B-164546, JUN. 27, 1968

B-164546, JUN. 27, 1968

TO MR. DRIVER:

REFERENCE IS MADE TO A LETTER DATED JUNE 11, 1968, WITH ENCLOSURES, FROM THE DIRECTOR, SUPPLY SERVICE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR ALLEGED BY GARELICK BROS. FARMS, INC., TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. V650 P-439 IS BASED.

THE VETERANS ADMINISTRATION HOSPITAL, DAVIS PARK, PROVIDENCE, RHODE ISLAND, BY SOLICITATION NO. 69-3 REQUESTED BIDS -- TO BE OPENED MAY 22, 1968 -- FOR FURNISHING ESTIMATED QUANTITIES OF DAIRY PRODUCTS IDENTIFIED BY ITEMS 1 THROUGH 11 AS REQUIRED BY THE HOSPITAL AND THE VETERANS CANTEEN SERVICE DURING THE PERIOD JULY 1, 1968, THROUGH JUNE 30, 1969. ITEM 9 WAS DESCRIBED AS AN ALTERNATE TO THE COMBINATION OF ITEMS 7 AND 8. PROSPECTIVE BIDDERS WERE ADVISED THAT BIDS ON ITEM 9 WOULD BE GIVEN EQUAL CONSIDERATION ALONG WITH THE COMBINATIONS OF ITEMS 7 AND 8 AND THAT AN AWARD WOULD BE MADE ON WHICHEVER OFFERS THE LEAST TOTAL COST. ALSO, BIDDERS WERE ADVISED THAT THE ENTIRE GROUP OF ITEMS WOULD BE AWARDED TO THE BIDDER QUOTING THE LOWEST PRICE FOR THE GROUP. GARELICK BROS. FARMS, INC., SUBMITTED A BID DATED MAY 21, 1968, IN PART, AS FOLLOWS:

"ALTERNATE ITEMS:

"7. VA ITEM 124, MILK, WHOLE, FRESH, PASTEURIZED, HOMOGENIZED, (TYPE I, NO. 1), COMPLYING WITH FED. SPEC. C-M-381G AND AMENDMENT 3, DELIVERED IN 1/2 PINT PLASTIC COATED OR WAXED PAPER CONTAINERS 21,130 GAL. .95 20,073.50

AND --

"8. VA ITEM 124, MILK, WHOLE, FRESH, PASTEURIZED, HOMOGENIZED, (TYPE I, NO. 1), COMPLYING WITH FED. SPEC. C-M-381G AND AMENDMENT 3, DELIVERED IN 6 -GALLON SINGLE SERVICE CONTAINERS 7,480 GAL. .846 6,328.08

OR --

"9. VA ITEM 124, MILK, WHOLE, FRESH, PASTEURIZED, HOMOGENIZED, (TYPE I, NO. 1), COMPLYING WITH FED. SPEC. C-M-381G AND AMENDMENT 3, DELIVERED IN 1/2 PINT PLASTIC COATED OR WAXED PAPER CONTAINERS 28,610 GAL. $ .846 24,204.06"

THE BID OF GARELICK BROS. FARMS, INC., WHICH WAS THE ONLY BID RECEIVED ON ITEMS 1 THROUGH 11, WAS ACCEPTED ON MAY 29, 1968, FOR AN AGGREGATE TOTAL OF $30,134.46 FOR ALL ITEMS EXCEPT ITEMS 7 AND 8.

BY LETTER DATED JUNE 3, 1968, GARELICK BROS. FARMS, INC., ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICE OF ITEM 9 SHOULD HAVE READ $0.95 PER GALLON INSTEAD OF $0.846 PER GALLON. THE CORPORATION REQUESTED THAT THE PRICE OF ITEM 9 BE CORRECTED TO READ $0.95 PER GALLON -- THE SAME PRICE AS THAT QUOTED FOR ITEM 7.

GARELICK BROS. FARMS, INC., BID A PRICE OF $0.846 PER GALLON FOR BOTH ITEMS 8 (6-GALLON CONTAINERS) AND 9 (1/2-PINT CONTAINERS). IT SEEMS EXTREMELY IMPROBABLE THAT THE CORPORATION INTENDED TO QUOTE AN IDENTICAL PRICE FOR THE MILK REQUIRED UNDER ITEMS 8 AND 9, SINCE THE MILK REQUIRED UNDER ITEM 9, WHICH IS TO BE FURNISHED IN 1/2-PINT CONTAINERS, APPEARS TO BE A MORE EXPENSIVE ITEM THAN THE MILK REQUIRED UNDER ITEM 8, WHICH IS TO BE FURNISHED IN 6-GALLON CONTAINERS. IN VIEW THEREOF AND THE FACT THAT THE INVITATION FOR BIDS CALLED FOR THE COMPARISON OF THE PRICES QUOTED FOR ITEMS 7 AND 8 WITH THE PRICE QUOTED FOR ITEM 9, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID OF $0.846 PER GALLON FOR ITEM 9 AND,CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE CORPORATION TO VERIFY ITS BID.

IT IS REPORTED THAT CORRECTION OF THE PRICE FOR ITEM 9 WOULD COST THE VETERANS ADMINISTRATION APPROXIMATELY $778 MORE THAN THE COMBINED COST OF THE ALTERNATE ITEMS 7 AND 8 WHICH, IT IS STATED, WOULD HAVE BEEN AWARDED TO THE CORPORATION BUT FOR THE MISTAKE ON ITEM 9. ACCORDINGLY, ITEM 9 OF CONTRACT NO. V650-P-439 MAY BE CANCELED AND IN LIEU THEREOF ALTERNATE ITEMS 7 AND 8 MAY BE SUBSTITUTED. HOWEVER, IF THE HOSPITAL IS OF THE OPNION THAT DELIVERY OF ALL THE MILK IN 1/2 PINT CONTAINERS (ITEM 9) IS PREFERABLE TO DELIVERY OF A PORTION OF THE MILK IN 6-GALLON CONTAINERS AND THE BALANCE IN 1/2-PINT CONTAINERS, WE WOULD HAVE NO OBJECTION IF IT IS DETERMINED TO AMEND CONTRACT NO. V650 P-439 TO PROVIDE FOR A PRICE OF $0.95 PER GALLON FOR ITEM 9, SINCE NO OTHER BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION FOR BIDS. IN THE EVENT SUCH ALTERNATIVES ARE ADMINISTRATIVELY UNACCEPTABLE FROM A COST BASIS, THE CONTRACT MAY BE CANCELED IN ITS ENTIRETY WITHOUT LIABILITY TO THE CONTRACTOR.

IF THE CONTRACT IS AMENDED TO CORRECT THE PRICE OF ITEM 9, A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT.