B-165273, JAN. 15, 1969

B-165273: Jan 15, 1969

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TO SHER AND HARRIS: REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 16. RELIEF FROM THE EXCESS COSTS OF REPROCUREMENT WHICH WERE INCURRED BECAUSE OF CCI'S FAILURE TO PERFORM AT ITS BID PRICE UNDER INVITATION FOR BIDS (IFB) NO. 99056. THE BIDS WERE OPENED ON MARCH 7. WAS LOW BIDDER ON EACH OF THESE ITEMS. A CONTRACT WAS AWARDED TO CCI FOR ITEMS 1 - 5. IT AT THE SAME TIME REFUSED TO START PRODUCTION OR HONOR PURCHASE ORDERS UNDER THE CONTRACT UNLESS THE SHEETS WERE ELIMINATED OR THE PRICES ON ITEMS 1A THROUGH 1M WERE INCREASED BY $2.70 PER UNIT. 689.84 WERE ASSESSED AGAINST CCI BY THE CONTRACTING OFFICER ON APRIL 11. ALTHOUGH THE GSA PROCUREMENT AGENT WAS OF THE OPINION THAT THE CONTRACTING OFFICER ERRED IN FAILING TO SEEK ADDITIONAL VERIFICATION AND THEREFORE RECOMMENDED THAT CCI'S REQUEST FOR RELIEF FROM THE EXCESS COSTS OF REPROCUREMENT BE REFERRED TO THIS OFFICE FOR DETERMINATION (SEE FPR 1- 2.406-4 (I) (.

B-165273, JAN. 15, 1969

TO SHER AND HARRIS:

REFERENCE IS MADE TO YOUR LETTERS OF SEPTEMBER 16, 1968, WITH ENCLOSURES, OCTOBER 29, 1968, AND DECEMBER 20, 1968, REQUESTING ON BEHALF OF CALIFORNIA CAMPING INDUSTRIES, INC. (CCI), GARDENA, CALIFORNIA, RELIEF FROM THE EXCESS COSTS OF REPROCUREMENT WHICH WERE INCURRED BECAUSE OF CCI'S FAILURE TO PERFORM AT ITS BID PRICE UNDER INVITATION FOR BIDS (IFB) NO. 99056, ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA), DENVER, COLORADO, UNDER DATE OF FEBRUARY 9, 1967.

UNDER THE CITED INVITATION GSA REQUESTED BIDS ON TEN FOREST SERVICE ITEMS. THE BIDS WERE OPENED ON MARCH 7, 1967, AND CCI, WHICH HAD BID ONLY ON ITEMS 1 - 5, WAS LOW BIDDER ON EACH OF THESE ITEMS. ON APRIL 4, 1967, THE GSA PROCUREMENT AGENT TELEPHONICALLY REQUESTED CONFIRMATION OF THE BID PRICES AND ON APRIL 11, 1967, GSA RECEIVED A TELEGRAM FROM THE COMPANY VERIFYING ITS PRICES. ON APRIL 20, 1967, A CONTRACT WAS AWARDED TO CCI FOR ITEMS 1 - 5.

ITEMS 1A-1M OF THE IFB COVERED FABRIC SLEEPING BAGS, DELIVERED TO VARIOUS DESTINATIONS, WITH EACH BAG ACCORDING TO THE SPECIFICATIONS TO CONSIST OF AN "OUTER SHELL, BASIC LINER AND SHEET.' CCI BY LETTER OF MAY 18, 1967, ALLEGED THAT IT HAD FAILED TO INCLUDE THE COST OF THE SHEET IN ITS BID ON THESE ITEMS. CCI'S BID, THE ONLY OTHER BIDDER AND THE GOVERNMENT'S PREVIOUS CONTRACT PRICES FOR ITEMS 1A-1M, AVERAGED $19.04, $25.85 AND $24.63, RESPECTIVELY.

ALTHOUGH CCI BY LETTER ON JUNE 30, 1967, SUBMITTED EVIDENCE TO GSA IN SUPPORT OF THE ALLEGED MISTAKE, IT AT THE SAME TIME REFUSED TO START PRODUCTION OR HONOR PURCHASE ORDERS UNDER THE CONTRACT UNLESS THE SHEETS WERE ELIMINATED OR THE PRICES ON ITEMS 1A THROUGH 1M WERE INCREASED BY $2.70 PER UNIT. THE PROCURING ACTIVITY DETERMINED THIS TO BE NOTICE OF AN ANTICIPATORY BREACH OF CONTRACT AND ON AUGUST 9, 1967, TERMINATED THE CONTRACT FOR DEFAULT. EXCESS COSTS ON REPROCUREMENT OF $17,689.84 WERE ASSESSED AGAINST CCI BY THE CONTRACTING OFFICER ON APRIL 11, 1968.

