B-162221, OCT. 16, 1967

B-162221: Oct 16, 1967

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BECAUSE PRICE WAS FAR OUT OF LINE WITH OTHER BIDS AND VALUE OF SCRAP AND BECAUSE UNIT PRICE AND EXTENDED PRICE DID NOT AGREE. WAS PERMITTED TO HAVE BID CORRECTED ON BASIS OF EVIDENCE OF ERROR AND OF INTENDED PRICE MAY HAVE CORRECTION ACTION UPHELD. THIS PROVISION IS FOR APPLICATION ONLY WHERE UNIT PRICE ACTUALLY REPRESENTS INTENDED PRICE. SINCE CORRECTION ACTION DOES NOT AFFECT STANDING OF OTHER BIDDERS PROTEST AGAINST AWARD IS DENIED. INC.: REFERENCE IS MADE TO YOUR LETTER DATED JULY 13. BIDS WERE TO BE SUBMITTED IN A STATED AMOUNT. THE BIDS WERE OPENED AT 10 A.M. LURIA STATED ITS BID WAS $9.25 PER TON ABOVE THE IRON AGE PRICE. YOU CONTEND THAT THE INSTRUCTIONS ARE CLEAR AND ARE DESIGNED TO PREVENT THE VERY ERROR THAT LURIA ALLEGES.

B-162221, OCT. 16, 1967

BIDS - MISTAKES - CORRECTION DECISION TO INTERNATIONAL ALLOYS, INC., RE PROTEST AGAINST AWARD OF SALES CONTRACT TO LURIA BROTHERS FOR IRON AND STEEL SCRAP BECAUSE OF CORRECTED BID. HIGH BIDDER WHO, BECAUSE PRICE WAS FAR OUT OF LINE WITH OTHER BIDS AND VALUE OF SCRAP AND BECAUSE UNIT PRICE AND EXTENDED PRICE DID NOT AGREE, WAS PERMITTED TO HAVE BID CORRECTED ON BASIS OF EVIDENCE OF ERROR AND OF INTENDED PRICE MAY HAVE CORRECTION ACTION UPHELD. ALTHOUGH INVITATION PROVIDED THAT UNIT PRICE RATHER THAN EXTENDED PRICE WOULD CONTROL, THIS PROVISION IS FOR APPLICATION ONLY WHERE UNIT PRICE ACTUALLY REPRESENTS INTENDED PRICE. SINCE CORRECTION ACTION DOES NOT AFFECT STANDING OF OTHER BIDDERS PROTEST AGAINST AWARD IS DENIED.

TO INTERNATIONAL ALLOYS, INC.:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 13, 1967, WITH ENCLOSURES, PROTESTING AGAINST THE AWARD OF A SALES CONTRACT UNDER INVITATION FOR BIDS NO. 18-7095 TO LURIA BROTHERS AND COMPANY, INC.

INVITATION FOR BIDS NO. 18-7095, ISSUED ON MAY 31, 1967, SOLICITED BIDS UNDER ITEM 32 FOR THE SALE OF AN ESTIMATED 2,000 GROSS TONS OF NICKEL BEARING IRON AND STEEL TURNINGS TO BE GENERATED DURING THE PERIOD OF JULY 1, 1967, THROUGH DECEMBER 31, 1967. ITEM 32 ON PAGE 25 OF THE SALES INVITATION REQUIRED THAT BIDS BE SUBMITTED ON THE BASIS OF THE "IRON AGE" QUOTATION FOR MIXED BORINGS AND TURNINGS IN THE BUFFALO, NEW YORK AREA, PUBLISHED DURING THE WEEK OF SHIPMENT. BIDS WERE TO BE SUBMITTED IN A STATED AMOUNT, PLUS OR MINUS THE HIGHEST APPLICABLE QUOTATION PRICE SET OUT IN THAT PUBLICATION.

THE BIDS WERE OPENED AT 10 A.M. ON JUNE 20, 1967. THREE BIDDERS SUBMITTED BIDS ON ITEM 32 AS FOLLOWS:

UNIT (PER TON) EXTENDED (TOTAL

PLUS IRON AGE 2,000 TONS)

QUOTATION

LURIA BROTHERS $20.25 $40,500

INTERNATIONAL ALLOYS, INC. 1.19 24,380

MIDWEST STEEL AND ALLOYS CORP. .50 23,000

BY TELEGRAM OF JUNE 20, 1967, YOU UNSUCCESSFULLY ATTEMPTED TO RAISE YOUR BID TO $2.58 PER GROSS TON.

