B-142736, JUL. 15, 1960

B-142736, JUL. 15, 1960

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED MAY 26, 1960, WITH ENCLOSURES, FROM MR. C. D. BEAN, COMMISSIONER, FEDERAL SUPPLY SERVICE, SUBMITTING A REPORT IN RESPONSE TO OUR LETTER OF MAY 5, 1960, CONCERNING ALLEGATIONS MADE BY THE SUNROC CORPORATION, GLEN RIDDLE, PENNSYLVANIA, RESPECTING THE AWARD MADE BY THE GENERAL SERVICES ADMINISTRATION AS TO ITEM 1 UNDER INVITATION FOR BIDS NO. FN-2C-25462-A-3-24-60, DATED MARCH 11, 1960, FOR THE FURNISHING OF ELECTRIC WATER COOLERS.

IT WAS STATED IN THE LETTER OF MAY 26, 1960, THAT THE VARIOUS BIDS WERE EVALUATED ON THE BASIS OF THE TRANSPORTATION COSTS TO THE SEVERAL DESTINATIONS INVOLVED; THAT USING THE LOWEST OVERLAND FREIGHT RATES, IN SUCH EVALUATION, THE HALSEY W. TAYLOR COMPANY WAS FOUND TO BE THE LOW BIDDER ON ITEM 1 AND THAT COMPANY ACCORDINGLY RECEIVED AN AWARD FOR THE ADVERTISED PORTION OF THE NVITATION; AND THAT SUNROC THEN PROTESTED THE AWARD OF ITEM 1 TO THE TAYLOR COMPANY ON THE GROUND THAT ON THE BASIS OF CERTAIN FREIGHT TARIFFS KNOWN TO BE AVAILABLE TO THE GOVERNMENT AND, BY VIRTUE OF THE COMBINATION ELEMENTS OF ITS BID, SUNROC WAS ACTUALLY THE LOW BIDDER FOR ITEMS 1, 2, AND 8 AND, THEREFORE, ENTITLED TO AN AWARD FOR SUCH ITEMS. IT WAS FURTHER REPORTED THAT AFTER SEVERAL TELEPHONE CALLS, AND A SERIES OF COMPUTATIONS, IT WAS FOUND THAT SUNROC ACTUALLY WAS THE LOW BIDDER FOR THE THREE ITEMS ON THE ADVERTISED PORTION BY THE AMOUNT OF $17.

IN A DECISION DATED NOVEMBER 15, 1957, B-134074, 37 COMP. GEN. 330, TO THE SECRETARY OF THE ARMY, WE HAD UNDER CONSIDERATION THE MATTER OF AN AWARD OF A CONTRACT BY THE DEPARTMENT OF THE ARMY TO A BIDDER DETERMINED TO BE LOW ON THE BASIS OF AN ERRONEOUS FREIGHT COMPUTATION, AND WE HELD THE AWARD TO BE INVALID UNDER PROVISIONS OF 10 U.S.C. 2305 (B) WHICH REQUIRES AN AWARD TO BE MADE TO THE LOW BIDDER. WE ENCLOSE FOR YOUR INFORMATION A COPY OF OUR LETTER OF TODAY TO THE SUNROC COMPANY IN WHICH, FOR THE REASONS STATED, WE HAVE CONCLUDED THAT IT WOULD NOT NOW BE IN THE BEST INTERESTS OF THE GOVERNMENT TO ATTEMPT TO CANCEL THE AWARD IN THIS CASE. NEVERTHELESS, UNDER THE FACTS REPORTED, THAT IS TO SAY, CONSIDERING THE EARLY DATE AT WHICH THE ERRONEOUS EVALUATION WAS DISCOVERED, AND IN THE LIGHT OF OUR HOLDING IN THE CITED DECISION OF NOVEMBER 15, 1957, WE ARE OF THE VIEW THAT THE MATTER OF THE CANCELLATION OF THE ERRONEOUS AWARD IN THIS CASE SHOULD HAVE BEEN SUBMITTED FOR OUR CONSIDERATION. ADMINISTRATIVE DETERMINATION NOT TO CORRECT AN ERRONEOUS AWARD CANNOT BE CONSIDERED AS ADDING TO THE VALIDITY OF SUCH AWARD OR AS PRECLUDING EXCEPTIONS TO PAYMENTS THEREUNDER.

