B-173454, JUL 27, 1971

B-173454, JUL 27, 1971

REQUIREMENTS CONTRACT - REFORMATION OF DECISION ALLOWING REFORMATION OF A REQUIREMENTS CONTRACT LET TO ADAMS INDUSTRIES, INC. BY THE PROCUREMENT DIVISION, FEDERAL SUPPLY SERVICE, REGION 7, FORT WORTH, TEXAS. THE CONTRACTING OFFICER'S REPORT INDICATES THAT HE SHOULD HAVE BEEN ON NOTICE OF AN ERROR IN THE BID AND SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD. SINCE THE RECORD SUBSTANTIATES THE EXISTENCE OF THE ERROR, ADAMS MAY NOT BE LEGALLY HELD TO THE CONTRACT UNIT PRICE, AND AN INCREASE TO THE AUDITED VERIFIED UNIT PRICE SHOULD BE GRANTED.

TO MR. KUNZIG:

WE REFER TO A LETTER DATED JUNE 30, 1971, FROM THE GENERAL COUNSEL, FORWARDING, FOR OUR REVIEW AND DECISION, THE FINDINGS AND DETERMINATION OF A CONTRACTING OFFICER RECOMMENDING REFORMATION OF REQUIREMENTS CONTRACT NO. GS-07S-14982, AWARDED TO ADAMS INDUSTRIES, INC. (ADAMS), BY THE PROCUREMENT DIVISION, FEDERAL SUPPLY SERVICE, REGION 7, FORT WORTH, TEXAS.

THE SOLICITATION UNDER WHICH THE CONTRACT WAS AWARDED COVERED NINE ITEMS OF FLEXIBLE, WATERPROOFED BARRIER MATERIAL. AWARD OF ITEM 5 OF THE SOLICITATION WAS MADE TO ADAMS ON JUNE 16, 1970, AS THE LOW BIDDER AT A UNIT PRICE OF $10.26. THE ITEM CALLED FOR ROLLS OF BARRIER MATERIAL FOR INTERIOR WRAPPING, 72 INCHES WIDE AND 200 YARDS LONG. SUBSEQUENT TO AWARD, BY LETTER DATED OCTOBER 30, 1970, A REPRESENTATIVE OF ADAMS ADVISED THE CONTRACTING OFFICER THAT AN ERROR IN BID HAD BEEN MADE. MORE SPECIFICALLY, THE FIRM HAD PRICED THE REQUIRED MATERIAL ON THE BASIS OF 100-RATHER THAN 200-YARD ROLLS.

THE CONTRACTING OFFICER HAS DETERMINED THAT THE DISCREPANCY BETWEEN ADAMS' BID AND THE OTHER TWO HIGHER BIDS RECEIVED ON THE ITEM, 68.3 AND 237.1 PERCENT, RESPECTIVELY, SHOULD HAVE PLACED HIM ON NOTICE THAT A MISTAKE IN BID HAD BEEN MADE; THEREFORE, HE STATES THAT THE BID SHOULD HAVE BEEN VERIFIED PRIOR TO CONTRACT AWARD. HOWEVER, ADAMS SUBMITTED SEVERAL CONFLICTING COST ANALYSES IN AN ATTEMPT TO SUPPORT AND DOCUMENT ITS INTENDED BID. IN VIEW THEREOF, YOUR AGENCY CONDUCTED AN AUDIT REVIEW OF THE CLAIM OF BID ERROR. THE REPORT OF AUDIT VERIFIED THAT A LATER REVISED COST ANALYSIS WHICH WAS FURNISHED BY ADAMS TO SUPPORT A UNIT PRICE OF $13.26 WAS REASONABLE AND IN ACCORDANCE WITH RELEVANT COST RECORDS.

THE GENERAL COUNSEL RECOMMENDS THAT THE CONTRACT BE RESCINDED AND ADAMS COMPENSATED ON A QUANTUM MERUIT BASIS FOR ROLLS OF ITEM 5 DELIVERED AT THE UNIT PRICE OF $13.26. IN THIS REGARD, WE NOTE THAT THE CONTRACTOR HAS DELIVERED 245 ROLLS UNDER ITEM 5, AND THAT A CURRENT ORDER REQUIRED DELIVERY OF AN ADDITIONAL 45 ROLLS IN JUNE. THE CONTRACT EXPIRES JULY 31, 1971.

IT IS OUR VIEW THAT ADAMS CANNOT LEGALLY BE HELD TO THE CONTRACT UNIT PRICE SINCE THE CONTRACTING OFFICER IS CLEARLY CHARGEABLE WITH NOTICE OF ADAMS' ERROR. THEREFORE, IN THE ABSENCE OF PROOF OF WHAT ADAMS' BID WOULD HAVE BEEN IN THE ABSENCE OF ERROR, WE BELIEVE THAT ADAMS IS ENTITLED TO AN INCREASE IN THE CONTRACT PRICE TO THE AUDITED VERIFIED UNIT PRICE OF $13.26 AS REASONABLE COMPENSATION FOR THE ARTICLES DELIVERED AND TO BE DELIVERED UNDER THE CONTRACT. SEE 48 COMP. GEN. 672, 676 (1969). IT IS NOTED THAT THIS ADJUSTED UNIT PRICE WILL NOT DISPLACE THE NEXT LOW BIDDER'S UNIT PRICE.

AS REQUESTED, THE ENCLOSURES FORWARDED WITH THE GENERAL COUNSEL'S LETTER ARE RETURNED HEREWITH.