B-177498, MAR 7, 1973

B-177498: Mar 7, 1973

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HIS SUBSEQUENT DECISION ALLOWING NOVELTY'S EMENDATION OF ITS BID TO SHOW ITS INTENDED BID PRICE WERE PROPER IN LIGHT OF NOVELTY'S SUBMISSION OF DETAILED WORKSHEETS CONCLUSIVELY ESTABLISHING NOT ONLY THE EXISTENCE OF A MISTAKE. AS WELL AS WHAT NOVELTY WOULD HAVE BID IN THE ABSENCE OF A MISTAKE. THE PROTEST IS DENIED. ALTERNATE BIDS WERE REQUESTED ON THE REQUIREMENT. SINCE HE BELIEVED THE COMPANY'S PRICES WERE OUT OF LINE WITH THE OTHER PRICES RECEIVED. THE CONTRACTOR STATED: WE FIND THAT AN ERROR WAS MADE IN LISTING THE COST OF TAPE IN OUR WORK SHEET AS $.435 PER HUNDRED BANDOLEERS INSTEAD OF THE CORRECT COST OF $4.35 PER HUNDRED BANDOLEERS. THE CONTRACTOR FORWARDED A NOTARIZED ORIGINAL OF ITS WORKSHEET FOR THE PROCUREMENT WHICH IS HEADED BY THE IFB NUMBER AND BID OPENING DATE.

B-177498, MAR 7, 1973

BID PROTEST - AMENDED BID PRICE - CONCLUSIVE EVIDENCE OF INADVERTANT ERROR DECISION DENYING THE PROTEST OF KINGS POINT MANUFACTURING CO., INC., AGAINST THE AWARD OF A CONTRACT TO NOVELTY PRODUCTS CO. UNDER AN IFB ISSUED AS A PARTIAL SMALL BUSINESS SET ASIDE BY FRANKFORD ARSENAL, PA. THE CONTRACTING OFFICER'S VERIFICATION OF BID PRICE PURSUANT TO ASPR 2- 406.3(E)(1), AND HIS SUBSEQUENT DECISION ALLOWING NOVELTY'S EMENDATION OF ITS BID TO SHOW ITS INTENDED BID PRICE WERE PROPER IN LIGHT OF NOVELTY'S SUBMISSION OF DETAILED WORKSHEETS CONCLUSIVELY ESTABLISHING NOT ONLY THE EXISTENCE OF A MISTAKE, BUT ALSO THE NATURE AND CIRCUMSTANCES SURROUNDING THE MISTAKE, AS WELL AS WHAT NOVELTY WOULD HAVE BID IN THE ABSENCE OF A MISTAKE. ACCORDINGLY, THE PROTEST IS DENIED.

TO KINGS POINT MANUFACTURING COMPANY, INC.:

WE REFER TO YOUR LETTER OF NOVEMBER 16, 1972, CONCERNING YOUR PROTEST UNDER INVITATION FOR BIDS (IFB) NO. DAAA25-73-B-0031, ISSUED AS A PARTIAL SMALL BUSINESS SET-ASIDE BY FRANKFORD ARSENAL, DEPARTMENT OF THE ARMY, ON AUGUST 3, 1972, FOR A REQUIREMENT OF M-3 BANDOLEERS. ALTERNATE BIDS WERE REQUESTED ON THE REQUIREMENT, AS FOLLOWS:

ALTERNATE A

ITEM 0001 NON SET-ASIDE PORTION 4,000,000 EACH

ITEM 0001 SET-ASIDE PORTION 4,000,000 EACH

ITEM 0002 BASIC PORTION 2,000,000 EACH

ALTERNATE B

ITEM 0001 NON SET-ASIDE PORTION 3,000,000 EACH

ITEM 0001 SET-ASIDE PORTION 3,000,000 EACH

ITEM 0002 BASIC PORTION 2,000,000 EACH

ALTERNATE C

ITEM 0001 NON SET-ASIDE PORTION 2,000,000 EACH

ITEM 0001 SET-ASIDE PORTION 2,000,000 EACH

ITEM 0002 BASIC PORTION 2,000,000 EACH

NOVELTY PRODUCTS COMPANY, YOUR COMPANY, AND FOUR OTHER FIRMS SUBMITTED BIDS FOR THE REQUIREMENT BY THE DATE SET FOR BID OPENING ON OCTOBER 10, 1972. THE LOW BIDDER, NOVELTY, BID $.2634 A UNIT FOR ALL ITEMS EXCEPT ITEM 0001 UNDER ALTERNATE C FOR WHICH IT BID $.264 A UNIT. THE PRICES OFFERED BY OTHER BIDDERS RANGED FROM $.319 TO $.39 A UNIT.

