B-140875, OCT. 20, 1959

B-140875, OCT. 20, 1959

TO T. FITZHUGH WILSON, ESQUIRE:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 10, 1959, REQUESTING A CERTIFIED COPY OF CERTIFICATE OF INDEBTEDNESS RELATIVE TO THE INDEBTEDNESS TO THE UNITED STATES OF GAIENNIE WHOLESALE LUMBER, INC., IN THE SUM OF $858.90.

THE MATTER HERE UNDER CONSIDERATION AROSE OUT OF AN INVITATION ISSUED JANUARY 3, 1958, BY THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, REGION 3, WASHINGTON, D.C., BY WHICH BIDS WERE SOLICITED ON A UNIT PRICE PER "MBM" BASIS FOR FURNISHING:

"LUMBER, PONDEROSA PINE; FINISH, GRADE "B" AND BETTER," S2S AND KILN DRIED TO A MOISTURE CONTENT NOT TO EXCEED 19 PERCENT, IN RANDOM WIDTHS OF 6 TO 16 INCHES, AVERAGING 10 INCHES; RANDOM LENGTHS OF 8 TO 16 FEET, AVERAGING 12 FEET LONG; SHALL BE IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION MM-L-00751D, AND GRADED UNDER THE LATEST RULES OF WESTERN PINE ASSOCIATION. * * *" OF THE THICKNESS AND THE QUANTITY SET OUT IN ITEMS NOS. 1 THROUGH 3, RESPECTIVELY (PAGE 3 OF THE INVITATION). FOUR RESPONSIVE BIDS, RANGING IN UNIT PRICES FROM $249.75 TO $311.90, WERE RECEIVED ON ITEM NO. 1 WHICH CALLED FOR 20 UNITS. GAIENNIE WHOLESALE LUMBER, INC., SUBMITTED A BID DATED JANUARY 22, 1958, WITH QUOTATIONS ON ALL THREE ITEMS, ITS BID FOR FURNISHING THE LUMBER REQUIRED UNDER ITEM NO. 1 QUOTING A UNIT PRICE OF $249.75 WITH AN EXTENDED AMOUNT OF $5,895 IN THE TOTAL COLUMN.

BECAUSE THE GAIENNIE UNIT PRICE ON ITEM NO. 1 WAS THE LOWEST, ITS BID WAS ACCEPTED BY THE CONTRACTING OFFICER AND AWARD OF THAT ITEM WAS MADE ON AN UNNUMBERED CONTRACT DATED JANUARY 22, 1958, AND PURCHASE ORDER NO. WA- 61381-1 THEREFOR WAS MAILED TO THE COMPANY ON JANUARY 24, 1958, WITH THE UNIT PRICE OF $249.75 AND A CORRECTED TOTAL PURCHASE PRICE OF $4,995 ENTERED THEREON.

UPON RECEIPT OF THE PURCHASE ORDER, GAIENNIE WHOLESALE LUMBER, INC., BY LETTER DATED JANUARY 30, 1958, RETURNED THE PURCHASE ORDER TO THE GENERAL SERVICES ADMINISTRATION REGIONAL OFFICE AND ADVISED THAT IT HAD BID FOR FURNISHING THE LUMBER UNDER ITEM NO. 1 AT $294.75 PER THOUSAND BOARD FEET FOR A TOTAL OF $5,895 FOR THE 20 UNITS IN THE ITEM, BUT THAT THROUGH A TYPOGRAPHICAL ERROR THE UNIT PRICE WAS ENTERED ON ITS BID AS "249.75," HOWEVER, THE TOTAL AMOUNT OF ITS BID WAS CORRECTLY EXTENDED AND ENTERED AS $5,895.

IN REPLY, THE CHIEF OF THE NON-STORES BUYING BRANCH OF THE GENERAL SERVICES ADMINISTRATION, IN LETTER DATED FEBRUARY 4, 1958, ADVISED THE COMPANY THAT, UNDER THE RULING OF THE COMPTROLLER GENERAL, WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. THE BIDDER WAS ADVISED ALSO THAT SINCE NEITHER EXCEPTION TO THE RULE OCCURRED IN ITS CASE THE GENERAL SERVICES ADMINISTRATION WAS WITHOUT AUTHORITY TO GRANT ANY RELIEF AND THAT ITS ONLY POSSIBLE REMEDY WAS AN APPEAL TO THE COMPTROLLER GENERAL. THE COMPANY WAS FURTHER ADVISED THAT, IN THE MEANTIME, DELIVERY OF THE ITEM WOULD BE EXPECTED IN ACCORDANCE WITH THE TERMS OF THE CONTRACT AND PURCHASE ORDER; OTHERWISE, ITS RIGHT TO PROCEED MIGHT BE TERMINATED AND THE ITEM PURCHASED ELSEWHERE, WITH ANY ADDITIONAL COST BEING CHARGED TO THE COMPANY'S ACCOUNT. THE PURCHASE ORDER WAS RETURNED TO THE CONTRACTOR.

