B-160466, DEC. 19, 1966

B-160466, DEC. 19, 1966

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 23, 1966, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY J. J. NOE CHURCH INTERIORS, INC., TO HAVE BEEN MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 76 IS BASED.

THE VETERANS ADMINISTRATION HOSPITAL, BRONX, NEW YORK, BY INVITATION FOR BIDS NO. 66-63, REQUESTED BIDS FOR FURNISHING LABOR AND MATERIALS AND FOR PERFORMING ALL WORK NECESSARY FOR THE REMOVAL OF OLD PEWS AND THE INSTALLATION OF NEW PEWS AT THE CHAPELS OF THE HOSPITAL. IN RESPONSE J. J. NOE CHURCH INTERIORS, INC., SUBMITTED A BID DATED MAY 5, 1966, OFFERING TO FURNISH THE PEWS AND TO PERFORM THE NECESSARY WORK FOR AN AGGREGATE TOTAL PRICE OF $6,573. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDDERS QUOTED AGGREGATE TOTAL PRICES OF $10,888, $13,048 AND $13,660.

IT IS REPORTED THAT THE CONTRACTING OFFICER, NOTING THE CONSIDERABLE DISPARITY BETWEEN THE LOW BID OF CHURCH INTERIORS AND THE OTHER BIDS, REQUESTED THE COMPANY BY TELEPHONE ON MAY 16, 1966, TO VERIFY ITS BID, AT WHICH TIME IT VERBALLY CONFIRMED ITS BID PRICE. ON THE BASIS OF SUCH CONFIRMATION, THE BID OF CHURCH INTERIORS WAS ACCEPTED ON JULY 1, 1966.

IT IS REPORTED THAT AT A MEETING HELD ON OR ABOUT JULY 8, 1966, THE VICE PRESIDENT OF THE COMPANY ADVISED THE ASSISTANT SUPPLY OFFICER THAT HE HAD MADE A MISTAKE OF $220 IN THE INSTALLATION PRICE OF THE PEWS BUT THAT THE LOSS RESULTING FROM SUCH ERROR WOULD BE ABSORBED.

THE RECORD INDICATES THAT AT A CONFERENCE HELD ON AUGUST 22, 1966, MR. NOE ADVISED THE ASSISTANT SUPPLY OFFICER THAT IN COMPUTING HIS BID PRICE HE OVERLOOKED THE FACT THAT THE PEWS WERE TO BE SUPPLIED WITH SEAT CUSHIONS. IN A LETTER DATED AUGUST 24, 1966, THE VICE PRESIDENT OF THE COMPANY STATED THAT THE PRICE QUOTED ON THE NEW PEWS WAS BASED ON A SELECTION MADE BY TWO VETERANS ADMINISTRATION CHAPLAINS FROM SAMPLE PEWS IN ITS SHOWROOM; THAT THE PEW THE CHAPLAINS SELECTED HAD A SHAPED SEAT AND NO CUSHION; AND THAT HE AND MR. NOE DID NOT KNOW THAT THE PEWS WERE TO BE SUPPLIED WITH CUSHIONS. THE VICE PRESIDENT REQUESTED THAT THE CONTRACT PRICE OF THE PROJECT BE INCREASED BY $1,860 TO COVER THE COST OF THE CUSHIONS.

IN HIS LETTER OF NOVEMBER 23, 1966, IN WHICH HE RECOMMENDED THAT THE RELIEF REQUESTED BY CHURCH INTERIORS BE GRANTED, THE DIRECTOR, SUPPLY SERVICE, POINTS OUT THAT WHEN THE CONTRACTOR WAS REQUESTED TO VERIFY ITS BID PRICE IT WAS NOT SPECIFICALLY ADVISED THAT A MISTAKE WAS SUSPECTED OR OF THE BASIS FOR SUCH SUSPICION.

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 NOE CHURCH INTERIORS AND THE THREE OTHER BIDS RECEIVED ON THE PROJECT, IT DOES NOT APPEAR THAT THE TELEPHONIC REQUEST FOR BID VERIFICATION WAS ADEQUATE TO AFFORD THE BIDDER A SUFFICIENT OPPORTUNITY TO CHECK ITS BID SO THAT IT WOULD BE BOUND BY ITS ANSWER, SINCE IT DOES NOT APPEAR FROM THE RECORD THAT THE CONTRACTING OFFICER IN REQUESTING VERIFICATION ADVISED THE BIDDER OF THE WIDE DIFFERENCE BETWEEN ITS BID PRICE AND THE OTHER BIDS. MOREOVER, IT APPEARS THAT GOVERNMENT REPRESENTATIVES MAY HAVE INDUCED THE MISTAKE MADE BY NOE CHURCH INTERIORS BY SELECTING SAMPLE PEWS WHICH, BECAUSE OF A SHAPED SEAT, HAD NO SEAT CUSHIONS. IN THE CIRCUMSTANCES, THE BIDDER SHOULD NOT BE REQUIRED TO FURNISH THE REQUIRED PEWS AND PERFORM THE PROJECT WORK AT THE PRICE QUOTED IN ITS BID.

THE RECORD INDICATES THAT NOE CHURCH INTERIORS IS NOW MANUFACTURING THE PEWS AND SEAT CUSHIONS. ACCORDINGLY, PURCHASE ORDER NO. 76 MAY BE AMENDED TO PROVIDE FOR AN AGGREGATE TOTAL PRICE OF $8,433 FOR THE PROJECT, AS RECOMMENDED BY THE DIRECTOR, AND PAYMENT FOR THE WORK IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THE PROJECT.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT. AS REQUESTED, THE FILE FURNISHED WITH THE LETTER OF NOVEMBER 23, 1966, IS RETURNED.