ALTHOUGH THE GSA PROCUREMENT AGENT WAS OF THE OPINION THAT THE CONTRACTING OFFICER ERRED IN FAILING TO SEEK ADDITIONAL VERIFICATION AND THEREFORE RECOMMENDED THAT CCI'S REQUEST FOR RELIEF FROM THE EXCESS COSTS OF REPROCUREMENT BE REFERRED TO THIS OFFICE FOR DETERMINATION (SEE FPR 1- 2.406-4 (I) (, THE GSA ASSISTANT GENERAL COUNSEL ON SEPTEMBER 26, 1967, BY AUTHORITY OF FPR 1-2.406-4 (E), DISAPPROVED CCI'S REQUEST FOR RELIEF.

IT IS YOUR CONTENTION THAT THE CONTRACTING OFFICER'S VERIFICATION REQUEST WAS NOT SUFFICIENT TO PUT CCI ON NOTICE THAT IT SHOULD RECHECK ITS BID AND THAT, NOTWITHSTANDING CONFIRMATION BY CCI, THE DISPARITY IN BIDS WAS SO GREAT THAT FURTHER VERIFICATION WAS REQUIRED.

SECTION 1-2.406-3 (D) (1) OF THE FEDERAL PROCUREMENT REGULATIONS (FPR) PROVIDES THAT WHENEVER THE CONTRACTING OFFICER SUSPECTS A MISTAKE IN BID, HE SHOULD IMMEDIATELY REQUEST VERIFICATION OF THE BID, SPECIFICALLY INFORMING "THE BIDDER WHY THE REQUEST FOR VERIFICATION IS MADE - THAT A MISTAKE IS SUSPECTED AND THE BASIS FOR SUCH SUSPICION, E.G., THAT THE BID IS SIGNIFICANTLY OUT OF LINE WITH THE NEXT LOW OR OTHER BIDS OR WITH THE GOVERNMENT'S ESTIMATE.'

ACCORDING TO YOUR LETTER OF SEPTEMBER 16, 1968, THE PRESIDENT OF CCI AGREES THAT THE GSA PROCUREMENT AGENT INFORMED HIM IN TELEPHONICALLY REQUESTING VERIFICATION "THAT HIS BID APPEARED CONSIDERABLY LOWER THAN OTHER BIDDERS.' ALTHOUGH CCI WAS NOT SPECIFICALLY INFORMED THAT A MISTAKE IN PRICE WAS SUSPECTED, THE COMPANY SHOULD HAVE KNOWN THAT THE ABOVE STATEMENT COMBINED WITH THE REQUEST FOR CONFIRMATION OF BID PRICES HAD A DIRECT RELATIONSHIP TO THE GOVERNMENT'S SUSPICION OF POSSIBLE ERRORS IN THE BID PRICES. A VERIFICATION REQUEST REQUIRES NO SPECIAL LANGUAGE (SEE B-163082, 47 COMP. GEN. ---, MAY 3, 1968) AND IN OUR OPINION THE REQUEST FOR VERIFICATION IN THIS CASE SUBSTANTIALLY COMPLIED WITH THE CITED PARAGRAPH OF THE FPR AS WELL AS THE PREVIOUS DECISIONS OF THIS OFFICE. 37 COMP. GEN. 786, 788, WE STATED THE FOLLOWING CONCERNING A NEARLY IDENTICAL VERIFICATION REQUEST:"THE RECORD ESTABLISHES THAT THE GOVERNMENT DID ALL THAT WAS REQUIRED OF IT TO ASCERTAIN THE CORRECTNESS OF FORWAY'S BID; IN FACT, FORWAY WAS SPECIFICALLY ADVISED THAT ITS BID WAS CONSIDERABLY LOWER THAN THE NEXT BID. IT WAS NOT UNTIL AFTER FORWAY UNEQUIVOCALLY CONFIRMED ITS BID THAT THE CONTRACTING OFFICER CONSIDERED IT CORRECT AND PROPER FOR AWARD. HAD THE CONTRACTING OFFICER THEREAFTER NOT AWARDED THE CONTRACT TO FORWAY AS THE LOWEST RESPONSIBLE BIDDER, HE WOULD HAVE BEEN DERELICT OF HIS DUTY TO THE GOVERNMENT. SEE CARNEGIE STEEL COMPANY V CONNELLY, 97 A. 774; SHRIMPTON MFG. COMPANY V BRIN, 125 S.W. 942; ALABAMA SHIRT AND TROUSER COMPANY V UNITED STATES, 121 C.CLS. 313. MOREOVER, THE FACTS OF RECORD PRECLUDE ANY ASSUMPTION OF BAD FAITH OR ARBITRARY ACTION ON THE PART OF THE CONTRACTING OFFICER. 27 COMP. GEN. 17.'

