B-170147, JUL. 13, 1970

B-170147: Jul 13, 1970

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

ALLEGED ERROR IN FAILING TO INCLUDE COST OF INSTALLING AND MAINTAINING THE STORAGE FACILITY MAY HAVE CONTRACT CANCELLED SINCE THE DIFFERENCE IN PRICE BETWEEN LOW BID AND OTHERS AND COST ANALYSIS ESTABLISHES THAT CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR AND HAD BID VERIFIED. SEABORG: REFERENCE IS MADE TO LETTER DATED JUNE 23. AT-(15-1)-438 ON ACCOUNT OF A MISTAKE ALLEGED TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO SOLICITATION NO. 151-70-295. THE SIX BIDS RECEIVED IN RESPONSE TO THE SOLICITATION WERE OPENED ON MAY 12. THE LOW BID WAS SUBMITTED BY THE CHEMETRON CORPORATION. THE TWO NEXT LOWEST BIDS WERE IN THE AMOUNT OF $0.0054 AND $0.0051 PER CUBIC FOOT.

B-170147, JUL. 13, 1970

CONTRACTS -- MISTAKE DECISION TO THE CHAIRMAN, ATOMIC ENERGY COMMISSION AUTHORIZING CANCELLATION OF AWARD TO CHEMETRON CORPORATION, NATIONAL CYLINDER GAS DIVISION ON ACCOUNT OF A MISTAKE IN BID. LOW BIDDER WHO, AFTER AWARD OF CONTRACT FOR LIQUID OXYGEN, ALLEGED ERROR IN FAILING TO INCLUDE COST OF INSTALLING AND MAINTAINING THE STORAGE FACILITY MAY HAVE CONTRACT CANCELLED SINCE THE DIFFERENCE IN PRICE BETWEEN LOW BID AND OTHERS AND COST ANALYSIS ESTABLISHES THAT CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR AND HAD BID VERIFIED.

TO DR. SEABORG:

REFERENCE IS MADE TO LETTER DATED JUNE 23, 1970, FROM THE DIRECTOR, DIVISION OF CONTRACTS, REQUESTING A DECISION WHETHER THE CHEMETRON CORPORATION, NATIONAL CYLINDER GAS DIVISION, MAY BE RELIEVED OF PERFORMING CONTRACT NO. AT-(15-1)-438 ON ACCOUNT OF A MISTAKE ALLEGED TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO SOLICITATION NO. 151-70-295, ISSUED BY UNITED STATES ATOMIC ENERGY COMMISSION, PADUCAH, KENTUCKY.

THE SOLICITATION, ISSUED ON APRIL 7, 1970, REQUESTED BIDS ON A CUBIC FOOT BASIS FOR FURNISHING AN ESTIMATED 1,000,000 CUBIC FEET OF LIQUID OXYGEN DURING THE FISCAL YEAR 1971. THE SOLICITATION PROVIDED THAT THE PRICE QUOTED SHOULD INCLUDE THE FURNISHING ON A LOAN BASIS OF AN OXYGEN SUPPLY STORAGE FACILITY, INSTALLATION AND MAINTENANCE BY THE CONTRACTOR, AT NO EXPENSE TO THE GOVERNMENT.

THE SIX BIDS RECEIVED IN RESPONSE TO THE SOLICITATION WERE OPENED ON MAY 12, 1970, AS SCHEDULED. THE LOW BID WAS SUBMITTED BY THE CHEMETRON CORPORATION, NATIONAL CYLINDER GAS DIVISION, IN THE AMOUNT OF $0.0033 PER CUBIC FOOT. THE TWO NEXT LOWEST BIDS WERE IN THE AMOUNT OF $0.0054 AND $0.0051 PER CUBIC FOOT. CONTRACT NO. AT-(15-1)-438 WAS AWARDED ON MAY 20, 1970, TO THE CHEMETRON CORPORATION, NATIONAL CYLINDER GAS DIVISION, ON THE BASIS OF ITS LOW BID OF $0.0033 PER CUBIC FOOT.

ON JUNE 3, 1970, A REPRESENTATIVE OF THE CHEMETRON CORPORATION ADVISED THE CONTRACTING AGENCY BY TELEPHONE THAT A MISTAKE HAD BEEN MADE IN ITS BID. IT WAS STATED THAT THE UNIT PRICE QUOTED FAILED TO TAKE INTO ACCOUNT THE COST OF INSTALLING AND MAINTAINING THE STORAGE FACILITY FOR STORAGE OF THE OXYGEN, AS REQUIRED BY THE SOLICITATION. THIS COST WAS ESTIMATED AT APPROXIMATELY $2,400 FOR THE YEAR. THE ALLEGATION OF MISTAKE WAS CONFIRMED BY LETTER DATED JUNE 4, 1970, AND IT WAS STATED THAT THE PRICE SHOULD HAVE BEEN $0.0057 PER CUBIC FOOT.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THE DIFFERENCE IN BID PRICES BETWEEN THE LOW BID AND THE OTHER BIDS AND THE ANALYSIS OF COSTS BY THE ADMINISTRATIVE OFFICER, PADUCAH AREA OFFICE, THERE APPEARS NO DOUBT THAT AN ERROR WAS IN FACT MADE IN THE BID, AS ALLEGED. FURTHERMORE, THE CIRCUMSTANCES ARE SUCH THAT THE CONTRACTING OFFICER IS CHARGEABLE WITH CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE BID. SEE COMP. GEN. 383.

ACCORDINGLY, CONTRACT NO. AT-(15-1)-438 AWARDED TO CHEMETRON CORPORATION, NATIONAL CYLINDER GAS DIVISION, ON THE BASIS OF ITS MISTAKEN BID MAY BE CANCELLED AND THE AWARD MADE TO THE NEXT LOW BIDDER, AS RECOMMENDED.