ON JUNE 20, 1967, YOU ADVISED THAT LURIA'S BID MUST BE IN ERROR AND SHOULD BE DISQUALIFIED, AND THAT ITEM 32 SHOULD BE AWARDED TO YOUR COMPANY. IN THE MEANTIME, THE SALES CONTRACTING OFFICER HAD NOTICED AN ERROR AND HAD TRIED TO REACH LURIA ON JUNE 21. ON JUNE 22, THE SALES CONTRACTING OFFICER FINALLY CONTACTED LURIA. LURIA STATED ITS BID WAS $9.25 PER TON ABOVE THE IRON AGE PRICE. ON JUNE 23, LURIA SENT A LETTER CONFIRMING ITS BID OF $9.25 AND A SUPPORTING WORKSHEET. LURIA POINTED OUT THAT ITS $40,500 EXTENDED TOTAL PRICE SUPPORTED A BID OF $9.25 PER GROSS TON (PLUS THE IRON AGE $11 PER GROSS TON EXAMPLE SHOWN ON PAGE 9 OF THE INVITATION) FOR A TOTAL BID OF $20.25 PER GROSS TON. THE SALES CONTRACTING OFFICER ACCEPTED THE EVIDENCE SUBMITTED BY LURIA OF ITS OBVIOUS ERROR AND DETERMINED TO CORRECT THE UNIT BID PRICE TO $9.25 PER TON PLUS THE APPLICABLE IRON AGE GROSS TON PRICE.

ITEM 32 ON PAGE 25 OF THE SALES INVITATION TITLED, IRON AND STEEL TURNINGS AND BORINGS, SCRAP: ALTERNATIVE BID NO. 1 READS: "PLUS (PLUS) $-- --- PER GROSS TON MORE THAN THE HIGHEST PRICE PER GROSS TON FOR MIXED BORINGS AND TURNINGS AS DESCRIBED ABOVE, BUFFALO, N.Y. AREA, AS QUOTED IN -IRON AGE,- WEEK OF SHIPMENT.'

YOU CONTEND THAT THE INSTRUCTIONS ARE CLEAR AND ARE DESIGNED TO PREVENT THE VERY ERROR THAT LURIA ALLEGES, AND THAT BECAUSE LURIA MADE JUST SUCH AN ERROR, ITS BID SHOULD BE DISREGARDED. SECOND, YOU ALLEGE THAT LURIA'S TOTAL BID PRICE SHOULD HAVE BEEN $62,500. YOU REFER TO THE LAST SENTENCE OF PARAGRAPH 3 OF THE GENERAL SALES TERMS AND CONDITIONS WHICH PROVIDE THAT: "IN CASE OF ERROR IN THE EXTENSION OF PRICES, UNIT PRICES WILL GOVERN.' THUS, YOU CONTEND THAT THE ACTION BY THE CONTRACTING OFFICER IN ALLOWING LURIA TO CHANGE ITS UNIT BID PRICE FROM $20.25 PER GROSS TON TO $9.25 PER GROSS TON IS CONTRARY TO THIS PARAGRAPH. YOU THEREFORE BELIEVE THAT LURIA'S UNIT PRICE WAS $31.25 AND ITS TOTAL BID PRICE SHOULD READ $62,500.

THE RECORD SHOWS THAT THE SALES CONTRACTING OFFICER IMMEDIATELY RECOGNIZED THAT LURIA'S BID WAS FAR OUT OF LINE WITH THE OTHER BIDS; FIRST, BECAUSE THE UNIT PRICE AND EXTENDED PRICE DID NOT TALLY AND,SECOND, BECAUSE LURIA'S BID OF $20.25 (PLUS THE $11 IRON AGE QUOTATION PER GROSS TON, OR $31.25) WAS EXCESSIVE IN RELATION TO THE VALUE OF THE SCRAP. YOUR COMPANY HAD THE LAST TWO CONTRACTS FOR THE SAME ITEM. THE PRESENT CONTRACT FOR THE IDENTICAL ITEM EXPIRING JUNE 30, 1966, WAS FOR $6.69 PER GROSS TON (PLUS THE IRON AGE QUOTATION) OR $17.69. THE PREVIOUS CONTRACT, AWARDED JUNE 23, 1966, WAS FOR $13.54 PER GROSS TON (PLUS THE IRON AGE QUOTATION) OR $24.54 PER GROSS TON. LURIA'S BID OF $20.25 AS COMPARED WITH THE OTHER BIDS OF $1.19 AND ?50 WAS CLEARLY ERRONEOUS.

WE BELIEVE THAT BOTH THE ERROR AND THE AMOUNT OF THE INTENDED BID WERE READILY EVIDENCED FROM THE BID ITSELF. FURTHERMORE, THE ERROR INVOLVED IS OBVIOUSLY CLERICAL IN NATURE WHICH MAY BE CORRECTED BY THE CONTRACTING OFFICER PRIOR TO AWARD AFTER VERIFICATION OF THE BID ACTUALLY INTENDED. CF. 36 COMP. GEN. 429. ALTHOUGH THE INVITATION PROVIDES THAT IN CASE OF AN ERROR IN THE EXTENDED PRICE, THE UNIT PRICE WILL GOVERN, THIS PROVISION APPLIES ONLY WHERE THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. SEE 37 COMP. GEN. 829.

ACCORDINGLY, AND SINCE WE SEE NO VALID BASIS TO QUESTION THE ADMINISTRATIVE CORRECTION OF THE LURIA BID WHICH, AFTER CORRECTION, WILL NOT AFFECT THE RELATIVE STANDING OF THE OTHER BIDDERS, YOUR PROTEST IS DENIED. SEE 35 COMP. GEN. 363, COPY ENCLOSED.