B-165273, MAY 8, 1969

B-165273: May 8, 1969

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KUNZIG: REFERENCE IS MADE TO OUR LETTER OF JANUARY 15. THE BIDS WERE SOLICITED F.O.B. BIDS WERE RECEIVED ON THE SLEEPING BAG ITEMS FROM ONLY TWO FIRMS. CCI WAS THE LOW BIDDER TO ALL DESTINATIONS UNDER ITEM 1 THROUGH ITEM 5. TAPATCO WAS THE LOW BIDDER TO ALL DESTINATIONS UNDER ITEM 6 AND THE ONLY BIDDER UNDER ITEM 7. TAPATCO WAS THE INCUMBENT CONTRACTOR AND ONLY BIDDER FOR THE SLEEPING BAG AND COMPONENTS FOR THE TWO PRIOR YEARS. WHICH COVER SUBSTANTIAL QUANTITIES AND ARE FAIRLY REPRESENTATIVE. WERE AS FOLLOWS: CCI TAPATCO ITEM 1-M (SLEEPING BAG) $18.50 $25.59 ITEM 2-H (OUTER SHELL) 10.50 12.50 ITEM 3-F (BASIC LINER) 8.00 9.51 ITEM 4-F (SHEET) 2.70 3.00 ITEM 5-M (COMFORTER) 7.50 8.20 ITEM 6-F (CARRYING BAG) 3.85 3.81 ITEM 7-F (KAPOK SHEET) NO BID 5.56 A FINANCIAL RESPONSIBILITY AND A PLANT FACILITIES CHECK WAS REQUESTED ON CCI.

B-165273, MAY 8, 1969

TO MR. KUNZIG:

REFERENCE IS MADE TO OUR LETTER OF JANUARY 15, 1969, TO YOUR PREDECESSOR, FORWARDING A COPY OF OUR DECISION OF THE SAME DATE TO SHER AND HARRIS, 888 SEVENTEENTH STREET, N.W., WASHINGTON, D.C., ATTORNEYS FOR CALIFORNIA CAMPING INDUSTRIES, INCORPORATED (CCI), DENYING A REQUEST FOR RELIEF FROM EXCESS COSTS OF $17,689.84 ASSESSED BY THE GOVERNMENT FOR DEFAULT UNDER REQUIREMENTS-TYPE CONTRACT NO. GS 08S-23715, DATED APRIL 20, 1967, ENTERED INTO BY THE FEDERAL SUPPLY SERVICE, REGION 8, DENVER, COLORADO. RECONSIDERATION OF THE DECISION HAS BEEN REQUESTED.

THE CONTRACT AROSE FROM INVITATION FOR BIDS NO. 99056, ISSUED ON FEBRUARY 9, 1967, FOR REQUIREMENTS OF ITEMS INCLUDING FABRIC SLEEPING BAGS AND COMPONENTS COVERING THE PERIOD FROM DATE OF AWARD THROUGH FEBRUARY 15, 1968. THE BIDS WERE SOLICITED F.O.B. DESTINATION TO A NUMBER OF GSA SUPPLY DEPOTS IN VARIOUS LOCATIONS. THE INVITATION DESCRIBED THE ITEMS HERE AT ISSUE AS FOLLOWS: "1. 8465-753-5951 - BAG, SLEEPING, FABRIC: IN ACCORDANCE WITH U.S. DEPARTMENT OF AGRICULTURE FOREST SERVICE SPECIFICATION 5100-33A DATED APRIL 1965 AND AMENDMENT 1, DATED SEPTEMBER 1965. ASSEMBLY CONSISTS OF AN OUTER SHELL, BASIC LINER AND SHEET. SIZE: APPROXIMATELY 35 INCHES WIDE, 82 INCHES LONG. MINIMUM ORDER - 10 EACH ESTIMATED

CONTRACT UNIT F.O.B. DESTINATIONS: QUANTITY UNIT PRICE AMOUNT

* * * * * * * "2. 8465-780-1601 - OUTER SHELL, SLEEPING BAG: IN ACCORDANCE WITH FOREST SERVICE SPECIFICATION NO. 5100-33A DATED APRIL 1965 AND AMENDMENT 1 DATED SEPTEMBER 1965. FOR FOREST SERVICE FABRIC SLEEPING BAG 8.25 OUNCE ARMY DUCK, OLIVE DRAB COLOR. TREATED FOR WATER, WEATHER, AND MILDEW RESISTANCE. WITH DRAW CORD AND SLIDE FASTENER. SIZE APPROXIMATELY 74 X 80 INCHES. MINIMUM ORDER - 10 EACH F.O.B. DESTINATIONS:

