B-178605, MAY 25, 1973

B-178605, MAY 25, 1973

PERMISSION GIVEN TO CANCEL THE CONTRACT WITHOUT LIABILITY TO THE CLAREMONT CO., INC., FOLLOWING CONSIDERATION OF THE ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID UPON WHICH REQUIREMENTS CONTRACT NO. GS-07S 04584 WAS BASED.

TO MR. ARTHUR F. SAMPSON:

REFERENCE IS MADE TO A LETTER DATED MAY 3, 1973, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE CLAREMONT CO., INC., TO HAVE BEEN MADE IN ITS BID UPON WHICH REQUIREMENTS CONTRACT NO. GS-07S-04584 WAS BASED.

INVITATION NO. 7PR-W-10751/2F/7AB REQUESTED BIDS FOR FURNISHING TYPE I THERMAL INSULATION BATT AS REQUIRED DURING THE PERIOD FEBRUARY 1 THROUGH DECEMBER 31, 1973. IN RESPONSE, CLAREMONT SUBMITTED A BID IN THE AMOUNT OF $77.90 PER ROLL. THE ONLY OTHER BID IN THE AMOUNT OF $105.21 PER ROLL WAS SUBMITTED BY H. K. PORTER CO., INC.

SINCE CLAREMONT'S BID WAS 25 PERCENT LOWER THAN THE ONLY OTHER BID AND 37 PERCENT LOWER THAN THE PREVIOUS CONTRACT PRICE OF $125 PER ROLL, IT WAS REQUESTED BY GSA TELEGRAM OF JANUARY 26, 1973, TO VERIFY ITS BID. TELEGRAM OF THE SAME DATE, CLAREMONT CONFIRMED ITS BID PRICE. ON FEBRUARY 1, 1973, THE CONTRACT WAS AWARDED TO CLAREMONT.

ON FEBRUARY 13, 1973, CLAREMONT ADVISED THE CONTRACTING OFFICER THAT ITS PRICE OF $74.90 PER ROLL WAS ERRONEOUS BECAUSE IT WAS BASED ON FURNISHING TYPE II RATHER THAN TYPE I INSULATION BATT AS REQUIRED BY THE SPECIFICATIONS. IN A CONFIRMING LETTER DATED FEBRUARY 28, 1973, CLAREMONT REQUESTED THAT THE CONTRACT BE RESCINDED AND STATED ITS SOURCE FOR MANUFACTURING WAS BURLINGTON INDUSTRIES WHICH DOES NOT MANUFACTURE TYPE I GLASS FELT. IN SUPPORT OF ITS ALLEGATION OF ERROR, CLAREMONT SUBMITTED COPIES OF ITS PRICE LIST AND THAT OF ITS SUPPLIER, BURLINGTON SPECIAL PRODUCTS, A DIVISION OF BURLINGTON INDUSTRIES.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY ITS BID, ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947 (1939); AND 27 ID. 17 (1947). HOWEVER, IN HER FINDINGS, IN WHICH SHE RECOMMENDED RESCISSION OF THE CONTRACT, THE CONTRACTING OFFICER STATES THAT TYPE I MATERIAL UNDER THIS SPECIFICATION HAS A HISTORY OF BID MISTAKES; THAT TYPE II MATERIAL IS THE MORE COMMON ONE; AND THAT THE RECORDS OF THE CONTRACTING OFFICE SHOW THAT THE SAME TYPE OF MISTAKE - BIDDING ON TYPE II INSTEAD OF THE REQUIRED TYPE I MATERIAL - HAS BEEN ALLEGED ON THREE PREVIOUS OCCASIONS BY INDUSTRIAL INSULATORS, INC., AND NATIONAL DISTRIBUTING COMPANY. IN HIS LETTER OF MAY 3, 1973, IN WHICH HE RECOMMENDED RESCISSION OF THE CONTRACT, THE GENERAL COUNSEL STATES THAT BY DECISION B-170691, JANUARY 28, 1971, TO YOUR PREDECESSOR, WE AUTHORIZED RESCISSION OF THE CONTRACT AWARDED TO INDUSTRIAL INSULATORS, INC., BECAUSE IT HAD ERRONEOUSLY BASED ITS BID PRICE ON FURNISHING TYPE II INSTEAD OF TYPE I MATERIAL AS REQUIRED BY THE INVITATION. THE GENERAL COUNSEL ALSO POINTED OUT THAT UNDER THE SAME INVITATION, THE SECOND LOWEST BIDDER, NATIONAL DISTRIBUTING COMPANY, ALSO ALLEGED THAT IT HAD MADE THE SAME TYPE OF ERROR AS ALLEGED BY INDUSTRIAL. THE GENERAL COUNSEL CONTENDS THAT HAD THE CONTRACTING OFFICER MADE A REVIEW OF THE PROCUREMENT HISTORY OF THE TYPE I MATERIAL, WHICH GOOD PROCUREMENT PRACTICE WOULD REQUIRE, SHE WOULD HAVE DISCOVERED THAT THE H. K. PORTER CO., INC., WHICH COMPANY HAD QUOTED PRICES RANGING FROM $253.75 TO $274.68 UNDER PREVIOUS INVITATIONS, WAS THE ONLY KNOWN SOURCE FOR TYPE I MATERIAL. THE CONTRACTING OFFICER CONCURS IN THE FOREGOING STATEMENT. IN REGARD TO THE PRICE OF $105.21 QUOTED BY PORTER UNDER THE CURRENT SOLICITATION, THE GENERAL COUNSEL STATES THAT THE CONTRACTING OFFICE HAS LEARNED FROM THE COMPANY THAT IT WAS ABLE TO QUOTE A MUCH LOWER PRICE UNDER THE SUBJECT SOLICITATION BECAUSE IT HAD DEVELOPED A NEW PROCESS, USING MATERIAL OF ITS OWN MANUFACTURE, TO MAKE THE TYPE I MATERIAL. VIEW OF THE FOREGOING, IT WOULD APPEAR THAT THERE STILL EXISTED, AFTER CONFIRMATION, AMPLE REASON TO HAVE REQUESTED A FURTHER CLARIFICATION OF CLAREMONT'S BID PRIOR TO ACCEPTANCE.

ACCORDINGLY, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY TO CLAREMONT, AS ADMINISTRATIVELY RECOMMENDED.