B-161221, APR. 21, 1967

B-161221: Apr 21, 1967

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO LETTER DPSC-OK/L. WAS ISSUED TO THE A. WE ARE ADVISED THAT AT THE TIME OF ISSUANCE OF THE NIP THE CONTRACTING OFFICER WAS AWARE. THAT ITEM NO. 0134 WAS PACKAGED ONLY IN 20 OUNCE BAGS. WAS UNCHANGED IN THE OFFER. AWARD WAS MADE ON AUGUST 10. DELIVERY OF ALL OF THE CONTRACT ITEMS WAS COMPLETED. WAS WITHHELD PENDING OUR DECISION IN THE MATTER. OR SHOULD HAVE KNOWN. THAT WEST PAC BRAND SHOESTRING POTATOES WERE PACKAGED ONLY IN 20 OUNCE BAGS. A REVIEW OF THREE SIMILAR PURCHASES MADE DURING THE SIX MONTH PERIOD IMMEDIATELY PRECEDING THE INSTANT PURCHASE REVEALS THAT THE CONTRACTS WERE ALL AWARDED ON THE BASIS OF 20 OUNCE BAGS. CALLED ATTENTION TO THE FACT THAT HE WAS OFFERING 20 OUNCE BAGS.

B-161221, APR. 21, 1967

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO LETTER DPSC-OK/L, DATED MARCH 29, 1967, FROM THE CHIEF, PURCHASING DIVISION, SUBSISTENCE REGIONAL HEADQUARTERS OAKLAND, DEFENSE PERSONNEL SUPPORT CENTER, ALAMEDA, CALIFORNIA, REQUESTING AUTHORIZATION TO AMEND PURCHASE ORDER NO. DSA 137 7 M 56607, IN ORDER THAT IT MAY REFLECT THE TRUE INTENT OF THE PARTIES.

THE RECORD INDICATES THAT DURING JULY 1966, A NOTICE OF INTENT TO PURCHASE (NIP), CONTAINING, AMONG OTHER THINGS, ITEM NO. 0134, A REQUIREMENT FOR A TOTAL OF 840 BAGS OF WEST PAC BRAND SHOESTRING POTATOES, WEIGHING 23 OUNCES PER BAG, WAS ISSUED TO THE A. LEVY AND J. ZENTNER COMPANY, THE ONLY KNOWN VENDOR OF THE ITEMS DESCRIBED THEREIN. WE ARE ADVISED THAT AT THE TIME OF ISSUANCE OF THE NIP THE CONTRACTING OFFICER WAS AWARE, FROM PAST EXPERIENCE, THAT ITEM NO. 0134 WAS PACKAGED ONLY IN 20 OUNCE BAGS.

THE PRAY-INGALLS COMPANY, AUTHORIZED REPRESENTATIVES OF LEVY AND ZENTNER, RESPONDED TO THE NIP ON AUGUST 2, 1966, OFFERING TO FURNISH ITEM NO. 0134 AT A UNIT PRICE OF $0.2349, TOTALLING $197.32. THE REQUIREMENT FOR 23 OUNCE BAGS, HOWEVER, WAS UNCHANGED IN THE OFFER.

AWARD WAS MADE ON AUGUST 10, 1966 (ERRONEOUSLY DATED AUGUST 4), BY ISSUANCE OF THE SUBJECT PURCHASE ORDER. ON SEPTEMBER 22, 1966, DELIVERY OF ALL OF THE CONTRACT ITEMS WAS COMPLETED, INCLUDING 840 BAGS OF WEST PAC BRAND SHOESTRING POTATOES, WEIGHING 20 OUNCES PER BAG.

SHORTLY THEREAFTER THE CONTRACTOR RECEIVED PAYMENT FOR ALL OF THE ITEMS DELIVERED WITH THE EXCEPTION OF ITEM NO. 0134, WHICH, BECAUSE OF THE PROBLEM HERE INVOLVED, WAS WITHHELD PENDING OUR DECISION IN THE MATTER.

THE RECORD IN THIS INSTANCE SUPPORTS THE CONTRACTING OFFICER'S STATEMENT THAT HE KNEW, OR SHOULD HAVE KNOWN, THAT WEST PAC BRAND SHOESTRING POTATOES WERE PACKAGED ONLY IN 20 OUNCE BAGS. A REVIEW OF THREE SIMILAR PURCHASES MADE DURING THE SIX MONTH PERIOD IMMEDIATELY PRECEDING THE INSTANT PURCHASE REVEALS THAT THE CONTRACTS WERE ALL AWARDED ON THE BASIS OF 20 OUNCE BAGS. TWO OF THE PRIOR NIP'S REQUESTED 20 OUNCE BAGS FOR THIS ITEM AND ONE REQUESTED 23 OUNCE BAGS BUT, IN THAT INSTANCE THE CONTRACTOR NOTED THE MISTAKE, CORRECTED IT, AND CALLED ATTENTION TO THE FACT THAT HE WAS OFFERING 20 OUNCE BAGS.