ON PAGE TWO OF THE LETTER OF MAY 26, 1960, IT WAS STATED, IN JUSTIFICATION OF THE DECISION OF YOUR AGENCY NOT TO CANCEL THE ERRONEOUS AWARD, THAT PARAGRAPH FOUR OF THE SET-ASIDE CLAUSE IN THE INVITATION REQUIRED THE GOVERNMENT TO OFFER THE SET-ASIDE PORTIONAT THE HIGHEST PRICE PAID ON THE ADVERTISED PORTION; THAT THIS WOULD HAVE REQUIRED THE GOVERNMENT, IN THE EVENT OF AWARD OF ITEM 1 TO SUNROC, TO OFFER THE SET- ASIDE PORTION TO THE TAYLOR COMPANY AT THE PRICE OF $112.50 PER UNIT--- THE SUNROC BID--- LESS FREIGHT DIFFERENTIAL, INSTEAD OF THE PRICE OF $111 PER UNIT WHICH THE TAYLOR COMPANY BID; AND THAT SUCH PROCEDURE WOULD HAVE COST THE GOVERNMENT APPROXIMATELY $1,000, ETC.

IN A DECISION DATED JANUARY, 1960, B-141577, 39 COMP. GEN. 503, TO THE SECRETARY OF THE ARMY, WE GAVE CONSIDERATION TO THE MATTER OF AN AWARD MADE UNDER AN INVITATION FOR BIDS CALLING FOR THE FURNISHING OF 3,000 PAULINS, WITH AN ADDITIONAL 3,000 SET ASIDE FOR POSSIBLE PLACEMENT WITH CONCERNS LOCATED IN LABOR SURPLUS AREAS. IN THAT CASE THERE HAD BEEN AN ERRONEOUS AWARD, ARISING OUT OF A MISUNDERSTANDING OR MISINTERPRETATION OF THE TERMS OF ONE OF THE BIDS INVOLVED, COVERING THE UNRESTRICTED OR ADVERTISED PORTION. THERE IS ENCLOSED A COPY OF THE DECISION DATED JANUARY 8, 1960, WHEREIN, FOR THE REASONS SET FORTH, OUR OFFICE TOOK THE POSITION THAT THE PROVISIONS OF THE ARMED SERVICES PROCUREMENT REGULATIONS, REQUIRING THAT THE SET-ASIDE PRICE SHALL BE THE HIGHEST UNIT PRICE AWARDED ON THE NON-SET-ASIDE PORTION, SHOULD NOT BE CONSTRUED TO REQUIRE AN AWARD AT A PRICE HIGHER THAN THAT BID BY THE PARTY ENTITLED TO THE AWARD. SPECIFICALLY, WE HELD:

"* * * WE BELIEVE THERE IS A REASONABLE BASIS FOR HOLDING THAT THE "HIGHEST UNIT PRICE" SHOULD REPRESENT A UNIT PRICE ARRIVED AT IN THE REGULAR COURSE OF CONTRACTING RATHER THAN A UNIT PRICE ARRIVED AT THROUGH ERROR, AS IN THIS CASE, AND SHOULD IN NO EVENT BE CONSTRUED TO REQUIRE AN AWARD AT A PRICE HIGHER THAN THAT BID BY THE PARTY ENTITLED TO THE AWARD.

APPLYING THE REASONING IN THE CITED DECISION TO THE FACTS OF THIS CASE, IT APPEARS THERE WOULD HAVE BEEN NO PROPER BASIS FOR AWARDING THE SET- ASIDE PORTION TO THE TAYLOR COMPANY AT THE UNIT PRICE OF THE AWARD TO SUNROC, BUT THAT AWARD OF THE SET-ASIDE SHOULD HAVE BEEN LIMITED TO THE UNIT PRICE SUBMITTED BY THE TAYLOR COMPANY. IN THAT CONNECTION, IT IS NOTED THAT TAYLOR HAD IN FACT ALREADY OFFERED TO ACCEPT THE SET ASIDE AT THE PRICE OF $111.

IT IS SUGGESTED THAT CONSIDERATION BE GIVEN TO APPROPRIATE AMENDMENT OF THE PERTINENT SECTIONS ..END :