B-162535, OCT. 13, 1967

B-162535: Oct 13, 1967

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PRICE IS REASONABLE AND ADDITIONAL AMOUNT WOULD NOT RESULT IN TOTAL COST IN EXCESS OF LOW BID. TO GENERAL HEDLUND: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 19. FOUR BIDS WERE RECEIVED AND ABSTRACTED AS FOLLOWS: BIDDER MELDON STEEL LEIFER BROS. 560.00 THE CONTRACT WAS AWARDED TO MELDON ON THE BASIS THAT IT WAS THE LOW. AN ERROR WAS DISCOVERED ON THE PART OF THE CLERK WHO ABSTRACTED THE BIDS RECEIVED. ON WHICH THE UNIT AND EXTENDED PRICES WERE THE SAME. CAUSING THE ABSTRACT TO REFLECT TOTAL PRICES FOR ITEM 7 ONLY 1/6 OF WHAT THEY SHOULD HAVE BEEN. SPECIFICALLY THE BREAKDOWN IS AS FOLLOWS: INCORRECT ENTRY CORRECT ENTRY (UNIT PRICES) OF (EXTENDED TOTALS) OF ITEM 7 BIDS ITEM 7 BIDS MELDON $198.00 $1.

B-162535, OCT. 13, 1967

CONTRACTS - MISTAKES - RELIEF DECISION TO DIRECTOR, DEFENSE SUPPLY AGENCY CONCERNING PAYMENT TO CONTRACTOR FURNISHING STEEL PLATES AND BARS AS RESULT OF ADMINISTRATIVE ERROR. WHERE CLERK WHO ABSTRACTED BIDS MADE ERROR IN TOTALING PRICES OF TWO LOWEST BIDS WHICH RESULTED IN AWARD TO OTHER THAN LOWEST BIDDER CONTRACTOR MAY BE PAID ADDITIONAL AMOUNT CLAIMED SINCE DELIVERY HAS BEEN MADE, PRICE IS REASONABLE AND ADDITIONAL AMOUNT WOULD NOT RESULT IN TOTAL COST IN EXCESS OF LOW BID.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 19, 1967, WITH ENCLOSURES, FROM THE OFFICE OF THE DEPUTY COMPTROLLER (REFERENCE DSAH CFF), REQUESTING A DECISION AS TO THE PROPRIETY OF PAYMENT OF THE SUM OF $500 CLAIMED BY MELDON STEEL CO., INC. (MELDON), AS A RESULT OF AN ADMINISTRATIVE ERROR BY AN ACTIVITY OF YOUR AGENCY.

BY SOLICITATION DATED APRIL 5, 1965, THE DEFENSE INDUSTRIAL SUPPLY CENTER, PHILADELPHIA, PENNSYLVANIA, SOLICITED BIDS FOR SIX ITEMS, OF ONE UNIT EACH, OF HOT ROLLED CARBON STEEL PLATES AND ONE ITEM, OF SIX UNITS, OF HOT ROLLED ALLOY STEEL BARS. FOUR BIDS WERE RECEIVED AND ABSTRACTED AS FOLLOWS: BIDDER MELDON STEEL LEIFER BROS. EARLE M. JORGENSEN BOWSTEEL ITEM NO.

1 $ 398.16 PM $ 410.00 PM $ 900.00 PM ****

2 462.15 478.00 1,060.00 ****

3 530.88 546.00 1,200.00 ****

4 663.60 683.00 1,500.00 ****

5 628.00 820.00 1,400.00 ****

6 1,256.00 1,640.00 1,450.00 ****

7 198.00 10.00 50.00 $ 0.3830/LB.

$4,136.79 $4,587.00 $7,560.00 THE CONTRACT WAS AWARDED TO MELDON ON THE BASIS THAT IT WAS THE LOW, RESPONSIVE, RESPONSIBLE BIDDER. HOWEVER, SUBSEQUENT TO AWARD, BY LETTER OF MARCH 25, 1966, MELDON REQUESTED THAT THE CONTRACT BE MODIFIED TO CORRECT AN "OBVIOUS ERROR" ON THE PART OF THE GOVERNMENT, IN SPECIFYING THE PRICE FOR ITEM 7. THE LETTER POINTED OUT THAT MELDON'S BID HAD STATED A UNIT PRICE OF $198 FOR EACH OF THE SIX BARS INCLUDED IN ITEM 7 AND AN EXTENDED PRICE OF $1,188, WHEREAS THE AWARD STATED BOTH THE UNIT AND TOTAL PRICE AS $198. ACCORDING TO THE LETTER, FINAL SHIPMENT HAD BEEN MADE ON DECEMBER 14, 1965, AND FINAL PAYMENT OF $4,136.79 HAD BEEN RECEIVED, BUT $990 HAD BEEN DEDUCTED FROM ITS INVOICE. UPON EXAMINATION OF THE PROCUREMENT FILE, AN ERROR WAS DISCOVERED ON THE PART OF THE CLERK WHO ABSTRACTED THE BIDS RECEIVED. IN TRANSCRIBING THE PRICES FROM THE BIDS TO THE ABSTRACT, THE CLERK ENTERED THE CORRECT PRICES FOR THE FIRST SIX ITEMS, ON WHICH THE UNIT AND EXTENDED PRICES WERE THE SAME, BUT FOR ITEM 7 HE ENTERED ONLY THE UNIT PRICES, CAUSING THE ABSTRACT TO REFLECT TOTAL PRICES FOR ITEM 7 ONLY 1/6 OF WHAT THEY SHOULD HAVE BEEN. SPECIFICALLY THE BREAKDOWN IS AS FOLLOWS:

