B-174943, MAY 10, 1972

B-174943: May 10, 1972

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V. WEATHERFORD COMPANY FOR RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS QUOTATION. UPON WHICH THE BONNEVILLE POWER ADMINISTRATION PURCHASE ORDER WAS ISSUED FOR A PROCUREMENT OF COILS WITH SWITCH ASSEMBLIES. THE PURCHASE ORDER WAS ONLY AN OFFER TO BE ACCEPTED IN WRITING OR BY PERFORMANCE. SECRETARY: REFERENCE IS MADE TO A LETTER DATED MARCH 14. V. WEATHERFORD COMPANY FOR RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS QUOTATION UPON WHICH BONNEVILLE POWER ADMINISTRATION (BPA) PURCHASE ORDER NO. 12827 DATED FEBRUARY 10. WAS BASED. PURCHASE ORDER NO. 12827 WAS ISSUED ON FEBRUARY 10. THE SHIPMENT WAS REJECTED BECAUSE IT CONSISTED ONLY OF COILS AND NO RELAYS (SWITCH ASSEMBLIES).

B-174943, MAY 10, 1972

PROCUREMENT LAW - ERRONEOUS PRICE QUOTATION - REQUEST FOR RELIEF - QUANTUM VALEBAT CONCERNING A REQUEST OF THE R. V. WEATHERFORD COMPANY FOR RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS QUOTATION, UPON WHICH THE BONNEVILLE POWER ADMINISTRATION PURCHASE ORDER WAS ISSUED FOR A PROCUREMENT OF COILS WITH SWITCH ASSEMBLIES. UNDER THE TERMS OF THE RFQ, THE PURCHASE ORDER WAS ONLY AN OFFER TO BE ACCEPTED IN WRITING OR BY PERFORMANCE. SINCE WEATHERFORD FAILED TO DELIVER THE SUPPLIES REQUESTED IN THE RFQ, A BINDING CONTRACT NEVER CAME INTO EXISTENCE. HOWEVER, IN VIEW OF THE FACT THAT DELIVERY HAS NOW BEEN COMPLETED, THE COMPANY MAY BE PAID ON A QUANTUM VALEBAT BASIS IN AN AMOUNT EQUAL TO THE PRICE QUOTED BY THE NEXT LOWEST BIDDER.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED MARCH 14, 1972, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY, FURNISHING A REPORT ON THE REQUEST OF THE R. V. WEATHERFORD COMPANY FOR RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS QUOTATION UPON WHICH BONNEVILLE POWER ADMINISTRATION (BPA) PURCHASE ORDER NO. 12827 DATED FEBRUARY 10, 1971, WAS BASED.

ON FEBRUARY 1, 1971, THE R. V. WEATHERFORD COMPANY (WEATHERFORD) FURNISHED A WRITTEN QUOTATION OF $2.52 EACH FOR ITEM 1, 100 "RELAY, 110 V DC COIL, 5 AMP. DPDT CONTRACTS; POTTER & BRUMFIELD GPD COIL WITH GP11 SWITCH ASSEMBLY," FOR A TOTAL OF $252. PURSUANT TO THE QUOTATION, PURCHASE ORDER NO. 12827 WAS ISSUED ON FEBRUARY 10, 1971, CALLING FOR DELIVERY OF THE COILS WITH SWITCH ASSEMBLIES AND ONE OTHER ITEM.

ON MARCH 23, 1971, BPA RECEIVED A PARTIAL SHIPMENT FROM WEATHERFORD. THE SHIPMENT WAS REJECTED BECAUSE IT CONSISTED ONLY OF COILS AND NO RELAYS (SWITCH ASSEMBLIES). THE BALANCE OF THE SHIPMENT WAS RECEIVED FROM WEATHERFORD ON APRIL 9, 1971. THAT SHIPMENT ALSO WAS REJECTED BECAUSE IT INCLUDED COILS ONLY. ON APRIL 12, 1971, A REPRESENTATIVE OF WEATHERFORD ADVISED A BPA REPRESENTATIVE BY TELEPHONE THAT THE COMPANY WOULD SHIP THE GP11 SWITCH ASSEMBLIES TO BPA BUT THAT THERE WOULD BE AN ADDITIONAL CHARGE OF $1.40. THE BPA REPRESENTATIVE ADVISED THE WEATHERFORD REPRESENTATIVE THAT SHE WAS NOT AUTHORIZED TO BIND BPA TO A PRICE INCREASE BUT THAT SHE "WOULD SEE WHAT SHE COULD DO." THE SWITCH ASSEMBLIES WERE SHIPPED BY WEATHERFORD ON JULY 21, 1971, AND RECEIVED BY BPA ON AUGUST 9, 1971. THEREAFTER, BPA RECEIVED AN INVOICE DATED AUGUST 4, 1971, FROM WEATHERFORD FOR 100 GP11 SWITCH ASSEMBLIES AT A PRICE OF $1.40 EACH FOR A TOTAL OF $140.

IN A LETTER OF AUGUST 18, 1971, WEATHERFORD STATED THAT IN QUOTING ON ITEM 1 OF THE REQUEST FOR QUOTATIONS IT FAILED TO RECOGNIZE THAT THERE WERE TWO SEPARATE ITEMS AND, THEREFORE, IT QUOTED ONLY ON THE GPD COILS AT $2.52 EACH. WEATHERFORD AGAIN ADVISED THAT THERE WAS AN ADDITIONAL CHARGE OF $1.40 EACH FOR THE GP11 SWITCH ASSEMBLIES.

