B-110712, DEC 17, 1952

B-110712, DEC 17, 1952

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 6, 1952, FROM THE DIRECTOR OF FINANCE RELATIVE TO AN ERROR ALLEGED BY THE M. A. BELL COMPANY TO HAVE BEEN MADE IN ITS BID OF JUNE 16, 1952, ON WHICH PURCHASE ORDER NO. 52- 30604 SP, DATED JUNE 24, 1952, WAS ISSUED.

IN RESPONSE TO A TELEGRAPHIC REQUEST OF JUNE 16, 1952, FROM THE PROCUREMENT OFFICE, KELLY AIR FORCE BASE, TEXAS, THE M. A. BELL COMPANY SUBMITTED A TELEGRAPHIC BID IN WHICH IT OFFERED TO FURNISH 700 POUNDS OF FLUX-ALUMINUM, IN 100-POUND BAGS, AT A PRICE OF $71.59 PER NET TON. THE QUOTATION WAS CONFIRMED BY LETTER JUNE 17, 1952. THE PURCHASE ORDER OF JUNE 24, 1952, WAS ISSUED TO THE COMPANY FOR 2,000 POUNDS AT ITS BID PRICE.

UPON RECEIPT OF THE PURCHASE ORDER, THE COMPANY, BY TELEGRAM DATED JUNE 30, 1952, ADVISED THAT ITS QUOTATION OF JUNE 16, 1952, WAS SUBMITTED IN ERROR AND THAT THE CORRECT PRICE WAS $26.38 PER HUNDREDWEIGHT. ADVICE WAS REQUESTED AS TO WHETHER THE QUANTITY ORDERED COULD BE FURNISHED AT THE REVISED PRICE. THE CONTRACTOR WAS ADVISED BY LETTER OF JUNE 30, 1952, THAT THE CONTRACTING OFFICER WAS WITHOUT AUTHORITY TO INCREASE THE CONTRACT PRICE.

BY AN AIRMAIL LETTER DATED AUGUST 19, 1952, THE CONTRACTOR WAS ADVISED AS FOLLOWS:

"IT IS REQUESTED SHIPMENT OF 2000 POUNDS FLUX-ALUMINUM, PURCHASE ORDER 52 -30604-SP BE MADE IN ACCORDANCE WITH TERMS OF PURCHASE ORDER, AS DELIVERY IS PAST DUE AND MATERIAL IS URGENTLY REQUIRED FOR WORK STOPPAGE.

"PAYMENT WILL BE MADE IN ACCORDANCE WITH TERMS OF PURCHASE ORDER, AND IN THE EVENT CLAIM IS APPROVED, SUPPLEMENTAL PAYMENT WILL BE MADE."

IN A LETTER DATED AUGUST 20, 1952, THE CONTRACTOR STATED, IN PERTINENT PART, AS FOLLOWS:

"YOUR LETTER OF THE 19TH APPEALS TO US TO MAKE SHIPMENT, AS YOU ARE URGENTLY IN NEED OF THIS PRODUCT. INASMUCH AS WE QUOTED, AT YOUR REQUEST, ONLY ON 700 POUNDS, WE FEEL NO COMPULSION TO SHIP YOU 2,000 POUNDS AT THE INCORRECT PRICE. INASMUCH AS THE ERROR WAS OURS ON THE QUOTATION, WE WILL SHIP YOU 700 POUNDS AT THE PRICE QUOTED WITH THE UNDERSTANDING THAT WE ARE MAKING A CLAIM FOR THE DIFFERENCE. IF AN ADDITIONAL AMOUNT IS REQUIRED, WE DESIRE TO PRESENT A NEW QUOTATION."

THE COMPANY WAS ADVISED BY TELETYPE TO PROCEED WITH THE PROPOSED SHIPMENT OF 700 POUNDS WITH THE UNDERSTANDING THAT THE PURCHASE ORDER WOULD BE AMENDED TO REDUCE THE QUANTITY CALLED FOR THEREUNDER. PURSUANT TO THE LATTER ADVICE, CHANGE ORDER NO. 1, DATED SEPTEMBER 10, 1952, WAS ISSUED, BY WHICH THE QUANTITY SPECIFIED IN THE CONTRACT AND THE CONTRACT PRICE WERE REDUCED TO 700 POUNDS AND $25.06, RESPECTIVELY.

THE CONTRACTING OFFICER, IN SECOND INDORSEMENT DATED OCTOBER 9, 1952, STATED, IN PERTINENT PART, AS FOLLOWS:

"3. UPON RECEIPT OF BIDS A WIDE DIFFERENCE IN PRICE WAS NOTED, HOWEVER, IT WAS ASSUMED THAT DIFFERENCE WAS DUE TO CLAIMANT BIDDING BY THE TON, (2,000 POUNDS)."

CONSIDERING THE TYPE OF MATERIAL INVOLVED, THE DISCREPANCY BETWEEN THE COMPANY'S BID OF $3.5795 PER HUNDREDWEIGHT, AND THE ONLY OTHER BID OF $18.15 PER HUNDREDWEIGHT, APPEARS SUCH THAT THE COMPANY SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRICE PRIOR TO THE ACCEPTANCE THEREOF. CONSEQUENTLY, THE ACCEPTANCE OF THE BID DID NOT OBLIGATE THE COMPANY TO FURNISH THE FLUX-ALUMINUM AT ITS BID PRICE.

ACCORDINGLY, IT APPEARING THAT THE CONTRACT PRICE PREVIOUSLY HAS BEEN PAID, PAYMENT IS AUTHORIZED TO BE MADE TO THE M. A. BELL COMPANY OF AN ADDITIONAL AMOUNT EQUAL TO THE DIFFERENCE BETWEEN $3.5795 PER HUNDREDWEIGHT AND THE NEXT LOWEST BID PRICE OF $18.15 PER HUNDREDWEIGHT, OR $101.99, AS RECOMMENDED BY THE CONTRACTING OFFICER, FOR THE FLUX- ALUMINUM DELIVERED.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.

THE PAPERS, WITH THE EXCEPTION OF THE REFERRED-TO SECOND INDORSEMENT OF THE CONTRACTING OFFICER DATED OCTOBER 9, 1952, ARE RETURNED HEREWITH.