BY LETTER DATED FEBRUARY 13, 1958, THE CONTRACTOR REPLIED STATING THAT IT WAS ITS CONTENTION THAT THE ERROR IN TRANSPOSITION OF FIGURES ON ITS BID WAS APPARENT AND THAT THE BIDS FROM OTHER LUMBER CONCERNS ON THE SAME ITEM ALSO SHOULD HAVE MADE THE ERROR APPARENT TO THE CONTRACTING OFFICER. ALTHOUGH THE COMPANY ADVISED GENERAL SERVICES ADMINISTRATION IN A LATER LETTER DATED APRIL 16, 1958, THAT IT WAS APPLYING TO THE COMPTROLLER GENERAL FOR RELIEF, NO CLAIM WAS RECEIVED BY OUR OFFICE. BY LETTER DATED MAY 6, 1958, THE CONTRACTOR WAS ADVISED THAT SINCE DELIVERY UNDER THE PURCHASE ORDER HAD NOT BEEN ACCOMPLISHED AND IN VIEW OF THE URGENT NEED OF THE MERCHANDISE ITS RIGHT TO PROCEED WITH ANY OR ALL REMAINING DELIVERY WAS TERMINATED.

THEREAFTER, THE GENERAL SERVICES ADMINISTRATION PURCHASED THE LUMBER FROM ANOTHER SUPPLIER ON JUNE 23, 1958, AT AN EXCESS COST OF $858.90 AND MADE DEMAND ON GAIENNIE FOR THAT AMOUNT. GAIENNIE FAILED TO MAKE PAYMENT OF THIS AMOUNT AND, UPON REFERRAL OF THE INDEBTEDNESS TO THE GENERAL ACCOUNTING OFFICE FOR COLLECTION ACTION, IT WAS CERTIFIED TO BE INDEBTED TO THE UNITED STATES IN THE AMOUNT OF $858.90, WHICH IT HAS FAILED TO PAY AFTER SEVERAL DEMANDS.

IT IS TRUE THAT THE BID INVITATION HERE IN QUESTION PROVIDES THAT IN CASE OF ERROR IN EXTENSION OF PRICE IN THE BID THE UNIT PRICE WILL GOVERN. HOWEVER, IT IS OUR OPINION THAT SUCH PROVISION SHOULD ONLY BE APPLIED, WITHOUT REQUESTING VERIFICATION, WHERE THE CORRECTION RESULTS IN A RELATIVELY MINOR CHANGE IN THE EXTENDED PRICE OR WHERE THE CIRCUMSTANCES INDICATE THAT THE UNIT PRICE ACTUALLY REPRESENTS THE INTENDED PRICE. COMP. GEN. 746; 36 ID. 429.

THERE APPEARS NO BASIS FOR REASONABLE DOUBT THAT THE UNIT PRICE INGAIENNIE'S BID WAS IN ERROR RATHER THAN THE EXTENDED AMOUNT. THE UNIT PRICE OF $249.75 SHOWN ON THE BID WHEN MULTIPLIED BY THE NUMBER OF UNITS (20) DOES NOT EQUAL THE AMOUNT OF $5,895 APPEARING IN THE TOTAL COLUMN OF THE BID, BUT WHEN THAT AMOUNT IS DIVIDED BY 20 THE RESULT IS $294.75, THE AMOUNT ALLEGED BY THE BIDDER AS ITS INTENDED CORRECT UNIT PRICE. FURTHERMORE, THE OTHER BIDS SUBMITTED ON ITEM NO. 1 WERE CONSIDERABLY HIGHER.

IN THE CIRCUMSTANCES, IT IS OUR VIEW THAT THE CONTRACTING OFFICER SHOULD NOT HAVE ACCEPTED THE BID OF GAIENNIE WHOLESALE LUMBER, INC., WITHOUT FIRST REQUESTING VERIFICATION OF THE BID. NOT HAVING DONE SO, HIS ACCEPTANCE OF THE BID AND THE ISSUANCE OF PURCHASE ORDER NO. WA 61381-1 AT THE CORRECTED EXTENDED LOWER TOTAL PRICE BID DID NOT RESULT IN A LEGAL AND BINDING CONTRACT, WHICH WOULD IMPOSE ANY LIABILITY UPON THE CONTRACTOR. CONSEQUENTLY, WE FEEL THAT GAIENNIE WHOLESALE LUMBER, INC., SHOULD NOT HAVE BEEN CERTIFIED AS BEING INDEBTED TO THE UNITED STATES AND THE INDEBTEDNESS SHOULD BE CANCELED, AND FURTHER ACTION TO COLLECT THE $858.90 SHOULD BE DISCONTINUED.