ALSO, IN THIS REGARD, THE GROSS WEIGHT FOR ITEM NO. 0134 WAS STATED IN THE NIP TO BE 1,190 POUNDS WHEN IT WAS ISSUED TO LEVY AND ZENTNER. THE NET WEIGHT, SUBSEQUENTLY COMPUTED BY THE CONTRACTING OFFICER BECAUSE OF THE CONTRACTOR'S FAILURE TO DO SO, USING THE 23-OUNCE PER BAG FACTOR, WAS DETERMINED TO BE 1,208 POUNDS. THE FACT THAT THE NET WEIGHT WAS IN EXCESS OF THE GROSS WEIGHT SHOULD HAVE ALERTED THE CONTRACTING OFFICER TO THE POSSIBILITY OF ERROR IN THAT 840--- 23 OUNCE BAGS COULD NOT RESULT IN A GROSS WEIGHT OF 1,190 POUNDS, AS INDICATED IN THE OFFER AND INCORPORATED INTO THE CONTRACT. THEREFORE, EITHER THE FIGURE 23 OUNCES OR THE FIGURE 1,190 POUNDS WAS INCORRECT, AND SHOULD HAVE BEEN VERIFIED PRIOR TO ISSUANCE OF THE PURCHASE ORDER.

IN SUPPORT OF ITS STATEMENT THAT THE OFFER CONTAINED A MATERIAL MISTAKE, THE CONTRACTOR ALLEGED THAT A CLERICAL EMPLOYEE, IN PREPARING THE WRITTEN OFFER, HAD FAILED TO STRIKE OUT THE REQUIREMENT FOR 23 OUNCE BAGS, AS INSTRUCTED, AND SUBSTITUTE IN LIEU THEREOF 20 OUNCE BAGS. FURTHER, THE CONTRACTOR CITED THE PRIOR PURCHASE ORDERS, DESCRIBED ABOVE WHEREIN THE IDENTICAL ITEM HAD EITHER BEEN REQUESTED OR OFFERED ON A 20-OUNCE BASIS. THE CONTRACTOR ALSO SUBMITTED ITS PRICE LIST FURTHER SUBSTANTIATING WHAT THE CONTRACTING OFFICER HAS STATED IS COMMON KNOWLEDGE, I.E., THAT THE ITEM IS SOLD ONLY IN 20 OUNCE BAGS. THE CONTRACTOR'S WORKSHEET FOR THE SUBJECT PURCHASE INDICATES THAT IT INTENDED TO SUBMIT AN OFFER BASED ON 20 OUNCE BAGS.

WE ARE FURTHER ADVISED BY THE CONTRACTING OFFICER THAT THE REASONABLE VALUE OF THE ITEM IS $0.2349 PER 20 OUNCE BAG, BASED ON THE PRICE LIST IN EFFECT ON SEPTEMBER 22, 1966. THE CONTRACTING OFFICER RECOMMENDS IN THIS REGARD THAT ITEM NO. 0134 OF THE PURCHASE ORDER BE AMENDED TO STATE A REQUIREMENT FOR 20-OUNCE BAGS INSTEAD OF 23-OUNCE BAGS, SO AS TO BRING THE CONTRACT INTO HARMONY WITH THE INTENTIONS OF BOTH THE CONTRACTOR AND THE GOVERNMENT AS EXPRESSED HEREIN. NEITHER THE TOTAL ITEM AMOUNT NOR THE TOTAL CONTRACT PRICE WOULD BE AFFECTED THROUGH CORRECTION OF THE MISTAKE IN THE MANNER RECOMMENDED.

THE RULE OF LAW IS THAT, WHEN BY REASON OF MUTUAL MISTAKE A CONTRACT AS FINALLY REDUCED TO WRITING DOES NOT REFLECT THE ACTUAL INTENT OF THE PARTIES, THE WRITTEN INSTRUMENT MAY BE REFORMED IF IT CAN BE ESTABLISHED WHAT THE ACTUAL INTENT WAS. 30 COMP. GEN. 220, AND CASES CITED THEREIN. AT THE TIME THIS AWARD WAS MADE, NEITHER PARTY TO THE CONTRACT INTENDED THAT THE ITEM IN QUESTION WOULD BE FURNISHED TO THE GOVERNMENT IN BAGS WEIGHING 23 OUNCES EACH. DUE TO A MISTAKE BY THE GOVERNMENT IN NEGOTIATING THE CONTRACT AND PREPARING THE AWARD, AND TO AN OVERSIGHT BY THE CONTRACTOR IN EXECUTING THE CONTRACT, THE CONTRACT REFLECTED AN AGREEMENT WHICH NEITHER PARTY INTENDED. THE RECORD IS SUFFICIENT TO AUTHORIZE REFORMATION OF THE CONTRACT, BUT SINCE DELIVERY THEREUNDER HAS BEEN COMPLETED, REFORMATION DOES NOT NOW SEEM TO BE REQUIRED. ACCORDINGLY, THE PAYMENT OF $197.32--- THE AMOUNT WITHHELD PENDING THIS DECISION--- IS AUTHORIZED TO BE MADE TO THE CONTRACTOR IF PROPER IN OTHER RESPECTS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT TO THE CONTRACTOR.