B-160654, JAN. 17, 1967

B-160654: Jan 17, 1967

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VETERANS ADMINISTRATION: REFERENCE IS MADE TO LETTER DATED JANUARY 9. IT IS REPORTED THAT IN RESPONSE TO AN INFORMAL REQUEST FOR QUOTATION BY THE VETERANS ADMINISTRATION HOSPITAL. THE BID WAS RETURNED ON OCTOBER 25. IN EVALUATING THE BID THE CONTRACTING OFFICER AND A HOSPITAL STAFF MEMBER NOTED THAT THE UNIT PRICE BID WAS $8.50 LESS THAN THE EARLIER OFFER OF FEBRUARY 22. SINCE THE ITEM WAS BEING MANUFACTURED ON A NONPROFIT BASIS AND HAD RECENTLY BEEN REMOVED FROM RESEARCH STAGE TO LIMITED GENERAL USE. BASED ON THIS CONCLUSION THE CONTRACT WAS AWARDED AND CONFIRMING PURCHASE ORDER NO. 1580. WAS ISSUED. DOW CORNING CORPORATION ALLEGED THAT DUE TO A CLERICAL ERROR THE UNIT PRICE OF $10 WAS ERRONEOUS AND THAT THE PRICE SHOULD BE $18.50 PER ITEM.

B-160654, JAN. 17, 1967

TO ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO LETTER DATED JANUARY 9, 1967, FILE 134G, FROM THE DIRECTOR, SUPPLY SERVICE, REQUESTING OUR DECISIONS AS TO WHETHER, UNDER THE CIRCUMSTANCES SET FORTH BELOW, UNNUMBERED CONTRACT(PURCHASE ORDER NO. 1580) DATED OCTOBER 26, 1966, MAY BE AMENDED TO INCREASE THE UNIT PRICE SPECIFIED THEREIN.

IT IS REPORTED THAT IN RESPONSE TO AN INFORMAL REQUEST FOR QUOTATION BY THE VETERANS ADMINISTRATION HOSPITAL, NASHVILLE, TENNESSEE, THE DOW CORNING CORPORATION BY LETTER DATED FEBRUARY 22, 1966,OFFERED TO FURNISH SILICONE RUBBER MATS IN QUANTITIES OF 100 AND UP AT $18.50 EACH. INVITATION FOR BIDS NO. 67-39 WHO ISSUED ON OCTOBER 5, 1966, TO THE DOW CORNING CORPORATION, THE ONLY KNOWN SOURCE OF SUPPLY, CALLING FOR 380 SILICONE RUBBER MATS. THE BID WAS RETURNED ON OCTOBER 25, QUOTING A PRICE OF $10 EACH FOR THE MATS AND A TOTAL PRICE OF $3,800. IN EVALUATING THE BID THE CONTRACTING OFFICER AND A HOSPITAL STAFF MEMBER NOTED THAT THE UNIT PRICE BID WAS $8.50 LESS THAN THE EARLIER OFFER OF FEBRUARY 22; HOWEVER, THEY CONCLUDED THAT, SINCE THE ITEM WAS BEING MANUFACTURED ON A NONPROFIT BASIS AND HAD RECENTLY BEEN REMOVED FROM RESEARCH STAGE TO LIMITED GENERAL USE, NO MISTAKE HAD BEEN MADE IN THE BID. BASED ON THIS CONCLUSION THE CONTRACT WAS AWARDED AND CONFIRMING PURCHASE ORDER NO. 1580, DATED OCTOBER 26, 1966, WAS ISSUED.

IN LETTER DATED DECEMBER 12, 1966, DOW CORNING CORPORATION ALLEGED THAT DUE TO A CLERICAL ERROR THE UNIT PRICE OF $10 WAS ERRONEOUS AND THAT THE PRICE SHOULD BE $18.50 PER ITEM. IN SUPPORT OF ITS ALLEGATION OF ERROR DOW CORNING REFERS TO ITS PRIOR LETTER OF FEBRUARY 22, WHICH QUOTED A PRICE OF $18.50 EACH.

WE AGREE WITH THE OPINION OF THE DIRECTOR THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR IN THE FIRM'S BID OF $10 BECAUSE OF THE PREVIOUS OFFER. CONSEQUENTLY, RATHER THAN RATIONALIZING THE MATTER, WE THINK THAT THE CONTRACTING OFFICER SHOULD HAVE ASKED THE CORPORATION TO VERIFY ITS BID BEFORE ACCEPTANCE WAS MADE.

ACCORDINGLY, PURCHASE ORDER NO. 1580 MAY BE AMENDED TO PROVIDE A UNIT PRICE OF $18.50 FOR THE MATS. CF. B-15129, JUNE 26, 1963; B 158292, JANUARY 28, 1966. A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO THE PURCHASE ORDER.

THE FILE RECEIVED WITH THE LETTER OF JANUARY 9, 1967, IS RETURNED HEREWITH AS REQUESTED.