INCORRECT ENTRY CORRECT ENTRY

(UNIT PRICES) OF (EXTENDED TOTALS) OF

ITEM 7 BIDS ITEM 7 BIDS

MELDON $198.00 $1,188.00

L5IFER BROS. 10.00 60.00

E. M. JORGENSEN 50.00 300.00

BOWSTEEL138.30 NONRESPONSIVE 745.56 NONRESPONSIVE FURTHER, THE BREAKDOWN OF THE "LOT" TOTALS IS AS FOLLOWS:

CONCERN LOT TOTAL BASED ON LOT TOTAL BASED ON

INCORRECT CORRECT ABSTRACTION

ABSTRACTION OF OF ITEM 7

ITEM 7

MELDON $4,136.79 $5,126.79

LEIFER BROS. 4,578.00 4,637.00

E. M. JORGENSEN 7,560.00 7,810.00

BOWSTEEL NONRESPONSIVE NONRESPONSIVE

AS THE RESULT OF THIS ERROR, THE AGGREGATE BID PRICES OF MELDON AND LEIFER WERE ENTERED IN THE ABSTRACT AS $4,136.79 AND $4,578.00,RESPECTIVELY, WHEREAS THE ACTUAL AMOUNTS WERE $5,126.79 AND $4,637.

FROM THE FOREGOING IT IS CLEAR THAT LEIFER BROS. STEEL CO. (LEIFER), WAS THE LOWEST RESPONSIVE AND RESPONSIBLE BIDDER AND THE CONTRACT WAS ERRONEOUSLY AWARDED TO MELDON. IN A SIMILAR SITUATION CONSIDERED IN 37 COMP. GEN. 330, 331, WE STATED:

"IT IS PROVIDED AT 10 U.S.C. 2305 (B) (SUBSECTION (B) ADDED BY PUBLIC LAW 85-861, SEC. 1 (44) (B). FORMER SUBSECTION (B) REDESIGNATED (C) ( THAT - AWARDS SHALL BE MADE * * * TO THE RESPONSIBLE BIDDER WHOSE BID CONFORMS TO THE INVITATION AND WILL BE MOST ADVANTAGEOUS TO THE UNITED STATES, PRICE AND OTHER FACTORS CONSIDERED.- WE HAVE HELD THAT THE QUOTED PROVISION REQUIRES THAT AWARD, IF ANY, BE MADE TO THE LOW BIDDER WITH CERTAIN EXCEPTIONS NOT APPLICABLE HERE. 28 COMP. GEN. 662, 664. AWARD OF A CONTRACT BY A GOVERNMENT AGENCY CONTRARY TO THE PROVISIONS OF STATUTE IS A NULLITY AND CONFERS NO RIGHTS ON THE CONTRACTOR AGAINST THE UNITED STATES. UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP CO., 239 U.S. 88, 92; CLARK V. UNITED STATES, 95 U.S. 539; G. G. LOEHLER V. UNITED STATES, 90 C. CLS. 158; 36 COMP. GEN. 94; 34 COMP. GEN. 115; B-120632, SEPTEMBER 10, 1954; B-29602 OCTOBER 23, 1942.' SEE ALSO, TO THE SAME EFFECT, B-149466, JULY 27, 1962, AND 38 COMP. GEN. 368. SINCE, AS PROPERLY EVALUATED, MELDON'S BID WAS NOT LOW, AS REQUIRED BY 10 U.S.C. 2305 (C), THE CONTRACT AWARDED TO IT WAS INVALID. HOWEVER, WHILE THE GOVERNMENT IS NOT ORDINARILY BOUND BY AN INVALID CONTRACT, WHERE GOODS OR SERVICES ARE FURNISHED ON THE REQUEST OR ORDER OF AN OFFICER AUTHORIZED TO CONTRACT ON BEHALF OF THE UNITED STATES, BUT THE CONTRACT IS VOID, THERE IS RECOGNIZED AN OBLIGATION TO PAY THE VALUE OF SUCH GOODS AND SERVICES ACTUALLY FURNISHED ON AND QUANTUM MERUIT BASIS. 37 COMP. GEN. 330, 332; 38 COMP. GEN. 368; B 149466, JULY 27, 1962. SEE ALSO 40 COMP. GEN. 447, 451. B-137707, DECEMBER 11, 1958.

THEREFORE, IN VIEW OF THE FACT THAT DELIVERY HAS ALREADY BEEN MADE AND YOUR AGENCY CONSIDERS THE CLAIMED PRICE TO BE REASONABLE, AND PAYMENT OF THE ADDITIONAL AMOUNT OF $500 TO MELDON WOULD NOT RESULT IN A TOTAL COST IN EXCESS OF THE LOW BID PRICE OF LEIFER, WE APPROVE THE ADMINISTRATIVE RECOMMENDATION THAT MELDON'S CLAIM IN THAT AMOUNT BE ALLOWED AND PAID, IF OTHERWISE CORRECT. THE FILE SUBMITTED WITH THE DEPUTY COMPTROLLER'S LETTER OF SEPTEMBER 19, 1967, IS RETURNED.