B-167718, SEP. 22, 1969

B-167718: Sep 22, 1969

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WHERE LOW BID FOR ITEM WAS $201.40 AND OTHER BIDS RANGED FROM $335.92 AND $400 FOR SAME ITEM AND GOVERNMENT HAD PREVIOUSLY PURCHASED ITEM FOR $305.58. THE ERROR WAS SO APPARENT AS TO HAVE CHARGED CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF PROBABLE ERROR AND REQUESTED VERIFICATION BEFORE AWARD. THEREFORE SINCE ERROR AND INTENDED PRICE ARE ESTABLISHED BID MAY BE CORRECTED. PAINE: REFERENCE IS MADE TO LETTER KDA-2 OF AUGUST 13. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. NAS10 -6585 IS BASED. ITEM 6 WAS A REQUIREMENT FOR EIGHT STEEL PLATES. THE BID OF JENKS AS TO ITEM 6 WAS ACCEPTED ON APRIL 16. A WEIGHT OF 257 POUNDS PER PLATE WAS USED IN ITS ESTIMATE. WHEREAS AN ACTUAL WEIGHT OF 425 POUNDS PER PLATE SHOULD HAVE BEEN USED.

B-167718, SEP. 22, 1969

CONTRACTS - MISTAKES DECISION TO ADMINISTRATOR OF NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AUTHORIZING CORRECTION OF CONTRACT WITH JENKS METALS, INC., FOR FURNISHING STEEL PLATE BECAUSE OF ERROR IN BID. WHERE LOW BID FOR ITEM WAS $201.40 AND OTHER BIDS RANGED FROM $335.92 AND $400 FOR SAME ITEM AND GOVERNMENT HAD PREVIOUSLY PURCHASED ITEM FOR $305.58, THE ERROR WAS SO APPARENT AS TO HAVE CHARGED CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF PROBABLE ERROR AND REQUESTED VERIFICATION BEFORE AWARD. THEREFORE SINCE ERROR AND INTENDED PRICE ARE ESTABLISHED BID MAY BE CORRECTED.

TO DR. PAINE:

REFERENCE IS MADE TO LETTER KDA-2 OF AUGUST 13, 1969, WITH ENCLOSURES, FROM THE DIRECTOR OF PROCUREMENT, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY JENKS METALS, INC. (JENKS), OF ORLANDO, FLORIDA, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. NAS10 -6585 IS BASED.

THE PROCUREMENT OFFICE, JOHN F. KENNEDY SPACE CENTER, FLORIDA, BY INVITATION NO. CC-211-9 REQUESTED BIDS FOR FURNISHING SIX ITEMS OF STEEL PLATE OR SHEET OF VARIOUS TYPES AND SIZES. ITEM 6 WAS A REQUIREMENT FOR EIGHT STEEL PLATES, TYPE 316, ANNEALED, NUMBER 1 FINISH, 1/4 INCH THICK, 48 INCHES WIDE, 120 INCHES LONG. IN RESPONSE JENKS SUBMITTED A BID DATED MARCH 24, 1969, OFFERING TO FURNISH, AMONG OTHER ITEMS, ITEM 6 AT A UNIT PRICE OF $201.40. THE BID OF JENKS AS TO ITEM 6 WAS ACCEPTED ON APRIL 16, 1969.

