B-175227, APR 20, 1972

B-175227, APR 20, 1972

CONTRACTS - ERROR IN BID - REQUESTED ADJUSTMENT DECISION ALLOWING CORRECTION OF AN ERROR IN BID MADE BY THE ATLANTIC AVIATION SUPPLY COMPANY ON A CONTRACT WITH THE AGRICULTURAL RESEARCH SERVICE, MINNEAPOLIS, MINN., FOR THREE AIRCRAFT ENGINES. IN VIEW OF THE SUBSTANTIAL DIFFERENCE BETWEEN ATLANTIC'S BID PRICE AND THOSE OF THE TWO OTHER BIDDERS, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE ERROR AND REQUESTED BID VERIFICATION. ACCORDINGLY, SINCE THE BID AS CORRECTED WILL STILL BE THE LOWEST BID ON THE ENGINES, THE CONTRACT MAY BE AMENDED AS ADMINISTRATIVELY RECOMMENDED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 11, 1972, WITH ENCLOSURES, FROM THE DIRECTOR, OFFICE OF PLANT AND OPERATIONS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE ATLANTIC AVIATION SUPPLY COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH CONTRACT NO. R-2137-ARS-72 IS BASED.

ON SEPTEMBER 27, 1971, THE AGRICULTURAL RESEARCH SERVICE, MINNEAPOLIS, MINNESOTA, REQUESTED BIDS FOR FURNISHING THREE AVCO LYCOMING DIVISION, FACTORY REMANUFACTURED AIRCRAFT ENGINES, ONE WITH 70 - AMP ALTERNATOR (ITEM 1) AND TWO ENGINES WITH 50 - AMP ALTERNATORS (ITEM 2). UNDER ITEM 3, THE INVITATION PROVIDED FOR A TRADE-IN ALLOWANCE ON THREE USED AVCO, LYCOMING DIVISION, GOVERNMENT-OWNED AIRCRAFT ENGINES. THREE BIDS WERE RECEIVED. ATLANTIC AVIATION QUOTED AN AGGREGATE TOTAL BID PRICE OF $10,986 FOR ITEMS 1 AND 2, LESS $4,140 FOR A TRADE-IN ALLOWANCE FOR THE THREE USED ENGINES, OR A TOTAL OF $6,846. THE SECOND LOWEST BIDDER QUOTED AN AGGREGATE TOTAL BID PRICE OF $11,412 FOR ITEMS 1 AND 2, LESS $2,813.40 FOR A TRADE-IN ALLOWANCE FOR THE THREE USED ENGINES, OR A TOTAL OF $8,598.60. THE THIRD BIDDER QUOTED AN AGGREGATE TOTAL BID PRICE OF $13,289.40 FOR ITEMS 1 AND 2, LESS $3,726 FOR A TRADE-IN ALLOWANCE FOR THE THREE USED ENGINES, OR A TOTAL OF $9,563.40. ON OCTOBER 26, 1971, AN AWARD WAS MADE TO ATLANTIC AVIATION IN THE AMOUNT OF $6,846.

BY LETTER DATED NOVEMBER 10, 1971, ATLANTIC AVIATION ADVISED THE CONTRACTING OFFICER THAT ERROR HAD BEEN MADE IN COMPUTING THE BID PRICES FOR ITEMS 1 AND 2. THE CONTRACTOR STATED THAT IT HAD INTENDED TO QUOTE THE MANUFACTURER'S PRICE OF $4,752 LESS A DISCOUNT OF 14 PERCENT, OR A UNIT PRICE OF $4,086.72 FOR EACH OF THE ENGINES REQUIRED UNDER ITEMS 1 AND 2. THE COMPANY REQUESTED THAT THE CONTRACT PRICE FOR ITEM 1 BE INCREASED TO $4,086.72 AND THAT THE CONTRACT PRICE OF ITEM 2 BE INCREASED TO $8,173.44. IF THE PRICES FOR ITEMS 1 AND 2 ARE CORRECTED AS REQUESTED, THE AGGREGATE TOTAL PRICE LESS TRADE-IN ALLOWANCE OF $4,140 WOULD BE $8,120.16. IN SUPPORT OF ITS ALLEGATION OF ERROR, ATLANTIC AVIATION SUBMITTED THE PRINTED PRICE LIST OF ITS SUPPLIER, AVCO, LYCOMING DIVISION, WILLIAMSPORT, PENNSYLVANIA.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDDERS ON THE AIRCRAFT ENGINES QUOTED AGGREGATE TOTAL BID PRICES (INCLUDING TRADE-IN ALLOWANCE) OF $8,598.60 AND $9,563.40. IN VIEW OF THE SUBSTANTIAL DIFFERENCE BETWEEN THE AGGREGATE TOTAL BID OF ATLANTIC AVIATION OF $6,846 AND THE OTHER AGGREGATE BIDS, WE AGREE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CONTRACTOR'S BID AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION THEREOF.

IT IS REPORTED THAT BECAUSE OF THE URGENT NEED FOR THE AIRCRAFT ENGINES, ATLANTIC AVIATION WAS REQUESTED TO PROCEED WITH THE DELIVERY OF THE REMANUFACTURED AIRCRAFT ENGINES. ACCORDINGLY, CONTRACT NO. R 2137-ARS-72 MAY BE AMENDED TO PROVIDE FOR A CONTRACT PRICE OF $8,120.16 FOR THE THREE AIRCRAFT ENGINES, AS ADMINISTRATIVELY RECOMMENDED, AND PAYMENT FOR THE ENGINES IS AUTHORIZED TO BE MADE ON THAT BASIS. THE BID AS CORRECTED WILL STILL BE THE LOWEST BID ON THE ENGINES.

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