FOUR OTHER SUPPLIERS WERE REQUESTED TO SUBMIT QUOTATIONS ON THE GPD COILS WITH GP11 SWITCH ASSEMBLIES. ONE OFFEROR, HAMILTON/AVNET, QUOTED A UNIT PRICE OF $2.52, THE SAME PRICE QUOTED BY WEATHERFORD. THE OTHER OFFERORS QUOTED UNIT PRICES OF $3.90, $4.48 AND $5.70. SINCE HAMILTON/AVNET QUOTED THE SAME UNIT PRICE FOR THE EQUIPMENT AS WEATHERFORD, WE CONTACTED THE COMPANY AND REQUESTED THAT THEY VERIFY WHETHER THE $2.52 UNIT PRICE INCLUDED THE COST OF THE GP11 SWITCH ASSEMBLY. BY LETTER DATED MARCH 16, 1972, HAMILTON/AVNET ADVISED OUR OFFICE THAT "PRICES QUOTED DID NOT INCLUDE SWITCHING MECHANISMS."

IT IS NOTED THAT ON THE FACE OF THE REQUEST FOR QUOTATIONS (STANDARD FORM 18) THERE IS A STATEMENT THAT "THIS IS A REQUEST FOR INFORMATION, AND QUOTATIONS FURNISHED ARE NOT OFFERS." THIS LANGUAGE IS IN CONFORMITY WITH THE APPLICABLE REGULATIONS, WHICH STATE THAT STANDARD FORM 18 IS TO BE USED FOR THE PURPOSE OF OBTAINING PRICE, DELIVERY AND RELATED INFORMATION AND QUOTATIONS SUBMITTED ON STANDARD FORM 18 ARE NOT TO BE CONSTRUED AS OFFERS. CONSEQUENTLY, THE ISSUANCE OF A PURCHASE ORDER BY THE GOVERNMENT PURSUANT TO THESE QUOTATIONS DOES NOT CREATE A BINDING CONTRACT, THE PURCHASE ORDER AMOUNTING TO NOTHING MORE THAN AN OFFER WHICH MUST BE ACCEPTED, EITHER IN WRITING OR BY PERFORMANCE, BEFORE A BINDING CONTRACT COMES INTO EXISTENCE. SEE FEDERAL PROCUREMENT REGULATIONS (FPR) 1-16.201- 1 AND 1-16.201-4. ALSO SEE B-163898, JUNE 6, 1968; B-136348, SEPTEMBER 23, 1958; B-134926, FEBRUARY 12, 1958; 37 COMP. GEN. 258 (1957); AND 36 ID. 582 (1957).

IN THE PRESENT CASE, THERE IS NO EVIDENCE OF A WRITTEN ACCEPTANCE AND THE ONLY EVIDENCE OF PERFORMANCE IS THE DELIVERIES OF THE COILS ON MARCH 23 AND APRIL 9, 1971, AND THE DELIVERY OF THE SWITCH ASSEMBLIES ON AUGUST 9, 1971, WHICH WAS ALMOST FOUR MONTHS AFTER WEATHERFORD HAD ADVISED BPA THAT THERE WOULD BE AN ADDITIONAL CHARGE OF $1.40 EACH FOR THE GP11 SWITCH ASSEMBLIES. THUS, IT WOULD APPEAR THAT BPA WAS ON NOTICE PRIOR TO THE DELIVERY OF THE SWITCH ASSEMBLIES THAT THE $2.52 UNIT PRICE DID NOT INCLUDE THOSE ASSEMBLIES. ALTHOUGH THE PURCHASE ORDER REQUESTED DELIVERY OF COILS WITH SWITCH ASSEMBLIES, IT IS NOTED THAT THE FIRST TWO DELIVERIES MADE BY WEATHERFORD CONSISTED OF COILS ONLY. SINCE FPR 1-16.201-4 PROVIDES FOR ACCEPTANCE OF THE PURCHASE ORDER BY THE SUPPLIER EITHER IN WRITING OR BY FURNISHING THE SUPPLIES ORDERED OR BY PROCEEDING WITH THE WORK TO SUBSTANTIAL PERFORMANCE, AND AS THESE CONDITIONS WERE NOT MET AT THE TIME WEATHERFORD ADVISED THAT ITS QUOTATION WAS BASED UPON A PRICE FOR THE COILS ONLY, A CONTRACT DID NOT RESULT FOR THE COILS AND ASSEMBLIES. HOWEVER, SINCE WEATHERFORD HAS COMPLETED DELIVERY, IT SHOULD BE PAID ON A QUANTUM VALEBAT BASIS, WHICH IN THIS CASE WOULD BE THE REASONABLE VALUE OF THE GOODS SOLD AND DELIVERED.

ACCORDINGLY, IN VIEW OF THE RECORD INDICATING THAT THE PRICE QUOTED BY HAMILTON/AVNET, WHICH WAS IDENTICAL TO THE PRICE QUOTED BY WEATHERFORD, IS ALSO ERRONEOUS, PAYMENT IS AUTHORIZED TO BE MADE TO WEATHERFORD FOR THE QUANTITY OF COILS WITH SWITCH ASSEMBLIES DELIVERED BY IT UNDER THE PURCHASE ORDER AT A UNIT PRICE OF $3.90, THE NEXT LOWEST CORRECT QUOTATION RECEIVED IN RESPONSE TO THE REQUEST FOR QUOTATIONS.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER OR VOUCHERS COVERING PAYMENT FOR THE EQUIPMENT.