884. CONSEQUENTLY, YOU PROPOSE WITH OUR APPROVAL TO CANCEL THE CONTRACT WITHOUT LIABILITY TO THE CONTRACTOR.

IT IS APPARENT THAT THE UNIT PRICE QUOTED BY VERNON WHICH OFFERED INFERIOR MATERIAL PROPERLY COULD NOT HAVE BEEN CONSIDERED COMPARABLE WITH THE PRICE QUOTED BY FISHER ON MATERIAL FULLY MEETING THE GOVERNMENT'S REQUIREMENTS. CONSIDERING THAT THE PRICE QUOTED BY VERNON ON INFERIOR MATERIAL WAS OVER 21 PERCENT HIGHER THAN THAT QUOTED BY FISHER FOR SPECIFICATION MATERIAL WE AGREE WITH YOU THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR AND SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO ITS ACCEPTANCE. MOREOVER, SINCE YOU STATE THAT YOUR ESTIMATE FOR THE COST OF PAPER ALONE IS OVER $78,000 HIGHER THAN THAT INCLUDED IN THE ORIGINAL BID BY FISHER WE THINK IT WOULD BE INEQUITABLE TO REQUIRE THE CONTRACTOR TO FURNISH THE RECORD BOOKS FOR THE ERRONEOUS PRICE QUOTED.