* * * * * * * "3. 8465-780-1600 - BASIC LINER FOR SLEEPING BAG: IN ACCORDANCE WITH FOREST SERVICE SPECIFICATION NO. 5100-33A DATED APRIL 1965 AND AMENDMENT 1 DATED SEPTEMBER 1965. AN OLIVE DRAB, QUILTED, SHEETING COVERED, POLYESTER FIBER FILLED MATTRESS PAD WITH SNAP FASTENERS. SIZE APPROXIMATELY 82 X 72 INCHES. MINIMUM ORDER - 10 EACH F.O.B. DESTINATIONS:

* * * * * * * "4. 8465-769-2819 - SHEET FOR SLEEPING BAG: IN ACCORDANCE WITH FOREST SERVICE SPECIFICATION NO. 5100-33A DATED APRIL 1965 AND AMENDMENT 1 DATED SEPTEMBER 1965. AN OLIVE DRAB COTTON SHEET WITH SNAP FASTENERS. APPROXIMATE SIZE 69-1/2 X 84 INCHES. MINIMUM ORDER - 15 EACH F.O.B. DESTINATIONS:"

ITEM 5 COVERED A SUPPLEMENTAL COMFORTER FOR THE SLEEPING BAG, FSN: 8465- 780-1603, AND ITEM 6 COVERED A CARRYING BAG FOR THE SLEEPING BAG, FSN: 8465-780-1602, AND ITEM 7 COVERED A KAPOK SHEET FOR THE SLEEPING BAG, FSN: 846-634-3518.

BIDS WERE RECEIVED ON THE SLEEPING BAG ITEMS FROM ONLY TWO FIRMS, CCI, GARDENA, CALIFORNIA, AND TAPATCO, INCORPORATED, FAIRFIELD, CALIFORNIA. CCI WAS THE LOW BIDDER TO ALL DESTINATIONS UNDER ITEM 1 THROUGH ITEM 5. TAPATCO WAS THE LOW BIDDER TO ALL DESTINATIONS UNDER ITEM 6 AND THE ONLY BIDDER UNDER ITEM 7. TAPATCO WAS THE INCUMBENT CONTRACTOR AND ONLY BIDDER FOR THE SLEEPING BAG AND COMPONENTS FOR THE TWO PRIOR YEARS. THE PRICES QUOTED FOR DELIVERY TO AUBURN, WASHINGTON, WHICH COVER SUBSTANTIAL QUANTITIES AND ARE FAIRLY REPRESENTATIVE, WERE AS FOLLOWS:

CCI TAPATCO

ITEM 1-M (SLEEPING BAG) $18.50 $25.59

ITEM 2-H (OUTER SHELL) 10.50 12.50

ITEM 3-F (BASIC LINER) 8.00 9.51

ITEM 4-F (SHEET) 2.70 3.00

ITEM 5-M (COMFORTER) 7.50 8.20

ITEM 6-F (CARRYING BAG) 3.85 3.81

ITEM 7-F (KAPOK SHEET) NO BID 5.56

A FINANCIAL RESPONSIBILITY AND A PLANT FACILITIES CHECK WAS REQUESTED ON CCI. BOTH CHECKS WERE REPORTED SATISFACTORY. THE 30-DAY ACCEPTANCE TIME ALLOWED BY CCI WAS ABOUT TO EXPIRE ON APRIL 6, 1967, AND ON APRIL 4, 1967, TELEPHONE CONTACT WAS MADE WITH A REPRESENTATIVE OF CCI. THE REPRESENTATIVE WAS REQUESTED TO EXTEND THE TIME FOR ACCEPTANCE AND, ALSO, TO CONFIRM THE PRICES BID AS THEY WERE CONSIDERABLY LOWER THAN ON THE OTHER BID. CCI'S REPRESENTATIVE OFFERED ORALLY TO GRANT AN EXTENSION OF 30 ADDITIONAL DAYS FOR ACCEPTANCE AND TO CONFIRM THE PRICES BID, BUT HE WAS ADVISED THAT BOTH SHOULD BE DONE IN WRITING. ON APRIL 11, 1967, A TELEGRAM WAS RECEIVED FROM CCI GRANTING THE EXTENSION OF TIME FOR ACCEPTANCE AND CONFIRMING THE PRICES BID. CONTRACT NO. GS-08S-23715 FOR ITEMS 1 THROUGH 5 WAS AWARDED, AND NOTICE THEREOF MAILED TO CCI ON APRIL 20, 1967. THE NOTICE OF AWARD ADVISED CCI, IN PART, AS FOLLOWS:

"YOUR BID ON THE ABOVE NUMBERED INVITATION FOR BIDS IS HEREBY ACCEPTED AS TO THE ITEMS ENUMERATED BELOW WITH THE ADDITIONS OR CHANGES MADE BY YOU, WHICH ADDITIONS OR CHANGES ARE SET FORTH IN FULL BELOW. REQUIREMENT CONTRACT - (INDEFINITE DELIVERY) 1. FSN: 8465 753-5951 - BAG, SLEEPING, FABRIC 2. FSN: 8465-780-1601 - OUTER SHELL, SLEEPING BAG 3. FSN: 8465- 780-1600 - BASIC LINER FOR SLEEPING BAG 4. FSN: 8465-769-2819 - SHEET FOR SLEEPING BAG 5. FSN: 8465 780-1603 - COMFORTER FOR SLEEPING BAG DESTINATIONS: A THROUGH M AS ENCIRCLED CONTRACT PERIOD: APRIL 20, 1967 THROUGH FEBRUARY 15, 1968 F.O.B. POINT: GSA SUPPLY DEPOTS INDICATED"

CCI, BY LETTER DATED MAY 18, 1967, ADVISED OF INFORMATION OBTAINED FROM THE LOCAL GSA INSPECTOR THAT THE SLEEPING BAG REQUIRED A SHEET WITH THE BASIC BAG (ITEM 1). IN THAT LETTER AND SUBSEQUENT CORRESPONDENCE CCI ADVISED THAT IN BIDDING IT WAS UNDER THE IMPRESSION THAT THE SHEET WAS A SEPARATE ITEM AND WAS TO BE BID ON SEPARATELY; THAT IT WOULD BE IMPOSSIBLE TO INCLUDE THE SHEET WITH THE BAG AT THE PRICE FOR ONLY THE OUTER SHELL AND THE BASIC LINER; AND THAT IF A SHEET WAS REQUIRED WITH EACH SLEEPING BAG, THE SHEET COULD BE ORDERED SEPARATELY UNDER ITEM 4 OR INCLUDED WITH THE OUTER SHELL AND BASIC LINER AT AN INCREASE IN COST OF $2.70 EACH. WAS FURTHER STATED THAT WHEN THE LOCAL GSA REPRESENTATIVE CONDUCTED THE PREAWARD SURVEY NO MENTION WAS MADE OF ANY ITEMS AND THAT AT THE TIME OF PRICE VERIFICATION IT WAS CCI'S UNDERSTANDING THAT THE SLEEPING BAG (ITEM 1) CONSISTED ONLY OF THE OUTER SHELL AND THE BASIC LINER, AND THAT ALL OTHER ITEMS, INCLUDING THE SHEET, WERE EXTRA ITEMS TO BE BID ON SEPARATELY.

CCI WAS ADVISED THAT THE LAST SENTENCE OF ITEM 1 CLEARLY STATED THAT "ASSEMBLY CONSISTS OF AN OUTER SHELL, BASIC LINER AND SHEET" AND THAT ITS LETTERS WOULD BE CONSIDERED AS AN ALLEGATION OF ERROR IN BID AFTER AWARD; THAT EVIDENCE MUST BE SUBMITTED IN SUPPORT OF THE ALLEGED ERROR AFTER WHICH CONSIDERATION WOULD BE GIVEN TO GRANTING RELIEF; AND THAT IN THE MEANWHILE CCI WOULD BE REQUIRED TO PERFORM IN ACCORDANCE WITH ITS CONTRACT. CCI WAS ADVISED THAT THE SLEEPING BAGS WERE URGENTLY REQUIRED AND THAT FAILURE TO PERFORM WOULD REQUIRE TERMINATING THE CONTRACT FOR DEFAULT. CCI STATED THAT IT COULD NOT START PRODUCTION AND MAKE DELIVERY OF THE SLEEPING BAGS UNTIL THE MATTER WAS RESOLVED. BY LETTER DATED AUGUST 17, 1967, CCI WAS NOTIFIED THAT THE CONTRACT WAS TERMINATED FOR DEFAULT PURSUANT TO ARTICLE 11 (A) (II) OF THE GENERAL PROVISIONS OF THE CONTRACT.

WE HELD IN THE DECISION OF JANUARY 15, 1969, THAT SINCE THE REQUEST FOR VERIFICATION OF THE BID WAS ADEQUATE TO PLACE CCI ON NOTICE THAT THE GOVERNMENT SUSPECTED THE POSSIBILITY OF AN ERROR IN THE BID AND ACCEPTANCE WAS NOT MADE UNTIL AFTER THE PRICES HAD BEEN CONFIRMED, THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT AND, THEREFORE, NO LEGAL BASIS EXISTED TO GRANT RELIEF FROM THE EXCESS COSTS INCURRED DUE TO CCI'S DEFAULT UNDER THE CONTRACT.

