B-168016, OCT. 30, 1969

B-168016, OCT. 30, 1969

MISTAKES--ALLEGATION AFTER AWARD--CONTRACTING OFFICER'S ERROR DETECTION DUTY--NOTICE OF ERROR CONTRACTOR, WHO ALLEGED ERROR IN BID AFTER AWARD, CONFIRMED BY WORKSHEET SUBMITTED, HAVING TRANSPOSED UNIT PRICES PER CASE ON CHICKEN AND BEEF BOUILLON WHICH RESULTED IN UNIT PRICES FOR BEEF BOUILLON BEING LOWER THAN THOSE FOR CHICKEN WHEREAS EVIDENCE SUBMITTED BY CONTRACTING OFFICER CLEARLY SHOWED COST OF BEEF BOUILLON IN PREVIOUS SOLICITATIONS WERE HIGHER AS WERE ALL OTHER BIDS SUBMITTED, MAY HAVE CONTRACT CANCELED WITHOUT LIABILITY SINCE MISTAKE WAS SO APPARENT CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF POSSIBLE ERROR AND REQUESTED VERIFICATION OF PRICE QUOTED BEFORE AWARD.

TO MR. JOHNSON:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 29, 1969, WITH ENCLOSURES, FILE REFERENCE NO. 134G, FROM THE DIRECTOR, SUPPLY SERVICE, DEPARTMENT OF MEDICINE AND SURGERY, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING A MISTAKE IN BID ALLEGED BY THE FINER FOODS SALES COMPANY, INC., AFTER AWARD OF A CONTRACT. THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE AWARD ON ITEM 13 BE CANCELED WITHOUT LIABILITY TO THE CONTRACTOR.

INVITATION FOR BIDS (IFB) NO. M4-193-69, WAS ISSUED ON MARCH 24, 1969, BY THE VETERANS ADMINISTRATION, MARKETING DIVISION, SUBSISTENCE, FOR VARIOUS TYPES OF BOUILLONS, SCHEDULED FOR DELIVERY TO THREE VA SUPPLY DEPOTS. EIGHT FIRMS RESPONDED TO THE INVITATION WHICH WAS OPENED ON APRIL 9, 1969. FINER FOODS SALES WAS AWARDED THE CONTRACT FOR 132 CASES OF ITEM 7, VEGETABLE PROTEIN BOUILLON AT $5.40 PER CASE; AND 776 CASES OF ITEM 13, BEEF EXTRACT BOUILLON AT $6.20 PER CASE. THE BOUILLON, WHICH WAS REQUIRED TO COMPLY WITH FEDERAL SPECIFICATIONS EE-B 575A, WAS TO BE FURNISHED IN CASES OF TWELVE 1-POUND CANS OR JARS. BIDS ON ITEM 13 WERE IN THE AMOUNTS OF $6.20, $6.90, $6.95, $7.44, $8.33, $9.21 AND $10.

THE CONTRACTING OFFICER SENT FINER FOODS SALES A TELEGRAM DATED APRIL 18, 1969, WHICH READS AS FOLLOWS: "RE/M4-193-69 YOUR FIRM AWARDED ITEMS 7 AND 13 THIS OFFICIAL NOTICE TO PROCEED IN ACCORDANCE WITH TERMS AND CONDITIONS OF SOLICITATION ON ITEMS AWARDED PO 69-MC 40811 WILL FOLLOW (134M"

IN A TELEPHONE CONVERSATION ON APRIL 23 AND IN A LETTER OF APRIL 24, 1969, WHICH INCLUDED A WORKSHEET DATED APRIL 5, THE PRESIDENT OF FINER FOODS SALES ALLEGED A MISTAKE IN BID ON ITEM 13. THE LETTER OF APRIL 24, 1969, STATED IN PERTINENT PART AS FOLLOWS:

"THIS ERROR OCCURRED IN TRANSPOSING THE UNIT PRICE PER CASE FROM THE WORKSHEET TO THE ORIGINAL BID. BELOW IS GIVEN CORRECTED DATA:

"BOUILLON, CHICKEN FLAVORED PRICE QUOTED CORRECT PRICE

9. BELL, CALIF. 8.00 6.90

10. HINES, ILL. 7.15 6.20

11. SOMERVILLE, N.J. 7.30 6.20

"BOUILLON, BEEF EXTRACT PRICE QUOTED CORRECT PRICE

12. BELL, CALIF. 6.90 8.00

13. HINES, ILL. 6.20 7.15

14. SOMERVILLE, N.J. 6.20 7.30 "ATTACHED YOU WILL FIND A COPY OF THE ORIGINAL WORKSHEET SHOWING THE CORRECT UNIT PRICE PER CASE FOR THE INDIVIDUAL ITEMS WE BID UPON. * * *"

IN CASES WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF THE CONTRACT, OUR OFFICE WILL GRANT RELIEF ONLY IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. SEE B-166606, MAY 15, 1969; B-163970, MAY 7, 1968; AND THE CASES CITED THEREIN. IN A MEMORANDUM OF AUGUST 25, 1969, THE CONTRACTING OFFICER FURNISHED EVIDENCE SHOWING THAT BOUILLON IS PURCHASED ABOUT FIVE TIMES ANNUALLY AND THAT CHICKEN BOUILLON HAS ALWAYS COST LESS THAN BEEF BOUILLON. FURTHERMORE, IT APPEARS THE PRICES PAID FOR THE THREE MOST RECENT AWARDS PRIOR TO THE PRESENT SOLICITATION FOR EACH TYPE OF BOUILLONS ARE AS FOLLOWS:

CHICKEN BEEF MONTH AND YEAR DESTINATION BOUILLON BOUILLON OF AWARD ------

-------------- BELL, CALIF. 7.15 8.449 OCT. -68 HINES, ILL.

6.25 7.789 OCT. -68 SOMERVILLE, N.J. 6.258 6.939

OCT. -68 BELL, CALIF. 7.00 8.00 DEC. -68 HINES, ILL.

6.10 7.50 DEC. -68 SOMERVILLE, N.J. 6.05 7.239

DEC. -68 HINES, ILL. 6.03 7.15 FEB. -69 SOMERVILLE, N.J.

6.07 7.30 FEB. -69

IT IS OBVIOUS FROM THE ABOVE COMPARISON OF COSTS THAT BEEF BOUILLON IS MORE COSTLY THAN CHICKEN BOUILLON. IN THE PRESENT INVITATION, ALL FIRMS BIDDING ON BOTH PRODUCTS, WITH ONE EXCEPTION (EXCLUDING FINER FOODS SALES), ALSO BID HIGHER ON BEEF BOUILLON THAN FOR CHICKEN BOUILLON. THE EXCEPTION WAS A FIRM WHOSE BID OF $10 FOR EACH ITEM BID UPON WAS CONSIDERED TO BE EXCESSIVE.

IN VIEW OF THE ABOVE CIRCUMSTANCES, WE BELIEVE THAT THE MISTAKE MADE BY FINER FOODS SALES ON ITEM 13 WAS SO APPARENT THAT THE CONTRACTING OFFICER WAS, OR SHOULD HAVE BEEN ON NOTICE OF THE POSSIBLE ERROR, AND SHOULD HAVE REQUESTED VERIFICATION OF THE PRICE QUOTED PRIOR TO AWARD. IT IS REPORTED THAT DELIVERY OF ITEM 13 HAS NOT BEEN MADE. THEREFORE, WE AGREE WITH THE ADMINISTRATIVE RECOMMENDATION THAT THE AWARD OF ITEM 13 SHOULD BE CANCELED WITHOUT LIABILITY TO THE CONTRACTOR.