THE DEPARTMENT REPORTS THAT THE CONTRACTING OFFICER SUBSEQUENTLY REQUESTED NOVELTY TO VERIFY ITS BID, SINCE HE BELIEVED THE COMPANY'S PRICES WERE OUT OF LINE WITH THE OTHER PRICES RECEIVED. BY LETTER OF NOVEMBER 8, 1972, THE CONTRACTOR STATED:

WE FIND THAT AN ERROR WAS MADE IN LISTING THE COST OF TAPE IN OUR WORK SHEET AS $.435 PER HUNDRED BANDOLEERS INSTEAD OF THE CORRECT COST OF $4.35 PER HUNDRED BANDOLEERS. THE MISTAKE IN PLACING THE DECIMAL POINT IN THE WRONG PLACE RESULTED IN ARRIVING AT A BID PRICE OF $.2634 PER BANDOLEER. IF THE ERROR HAD NOT OCCURRED, OUR BID PRICE WOULD BE $.3051 PER BANDOLEER AS SHOWN ON SCHEDULE A ATTACHED.

IN SUPPORT OF ITS CLAIM, THE CONTRACTOR FORWARDED A NOTARIZED ORIGINAL OF ITS WORKSHEET FOR THE PROCUREMENT WHICH IS HEADED BY THE IFB NUMBER AND BID OPENING DATE. ALSO, AT THE BOTTOM OF THE WORKSHEET THE STATEMENT "BID .2634/2% 20 DAYS" WAS ENCIRCLED. THE FOLLOWING PERTINENT COMPUTATIONS WERE SET FORTH IN THE WORKSHEET:

MATERIALS PER HUNDRED

BANDOLEERS (C)

SHEETING-(54") 20.465 YDS AT .65 YD 13.20225

TAPE - 114.2 YDS AT 3.81 C .43510

23.31318

PROFIT 2.50

25.81318

2% DISCOUNT .5268

26.33998

THE GENERAL COUNSEL OF THE PROCURING ACTIVITY REVIEWED THE EVIDENCE AND DECIDED ON NOVEMBER 29, 1972, THAT NOVELTY SHOULD BE PERMITTED TO CORRECT ITS BID, AS FOLLOWS:

A REVIEW OF THE ORIGINAL WORKSHEET DISCLOSES THAT NOVELTY PRODUCTS COMPANY HAS UNDER HEADING "MATERIAL" INCLUDED A SUBHEADING "TAPE" WHICH READS 114.2 YARDS AT 3.81C AND A TOTAL COST FIGURE OF .43510. THE LOW BIDDER MADE AN ERROR IN THE PLACEMENT OF THE DECIMAL POINT AND THE CORRECT FIGURE SHOULD BE 4.3510. IN THE CONTRACTOR'S SECOND WORKSHEET SETTING FORTH ITS CORRECT INTENDED BID PRICE THE CONTRACTOR USES THE CORRECTED FIGURE OF 4.351. TO THIS IS ADDED THE SAME MATERIAL COSTS AS WERE USED IN THE ORIGINAL WORKSHEET. THE LOW BIDDER THEN ADDS THE SAME LABOR COSTS AS WERE USED IN THE ORIGINAL BID SHEET AND THE SAME PROFIT FIGURE IS ALSO USED IN BOTH WORKSHEETS. THE G&A FIGURE IN THE INTENDED CORRECTED BID PRICE USES THE SAME PERCENTAGE AS WAS USED IN THE ORIGINAL COMPUTATION, NAMELY 4.3%. SINCE THE TOTAL FIGURE HAS BEEN CHANGED THE G&A FIGURE IS THEREFORE CHANGED IN THE SAME PERCENTAGE AMOUNT. THE LOW BIDDER ALSO USED A 2% DISCOUNT FIGURE IN BOTH THE ORIGINAL WORKSHEET AND THE INTENDED CORRECTED BID SHEET. THE CORRECT AMOUNT FOR 100 BANDOLEERS IS 30.50761 AND THE CORRECT UNIT PRICE IS .3051. ALSO ATTACHED TO THE LETTER MENTIONED ABOVE IS A LETTER FROM SOUTHERN WEAVING COMPANY QUOTING A PRICE OF 3,000,000 YARDS AT $3.81C/YD. THE INFORMATION SHOWN ON THE WORKSHEET DISCLOSES AN ERROR IN THE PLACING OF A DECIMAL POINT. THE ERROR IS ARITHMETIC IN NATURE. THE INFORMATION FURNISHED CONSTITUTES CLEAR AND CONVINCING EVIDENCE NOT ONLY OF THE MISTAKE IN BID BUT ALSO THE INTENDED BID PRICE AT THE TIME OF BID SUBMISSION.

