B-180842, APR 9, 1974

B-180842, APR 9, 1974

BIDDER WHOSE TOTAL BID PRICE OF $3,734 FOR TWO TRANSFORMERS WAS SUBSTANTIALLY LOWER THAN NEXT LOW BID OF $5,040 MAY HAVE CONTRACT RESCINDED SINCE EXISTENCE OF SUBSTANTIAL DIFFERENCE BETWEEN LOW AND NEXT LOW BID COUPLED WITH FACT THAT BOTH HIGH AND LOW BID QUOTATIONS WERE FROM SAME BRAND NAME MANUFACTURER WAS SUFFICIENT TO PUT CONTRACTING OFFICER ON NOTICE OF POSSIBILITY OF ERROR IN BID AND CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION BEFORE ACCEPTANCE.

TO NOLAND COMPANY:

INVITATION FOR BIDS (IFB) NO. DACW54-B-0005 WAS ISSUED BY THE UNITED STATES ARMY ENGINEER DISTRICT, WILMINGTON, NORTH CAROLINA, FOR TWO TRANSFORMERS, METERING CURRENT, 115 KV LINE TO LINE, GENERAL ELECTRIC COMPANY TYPE KW 550, WESTINGHOUSE ELECTRIC CO. TYPE ACT OR EQUAL. RESPONSE, NOLAND COMPANY (NOLAND) SUBMITTED A TOTAL BID PRICE OF $3,734. IN ITS BID, NOLAND INDICATED THAT THE TRANSFORMERS OFFERED WOULD BE MANUFACTURED BY GENERAL ELECTRIC COMPANY (GE). AWARD WAS MADE TO NOLAND AS THE LOW BIDDER.

BY LETTER DATED SEPTEMBER 17, 1973, AND SUBSEQUENT CORRESPONDENCE, NOLAND ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MADE IN THE QUOTATION BY THE MANUFACTURER, GE, TO NOLAND. IT APPEARS FROM THE DOCUMENTATION SUBMITTED THAT GE, IN RESPONSE TO TWO REQUESTS FROM NOLAND FOR QUOTATIONS ON TWO DIFFERENT TRANSFORMERS, INADVERTENTLY PLACED THE ABOVE-REFERENCED SOLICITATION NUMBER ON THE QUOTATION FOR THE TRANSFORMER OTHER THAN THE ONE REQUIRED BY THE INSTANT SOLICITATION. NOLAND BID FROM THIS QUOTATION WITHOUT NOTICING THAT THE QUANTITY AND DESCRIPTION OF THE TRANSFORMER WERE DIFFERENT FROM THOSE IN THE SOLICITATION.

THE TWO OTHER BIDS WHICH WERE SUBMITTED IN RESPONSE TO THE SOLICITATION WERE FOR THE TOTAL PRICES OF $5,040 AND $5,600. THE PRICE DISPARITY BETWEEN THE LOW AND SECOND LOW BIDS IS $1,306, OR 26 PERCENT. THE PRICE DISPARITY BETWEEN LOW AND HIGH BIDS IS $1,866, OR 33-1/3 PERCENT. ADDITION, IT SHOULD BE NOTED THAT THE HIGH AND LOW BIDS WERE QUOTED FROM THE SAME MANUFACTURER, GE.

THE CONTRACTING OFFICER HAS ACKNOWLEDGED THAT HE FAILED TO NOTICE THE DISPARITY IN PRICES AND THAT HAD HE DONE SO, HE WOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD.

FROM THE FOREGOING, IT MAY BE CONCLUDED THAT THE MISTAKE OF NOLAND WAS SO APPARENT THAT IT PLACED THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR AND THAT THE BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD. AGREE, THEREFORE, WITH THE ADMINISTRATIVE RECOMMENDATION THAT THE CONTRACT TO NOLAND BE RESCINDED WITHOUT LIABILITY TO THAT FIRM.