THE CASES YOU HAVE CITED ARE DISTINGUISHABLE IN THAT IN B-163731, SEPTEMBER 30, 1968, AND B-165090, SEPTEMBER 10, 1968, THERE WAS NO REQUEST FOR VERIFICATION. IN 44 COMP. GEN. 383 (1965), B-149282, AUGUST 7, 1962, AND B-137494, OCTOBER 23, 1958, THERE WAS ONLY A PERFUNCTORY OR PRO FORMA REQUEST FOR VERIFICATION. B-165519, NOVEMBER 13, 1968, IS DISTINGUISHABLE, SINCE IN THAT CASE THE BIDDER DID ALLEGE ERROR FOUR DAYS AFTER BID OPENING, AND SUCH ALLEGATION WOULD APPARENTLY HAVE BEEN TIMELY AND REQUIRED CORRECTION OF THE BID PRICE HAD THERE NOT BEEN AN URGENT NEED FOR THE CONTRACTOR'S SERVICES, AS EVIDENCED BY THE CONTRACTING OFFICER'S ORAL REQUEST FOR VERIFICATION AT BID OPENING, BY HIS AWARD ACTION IMMEDIATELY UPON RECEIPT OF THE BIDDER'S VERIFICATION THE SECOND DAY FOLLOWING BID OPENING, AND BY HIS ACTION TWO DAYS LATER, AND WITH NOTICE OF THE ALLEGED ERROR, IN URGING THE BIDDER TO EXECUTE THE FORMAL CONTRACT AND COMMENCE PERFORMANCE PRIOR TO RESOLUTION OF THE MERITS OF THE BIDDER'S ALLEGATION OF ERROR.

IN REGARD TO YOUR SECOND CONTENTION, IT IS OUR POSITION THAT THE GSA PROCUREMENT AGENT WAS UNDER NO DUTY TO SEEK FURTHER VERIFICATION. ALTHOUGH THE SECOND LOWEST BID (TAPATCO-S) AND THE GOVERNMENT'S PREVIOUS CONTRACT PRICES (1966-1967) FOR ITEMS 1A-1M WERE 36 PERCENT AND 29 PERCENT HIGHER THAN CCI'S BID, RESPECTIVELY, TAPATCO WAS THE ONLY BIDDER ON THE PROCUREMENT FOR THE PREVIOUS YEARS, SO THAT THE VALIDITY OF THE SECOND LOWEST BID AND THE PREVIOUS CONTRACT PRICES AS A PROPER BAROMETER OF CCI'S BID IS QUESTIONABLE. IT WOULD BE JUST AS REASONABLE TO ASSUME THAT TAPATCO'S PRESENT BID AND PREVIOUS PRICES WERE UNDULY HIGH AS TO ASSUME THAT CCI'S BID WAS UNDULY LOW. THIS FACTOR, COMBINED WITH CCI'S UNEQUIVOCAL VERIFICATION OF ITS BID WITH KNOWLEDGE THAT ITS PRICES WERE CONSIDERABLY LOWER THAN THE OTHER BIDDERS, RELIEVED THE PROCURING ACTIVITY OF ANY OBLIGATION TO SEEK FURTHER VERIFICATION.

ACCORDINGLY, ON THE PRESENT RECORD, WE MUST CONCLUDE THAT NO LEGAL BASIS EXISTS FOR RELIEF FROM THE EXCESS COSTS OF REPROCUREMENT.

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