ON FURTHER CONSIDERATION OF ALL THE FACTS AND CIRCUMSTANCES WE DO NOT BELIEVE THAT CCI SHOULD BE HELD LIABLE FOR THE EXCESS COSTS. THERE IS NO QUESTION THAT CCI'S BID PRICES ON ITEM 1 REFLECTED ITS UNDERSTANDING AS TO WHAT WAS REQUIRED, NAMELY, AN OUTER SHELL AND A BASIC LINER. ON THIS PREMISE THERE WAS NO MISTAKE IN CCI'S BID AND IT WAS ON SUCH BASIS THAT THE VERIFICATION WAS GIVEN. SUCH UNDERSTANDING WAS FAIRLY APPARENT FROM CCI'S BID ITSELF SINCE THE PRICES FOR ITEM 1 WERE APPROXIMATELY THE TOTAL OF ONLY THE PRICES FOR ITEM 2 (OUTER SHELL) AND ITEM 3 (BASIC LINER), WITHOUT THE COST OF ITEM 4 (THE SHEET). THE BASIC DESCRIPTION OF ITEM 1 IN THE INVITATION WAS ,8465 753-5951-BAG, SLEEPING, FABRIC.' ALSO IN THE NOTICE OF AWARD ITEM 1 WAS DESCRIBED FSN:8465-753-5951-BAG, SLEEPING, FABRIC.'

WHILE IT IS TRUE THAT THE NEXT TO THE LAST SENTENCE OF THE DESCRIPTION OF ITEM 1 IN THE INVITATION STATED THAT "ASSEMBLY CONSISTS OF AN OUTER SHELL, BASIC LINER AND SHEET," THE BASIC DESCRIPTION WAS SIMPLY "BAG, SLEEPING, FABRIC," WITHOUT ANY INDICATION THAT AN "ASSEMBLY" WAS REQUIRED. LIKEWISE THE NOTICE OF AWARD DID NOT REFER TO AN "ASSEMBLY.' FURTHERMORE, THE THING ACTUALLY BID UPON WAS "UNIT".

IN FURTHER SUPPORT OF CCI'S UNDERSTANDING, IT IS NOTED THAT THE TOTAL ESTIMATED QUANTITIES SET FORTH IN THE INVITATION WERE: 3,625 FOR ITEM 1; 220 FOR ITEM 2; 230 FOR ITEM 3, AND 3,200 FOR ITEM 4 (SHEET). THUS ITEMS 2 AND 3 WERE CLEARLY REPLACEMENT COMPONENTS FOR ITEM 1. HOWEVER, SINCE ITEM 4 COVERED A SUBSTANTIAL QUANTITY, SUCH FACTOR WOULD APPEAR TO SUPPORT CCI'S BELIEF THAT THE SHEET WAS A SEPARATE ITEM. IN ANY EVENT, WE BELIEVE THAT THE LACK OF CLARITY IN THE DESCRIPTION OF ITEM 1 CONTRIBUTED TO CCI'S ERRONEOUS BELIEF THAT A SHEET WAS NOT INCLUDED.

ON THE BASIS OF ALL OF THE FACTS AND PARTICULARLY SINCE THE ERROR WAS APPARENT ON THE FACE OF THE BID WE CONCLUDE THAT THIS CASE COMES WITHIN THE RULE THAT, IF A MATERIAL MISTAKE IS MADE BY ONE PARTY TO A CONTRACT AND THE OTHER PARTY, IF AWARE OF ALL THE FACTS, WOULD HAVE HAD REASON TO KNOW OF THE MISTAKE DESPITE THE PRICE VERIFICATION, THE PARTY MAKING THE MISTAKE HAS THE RIGHT TO RESCISSION. SEE 44 COMP. GEN. 383. SEE, ALSO, CORBIN ON CONTRACTS, SECTIONS 609 AND 610.

ACCORDINGLY, YOU ARE ADVISED THAT CALIFORNIA CAMPING INDUSTRIES, INCORPORATED, SHOULD BE RELIEVED FROM THE EXCESS COSTS INCURRED BECAUSE OF ITS PURPORTED DEFAULT UNDER CONTRACT NO. GS-08S-23715.

THE DOCUMENTS RELATING TO THIS PROCUREMENT WHICH WERE FORWARDED BY YOUR GENERAL COUNSEL UNDER LETTER OF APRIL 10, 1969, ARE RETURNED.

SHER AND HARRIS, ATTORNEYS FOR CCI, ARE BEING FURNISHED A COPY OF THIS DECISION.

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