BY LETTER DATED APRIL 25, 1969, JENKS ADVISED THE CONTRACTING OFFICER THAT IN COMPUTING ITS BID PRICE FOR ITEM 6, ITS ESTIMATOR ERRONEOUSLY ESTIMATED THE TOTAL WEIGHT OF THE STEEL PLATES AS BEING 2,059 POUNDS RATHER THAN 3,300 TO 3,400 POUNDS. THE CORPORATION REQUESTED THAT THE CONTRACT BE CANCELED WITHOUT LIABILITY TO THE FIRM, OR IN THE ALTERNATIVE, IT BE PERMITTED TO CORRECT ITS BID PRICE FOR ITEM 6. IN A LETTER DATED MAY 5, 1969, THE CORPORATION STATED THAT IN COMPUTING ITS BID PRICE FOR ITEM 6, A WEIGHT OF 257 POUNDS PER PLATE WAS USED IN ITS ESTIMATE, WHEREAS AN ACTUAL WEIGHT OF 425 POUNDS PER PLATE SHOULD HAVE BEEN USED, BASED ON ITS STANDARD WEIGHT SCALE OF 10.65 POUNDS PER SQUARE FOOT FOR 1/4-INCH PLATE. IN THIS CONNECTION, RECORD OF A TELEPHONE CONVERSATION DATED MAY 7, 1969, WITH A REPRESENTATIVE OF JENKS, INDICATES THAT IN COMPUTING THE CORPORATION'S BID PRICE FOR ITEM 6, ITS ESTIMATOR OBTAINED THE WEIGHT OF THE STEEL PLATE FROM MEMORY RATHER THAN FROM A WEIGHT CHART. THE CORPORATION ALLEGES THAT THE CORRECT PRICE FOR ITEM 6 IS $332.56 PER PLATE (COMPUTED ON THE BASIS OF 425 POUNDS PER PLATE AT $0.7825 PER POUND) OR A TOTAL PRICE OF $2,660.48 FOR THE EIGHT PLATES. THE CORPORATION'S ORIGINAL TOTAL BID PRICE FOR THE EIGHT PLATES COVERED BY ITEM 6 WAS $1,611.20. SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS WORKSHEETS WHICH INDICATE A TOTAL WEIGHT OF 2,059 POUNDS FOR ITEM 6 AND A PER POUND PRICE OF $0.7825. THE CORPORATION ALSO SUBMITTED A COPY OF PAGE 6 OF ITS CATALOG WHICH SHOWS AN ESTIMATED WEIGHT OF 426 POUNDS FOR THE SIZE OF STEEL PLATE REQUIRED UNDER ITEM 6 OF THE INVITATION FOR BIDS.

THE RECORD INDICATES THAT THE FOUR OTHER BIDDERS ON ITEM 6 QUOTED PRICES RANGING FROM $335.92 TO $400 PER PLATE AND THAT THE GOVERNMENT ESTIMATE WAS $320.90 PER PLATE. IT IS REPORTED THAT THE STEEL PLATES REQUIRED UNDER ITEM 6 WERE PREVIOUSLY PURCHASED AT A UNIT PRICE OF $305.58 PER PLATE. IN HIS STATEMENT, IN WHICH HE RECOMMENDED THAT THE CONTRACT UNIT PRICE OF ITEM 6 BE INCREASED FROM $201.40 TO $332.56 PER PLATE, THE CONTRACTING OFFICER STATES THAT THE DISPARITY BETWEEN THE PRICE QUOTED BY JENKS AND THE PRICES QUOTED BY THE OTHER BIDDERS, THE GOVERNMENT ESTIMATE AND THE PRICES PREVIOUSLY PAID FOR THE STEEL PLATES WAS SO APPARENT AS TO HAVE CHARGED HIM WITH CONSTRUCTIVE NOTICE OF A PROBABLE MISTAKE IN THE CORPORATION'S BID. WE ALSO ARE OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION THEREOF.

IT IS REPORTED THAT AFTER THE CORPORATION ALLEGED AN ERROR IN ITS BID, IT WAS INSTRUCTED TO DELIVER THE STEEL BY JUNE 20, 1969. ACCORDINGLY, SINCE JENKS HAS ESTABLISHED ITS INTENDED BID PRICE, CONTRACT NO. NAS10-6585 MAY BE AMENDED TO PROVIDE FOR A UNIT PRICE OF $332.56 FOR THE STEEL PLATES COVERED BY ITEM 6 AND PAYMENT FOR THE STEEL PLATES IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID, AS CORRECTED, WILL STILL BE THE LOWEST BID RECEIVED ON THAT ITEM.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE AMENDMENT TO BE ATTACHED TO THE CONTRACT.