B-165964, JAN. 31, 1969

B-165964, JAN. 31, 1969

TO MR. DRIVER:

REFERENCE IS MADE TO A LETTER DATED JANUARY 13, 1969, FILE 134G, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, WITH REGARD TO A MISTAKE ALLEGED BY THE PACKARD INSTRUMENT SALES CORP., UNDER AN ADDENDUM TO CONTRACT NO. V578P-2316, AWARDED BY THE VETERANS ADMINISTRATION HOSPITAL, HINES, ILLINOIS.

THE SUBJECT CONTRACT, BEFORE ISSUANCE OF THE ADDENDUM, CALLED FOR COMPLETE MAINTENANCE SERVICES FOR A PACKARD MODEL 3311 TRI-CARB SPECTROMETER AND A PACKARD MODEL 7800 GAS CHROMATOGRAPH SYSTEM FOR FISCAL YEAR 1969. THE CONTRACT REQUIRES FOUR INSPECTIONS OF THE SPECTROMETER WITH RELATED SERVICES AT $147.50 PER INSPECTION LESS A 5 PERCENT QUANTITY DISCOUNT AND FOUR INSPECTIONS OF THE CHROMATOGRAPH SYSTEM WITH RELATED SERVICES AT $87.50 PER INSPECTION LESS THE 5 PERCENT QUANTITY DISCOUNT. THE TOTAL ANNUAL NET COST FOR BOTH INSTRUMENTS IS $893.

THE SUBJECT ADDENDUM REQUIRES SIMILAR MAINTENANCE SERVICES TO TWO PACKARD MODEL 3375 TRI-CARB SCINTILLATION SYSTEMS AND ON THE ADDENDUM FORM PACKARD LISTED A PRICE OF $171.88 LESS A 6-PERCENT DISCOUNT FOR EACH SYSTEM. THE ADDENDUM FORM, HOWEVER, WHILE REQUIRING FOUR INSPECTIONS ON EACH OF THE TWO COVERED SYSTEMS, LISTS ONLY TOTAL PRICES FOR EACH SYSTEM SO THAT THE PRICE PER INSPECTION IS NOT LISTED AS IT IS IN THE BASIC CONTRACT.

THE ALLEGED MISTAKE CAME TO LIGHT AFTER PACKARD HAD BILLED AND WAS PAID BY THE GOVERNMENT FOR THE FIRST OF THE FOUR REQUIRED INSPECTIONS ON THE MODELS COVERED BY THE ADDENDUM AT $176.25 EACH RATHER THAN AT $40.39 EACH, ONE FOURTH OF THE STATED ADDENDUM PRICE, LESS DISCOUNT. UPON RECEIPT OF A BILL FOR COLLECTION ISSUED BY THE HOSPITAL FOR THE OVERPAYMENT, PACKARD ADVISED THE CONTRACTING OFFICER THAT IT HAD INTERPRETED THE ADDENDUM AS REQUESTING PRICES ON A QUARTERLY BASIS AS HAD THE BASIC CONTRACT, AND THAT ITS PRICE OF $171.88 EACH, LESS DISCOUNT, WAS ACCORDINGLY INTENDED AS A QUARTERLY PRICE, BASED ON ITS CUSTOMARY ANNUAL MAINTENANCE CHARGE FOR THE SUBJECT SYSTEM OF $750 LESS DISCOUNT. ADDITIONALLY, PACKARD ADVISED THAT A MATHEMATICAL ERROR HAD BEEN MADE WITH REGARD TO THE APPLICATION OF THE DISCOUNT TO THE QUARTERLY PORTION OF ITS CUSTOMARY ANNUAL CHARGE WITH THE RESULT THAT THE ACTUAL QUARTERLY PRICE PER UNIT SHOULD HAVE BEEN $176.25, INCLUDING DISCOUNT, RATHER THAN THE STATED PRICE OF $171.88.

THE CONTRACTING OFFICER ADVISES THAT THE REQUEST FOR THE SERVICES COVERED BY THE ADDENDUM SUBMITTED TO HIM BY THE HOSPITAL MEDICAL STAFF STATED AN ESTIMATED ANNUAL COST OF $705 ($750 LESS 6-PERCENT DISCOUNT) AND ACKNOWLEDGES THAT THE LOWER PRICE ACTUALLY LISTED IN THE ADDENDUM SHOULD HAVE BEEN "CHECKED OUT MORE THOROUGHLY.' ALSO, IT IS POINTED OUT THAT A PACKARD PRICE CHART AND PACKARD MAINTENANCE PROPOSALS SUBMITTED TO THE MEDICAL STAFF CONCERNING THE ADDENDUM SERVICES BOTH SUBSTANTIATE THE INTENDED ANNUAL NET PRICE OF $705.

WE ARE OF THE OPINION THAT THE ABOVE-RELATED FACTS SHOW THAT A BONA FIDE MISTAKE WAS MADE, AS ALLEGED, AND THAT THE CONTRACTING OFFICER WAS OR SHOULD HAVE BEEN, AWARE OF THE MISTAKE. MOREOVER, THE AMOUNT OF THE INTENDED BID HAS BEEN CLEARLY ESTABLISHED. ACCORDINGLY, WE AGREE WITH THE DIRECTOR, SUPPLY SERVICE, THAT THE CONTRACT ADDENDUM SHOULD BE CORRECTED TO SHOW THE INTENDED TOTAL PRICE OF $750 LESS THE 6-PERCENT QUANTITY DISCOUNT FOR SERVICES TO EACH OF THE TWO LISTED SYSTEMS.