THEREFORE, I HEREBY DETERMINE THAT IN THE BEST INTEREST OF THE GOVERNMENT THE CONTRACTING OFFICER SHOULD BE AND HEREBY IS AUTHORIZED TO PERMIT NOVELTY PRODUCTS COMPANY TO CORRECT ITS BID ON ITEM 0001 FROM .2634 EACH TO .3051 EACH UNDER IFB DAAA25-73-B-0031.

THE RECORD SHOWS THAT, AFTER THE DEPARTMENT NOTIFIED THIS OFFICE OF ITS INTENT TO MAKE AN AWARD NOTWITHSTANDING THE PENDENCY OF YOUR PROTEST, THE CONTRACTING OFFICER MADE AN AWARD IN DECEMBER 1972 ON AN URGENCY BASIS TO NOVELTY FOR 2,000,000 BANDOLEERS UNDER ITEM 0001 OF ALTERNATE C AT $.3051 A UNIT.

YOU MAINTAIN THAT THE DISCREPANCY BETWEEN NOVELTY'S UNCORRECTED BID AND THE OTHER BIDS IN THE PRESENT PROCUREMENT WAS NOT UNUSUAL CONSIDERING THE BIDS FOR IDENTICAL ITEMS UNDER PRIOR PROCUREMENTS; THAT THE WORKSHEET SUBMITTED BY NOVELTY WAS SELF-SERVING; AND THAT IT CANNOT BE CONSIDERED CLEAR AND COMPELLING EVIDENCE OF THE MISTAKE AND THE INTENDED BID SO AS TO PERMIT CORRECTION OF THE COMPANY'S BID.

WITH RESPECT TO YOUR ALLEGATION THAT NOVELTY'S BID SHOULD NOT HAVE BEEN CONSIDERED ERRONEOUS IN VIEW OF THE PRICES BID IN PRIOR PROCUREMENTS, THE DEPARTMENT POINTS OUT THAT WHILE NOVELTY RECEIVED AN AWARD FOR BANDOLEERS IN FEBRUARY 1972, AT $.227 A UNIT, THE PRICE OF COTTON CLOTH, WHICH IS THE GREATEST COST ITEM IN BANDOLEERS, HAS INCREASED CONSIDERABLY IN RECENT MONTHS. FURTHER, THE DEPARTMENT REPORTS THAT NOVELTY'S UNIT PRICES IN PRIOR PROCUREMENTS FOR BANDOLEERS WERE APPROXIMATELY 7 PERCENT LOWER THAN THOSE OF THE NEXT LOWEST BIDDERS, WHEREAS IN THE SUBJECT PROCUREMENT NOVELTY'S PRICE WAS APPROXIMATELY 18 PERCENT LOWER THAN THAT OF THE NEXT LOWEST BIDDER. BECAUSE OF THESE CIRCUMSTANCES, THE DEPARTMENT MAINTAINS THAT IT WAS JUSTIFIED IN REQUESTING NOVELTY TO VERIFY ITS BID IN ACCORDANCE WITH ASPR 2-406.3(E)(1), AS FOLLOWS:

IN THE CASE OF ANY SUSPECTED MISTAKE IN BID, THE CONTRACTING OFFICER WILL IMMEDIATELY CONTACT THE BIDDER IN QUESTION CALLING ATTENTION TO THE SUSPECTED MISTAKE, AND REQUEST VERIFICATION OF HIS BID. *** IF A BIDDER ALLEGES A MISTAKE, THE CONTRACTING OFFICER WILL ADVISE THE BIDDER TO MAKE A WRITTEN REQUEST INDICATING HIS DESIRE TO WITHDRAW OR MODIFY THE BID. THE REQUEST MUST BE SUPPORTED BY STATEMENTS (SWORN STATEMENTS IF POSSIBLE) CONCERNING THE ALLEGED MISTAKE AND SHALL INCLUDE ALL PERTINENT EVIDENCE SUCH AS *** THE ORIGINAL WORKSHEETS AND OTHER DATA USED IN PREPARING THE BID *** AND ANY OTHER EVIDENCE WHICH CONCLUSIVELY ESTABLISHES THE EXISTENCE OF THE ERROR, THE MANNER IN WHICH IT OCCURRED, AND THE BID ACTUALLY INTENDED.

