B-134636, JAN. 10, 1958

B-134636: Jan 10, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED DECEMBER 9. NO. 57-546- ENG IS BASED. STANDARD FORM 33 WAS ACCOMPANIED BY A COVER LETTER. WHICH STATED THAT THE LETTER WAS A PART OF THE BID AND "TERMS WILL BE NET CASH THIRTY (30) DAYS FROM FIRST OF MONTH SUCCEEDING MONTH OF SHIPMENT.'. THE CONTRACTING OFFICER DID NOT NOTICE THAT THE PROMPT PAYMENT DISCOUNT OFFERED ON STANDARD FORM 33 WAS IN CONFLICT WITH THE TERMS OF PAYMENT IN THE COVER LETTER AND HE CONSIDERED THE COMPANY'S BID TO BE $1. WHEN THE DISCOUNT WAS TAKEN INTO CONSIDERATION. THE BID WAS LOWER THAN THE FIVE OTHER BIDS RECEIVED. IT WAS IN LINE WITH THE GOVERNMENT'S ESTIMATE OF $1. " PAYMENT WAS TENDERED TO THE CONTRACTOR IN ACCORDANCE WITH THE AWARDED CONTRACT.

B-134636, JAN. 10, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 9, 1957, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), WHO REQUESTS A DECISION REGARDING AN ERROR INTERNATIONAL HARVESTER COMPANY, WASHINGTON, D.C., ALLEGES IT MADE IN ITS BID ON WHICH UNNUMBERED CONTRACT O.I. NO. 57-546- ENG IS BASED.

IN RESPONSE TO INVITATION NO. DA-15-056-57-254, INTERNATIONAL HARVESTER COMPANY SUBMITTED ON STANDARD FORM 33 A BID, DATED JUNE 20, 1957, TO FURNISH THREE OLIVER SUPER 55 OR EQUAL TRACTORS AT A UNIT PRICE OF $1,966.44 LESS A PROMPT PAYMENT DISCOUNT OF "21 PERCENT, 30 CALENDAR DAYS.' STANDARD FORM 33 WAS ACCOMPANIED BY A COVER LETTER, DATED JUNE 20, 1957, WHICH STATED THAT THE LETTER WAS A PART OF THE BID AND "TERMS WILL BE NET CASH THIRTY (30) DAYS FROM FIRST OF MONTH SUCCEEDING MONTH OF SHIPMENT.' THE CONTRACTING OFFICER DID NOT NOTICE THAT THE PROMPT PAYMENT DISCOUNT OFFERED ON STANDARD FORM 33 WAS IN CONFLICT WITH THE TERMS OF PAYMENT IN THE COVER LETTER AND HE CONSIDERED THE COMPANY'S BID TO BE $1,966.44 LESS 21 PERCENT, OR $1,553.49 NET. WHEN THE DISCOUNT WAS TAKEN INTO CONSIDERATION, THE BID WAS LOWER THAN THE FIVE OTHER BIDS RECEIVED, WHICH RANGED FROM $1,568.50 TO $2,643.48, AND IT WAS IN LINE WITH THE GOVERNMENT'S ESTIMATE OF $1,500. ACCORDINGLY, ON JUNE 27, 1957, THE CONTRACTING OFFICER MADE AN AWARD TO THE COMPANY FOR TWO TRACTORS IN THE TOTAL AMOUNT OF $3,932.88 LESS 21 PERCENT DISCOUNT, 30 CALENDAR DAYS. THE CONTRACTOR DELIVERED THE TRACTORS ON AUGUST 1, 1957.

ALTHOUGH THE CONTRACTOR'S INVOICE CALLED FOR PAYMENT OF $3,932.88 "NET," PAYMENT WAS TENDERED TO THE CONTRACTOR IN ACCORDANCE WITH THE AWARDED CONTRACT. THE CONTRACTOR THEN ALLEGED THAT AN ERROR HAD BEEN MADE IN THE PREPARATION OF STANDARD FORM 33 IN THAT THE FIGURE "21" APPEARING IN THE SPACE PROVIDED FOR THE PROMPT PAYMENT DISCOUNT WAS INTENDED TO BE INSERTED IN THE SPACE PROVIDED FOR THE NUMBER OF DAYS FOR ACCEPTANCE. THE CONTRACTOR STATED THAT THE FACT THAT IT DID NOT INTEND ANY DISCOUNT IS EVIDENCED BY THE TERMS OF PAYMENT IN ITS LETTER DATED JUNE 20, 1957. THE PHOTOSTATIC COPY OF THE CONTRACTOR'S WORKSHEET ESTABLISHES THAT THE BIDDER INTENDED TO BID $1,966.44 "NET EACH 30 DAYS.' THE CONTRACTOR HAS ACCEPTED THE TENDERED CHECK SUBJECT TO CONSIDERATION OF ITS CLAIM FOR ITS INTENDED BID PRICE.

THE CONTRACTING OFFICER IN HIS STATEMENT RECOMMENDING THAT THE CONTRACTOR'S CLAIM BE DISALLOWED HAS STATED THAT THE BID MADE ON STANDARD FORM 33 MADE NO REFERENCE TO THE COVER LETTER, THAT THE BID PRICE OF $1,966.44 DID NOT APPEAR TO BE OUT OF ORDER, AND THAT THE CONTRACTOR DID NOT QUESTION THE TERMS OF THE CONTRACT UNTIL 74 DAYS AFTER AWARD, OR AFTER DELIVERY AND TENDERED PAYMENT.

THE CONTRACTOR'S COVER LETTER CLEARLY STATED THAT IT WAS A PART OF THE BID. THE FACT THAT THE CONTRACTOR'S BID ON STANDARD FORM 33 DID NOT MAKE ANY REFERENCE TO THE LETTER ACCOMPANYING IT DID NOT PRECLUDE CONSIDERATION OF THE STATEMENTS MADE IN THE LETTER. IN B-128399, DATED JULY 19, 1956, WE SAID:

"* * * IT IS COMMON PRACTICE FOR BIDDERS TO SET FORTH PRICES OR OTHER INFORMATION IN AN ACCOMPANYING LETTER AND SUCH BIDS HAVE ALWAYS BEEN CONSIDERED PROPER.'

INASMUCH AS STANDARD FORM 33 AND THE CONTRACTOR'S LETTER BOTH CONSTITUTED THE CONTRACTOR'S BID, THERE WAS A PATENT AMBIGUITY IN THE BID CONCERNING THE TERMS OF PAYMENT WHICH THE CONTRACTING OFFICER SHOULD HAVE NOTICED AND VERIFIED PRIOR TO MAKING AN AWARD.

THE PRICE THE CONTRACTOR INTENDED TO BID IS SUFFICIENTLY ESTABLISHED BY THE CONTRACTOR'S WORKSHEET. HOWEVER, IF THE BID WERE CORRECTED TO THE INTENDED PRICE IT WOULD NOT BE THE LOWEST PRICE RECEIVED. ACCORDINGLY, IN ADDITION TO THE PAYMENT ALREADY MADE TO THE CONTRACTOR, IT SHOULD BE PAID ON EACH UNIT ONLY THE DIFFERENCE BETWEEN THE ACCEPTED BID PRICE, $1,553.49, AND THE AMOUNT OF THE NEXT LOW BID, $1,568.50.

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