SINCE THE REGULATION DIRECTS THE CONTRACTING OFFICER TO REQUEST VERIFICATION OF ANY SUSPECTED MISTAKE, WE CANNOT CONCLUDE THAT IT WAS INAPPROPRIATE TO REQUEST NOVELTY TO VERIFY ITS PRICES. SEE B-175717, JUNE 26, 1972. NOR CAN WE CONCLUDE THAT NOVELTY'S NOTARIZED WORKSHEET SHOULD NOT HAVE BEEN ACCEPTED AS EVIDENCE OF THE MISTAKE, SINCE THE REGULATION SPECIFICALLY LISTS WORKSHEETS AS EVIDENCE TO BE SUBMITTED BY A BIDDER CLAIMING MISTAKE IN BID.

FURTHERMORE, WE HAVE INDEPENDENTLY EXAMINED THE DOCUMENTS SUBMITTED BY NOVELTY, AND WE BELIEVE THEY CONCLUSIVELY ESTABLISH NOT ONLY THE EXISTENCE OF MISTAKE, BUT ITS NATURE, HOW IT OCCURRED, AND WHAT THE COMPANY WOULD HAVE BID IN THE ABSENCE OF MISTAKE. IT IS THEREFORE OUR OPINION THAT THE DEPARTMENT PROPERLY DECIDED TO LET NOVELTY CORRECT ITS BID FROM $.2634 TO $.3051 A UNIT UNDER ALTERNATES A AND B. SEE ASPR 2 406.3(A)(2).

HOWEVER, WE CANNOT AGREE THAT THE CONTRACTING OFFICER WAS ENTITLED, ON THE BASIS OF THE RECORD THEN BEFORE HIM, TO MAKE AN AWARD AT $.3051 A UNIT UNDER ALTERNATE C, FOR WHICH NOVELTY'S UNCORRECTED PRICE WAS $.264 A UNIT. IN THIS SITUATION, WE BELIEVE THAT HE SHOULD HAVE QUESTIONED NOVELTY, PRIOR TO MAKING THE SUBJECT AWARD, ABOUT THE DISCREPANCY BETWEEN THE COMPANY'S BID OF $.264 A UNIT FOR ALTERNATE C AND ITS PRICE OF $.2634 A UNIT AS SHOWN ON THE WORKSHEET AND MADE CERTAIN THAT NOVELTY ALSO INTENDED, ALBEIT ERRONEOUSLY, A BID OF $.2634 A UNIT FOR THAT ALTERNATE.

IN THIS REGARD, NOVELTY, BY TELEGRAM OF FEBRUARY 8, 1973, HAS ADVISED THIS OFFICE THAT IT MADE AN INADVERTENT ERROR IN ITS BID FOR ITEM 0001 OF ALTERNATE C BY LEAVING OUT THE FIGURE "3" BETWEEN THE 6 AND THE 4 IN THE UNIT PRICE; THAT ITS BID FOR ALTERNATE C SHOULD HAVE BEEN IDENTICAL TO THE PRICES BID FOR ALTERNATES A AND B; AND THAT THE WORKSHEET FURNISHED TO THE DEPARTMENT COVERS ALL BANDOLEERS REGARDLESS OF ALTERNATES.

WE BELIEVE THAT THIS STATEMENT, TOGETHER WITH THE ABSENCE OF ANY INDICATION IN THE WORKSHEET THAT THE ARITHMETICAL COMPUTATIONS THEREIN APPLIED ONLY TO ALTERNATES A AND B, FULLY SUPPORTS NOVELTY'S CLAIM THAT ITS UNCORRECTED PRICE FOR ALTERNATE C SHOULD HAVE BEEN $.2634 A UNIT, AND THAT ITS CORRECTED PRICE FOR THAT ALTERNATE SHOULD THEREFORE BE $.3051 A UNIT. IN VIEW THEREOF, AND INASMUCH AS THE PROCURING ACTIVITY REPORTS THAT THE FAILURE TO RESOLVE THIS DISCREPANCY PRIOR TO AWARD WAS AN INADVERTENT OVERSIGHT, WE MUST CONCLUDE THAT THE AWARD AT THE CORRECTED PRICE IS NOT SUBJECT TO LEGAL QUESTION.

FOR THE REASONS SET FORTH ABOVE YOUR PROTEST MUST BE DENIED.