B-124627, JUL. 21, 1955

B-124627, JUL. 21, 1955

TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JULY 12, 1955, WITH ENCLOSURES, FROM THE ACTING CHIEF PURCHASING AGENT, VETERANS ADMINISTRATION, RELATIVE TO AN ERROR ALLEGED BY BEATRICE FOODS CO. TO HAVE BEEN MADE ON ITEM NO. 162 GROUP II OF ITS BID DATED JUNE 8, 1955. A DECISION IS REQUESTED AS TO WHETHER THE BID MAY BE CORRECTED.

IN RESPONSE TO INVITATION NO. 56-15 FOR BIDS FOR FURNISHING VARIOUS ITEMS OF DAIRY PRODUCTS TO THE VETERANS ADMINISTRATION HOSPITAL AT JEFFERSON BARRACKS 23, MISSOURI, THE COMPANY OFFERED TO FURNISH DURING A SIX-MONTH PERIOD BEGINNING JULY 1 AND ENDING DECEMBER 31, 1955, 550 GALLONS OF ICE CREAM MIX (10 PERCENT BUTTERFAT), AT THE PRICE OF $0.85 PER GALLON AND ALSO OFFERED TO FURNISH, AT THE SAME PRICE PER GALLON, 1,200 GALLONS OF THE SAME PRODUCT DURING THE PERIOD OF ONE YEAR ENDING JUNE 30, 1956. THERE WAS RECEIVED ONLY ONE OTHER BID OF $1.45 PER GALLON FOR THE QUANTITY TO BE DELIVERED IN THE SAME SIX-MONTH PERIOD, AND $1.40 PER GALLON FOR THE 1,200 GALLONS TO BE DELIVERED DURING THE ONE-YEAR PERIOD.

THE VARIANCE IN THE BIDS APPARENTLY PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID SINCE THE MANAGER OF THE HOSPITAL, IN A LETTER DATED JUNE 29, 1955, STATES THAT THE COMPANY WAS REQUESTED TO VERIFY ITS BID. BY LETTER OF JUNE 24, 1955, CONFIRMING TELEPHONE CONVERSATION OF THE PREVIOUS DAY, THE COMPANY ADVISED THAT IT HAD MADE AN ERROR IN ITS BID IN THAT THE PRICE IT QUOTED IS ITS PRICE FOR FOUR PERCENT MIX INSTEAD OF THAT OF THE TEN PERCENT MIX REQUIRED AND THAT ITS INTENDED BID PRICE FOR THE TEN PERCENT MIX IS $1.20 PER GALLON. FURNISHED IN ITS LETTER A COMPLETE BREAKDOWN OF THE COSTS PER GALLON, INCLUDING THE RAW INGREDIENTS, AS OF JUNE 1, 1955, FOR THE TWO MIXES ON WHICH THE PRICES OF $0.85 AND $1.20 PER GALLON FOR THE FOUR PERCENT MIX AND THE TEN PERCENT MIX, RESPECTIVELY, ARE BASED.

THERE APPEARS LITTLE, IF ANY, ROOM FOR DOUBT THAT THE COMPANY MADE AN ERROR IN ITS BID AND THAT ITS INTENDED BID FOR THE PRODUCT CALLED FOR ACTUALLY WAS $1.20 PER GALLON, SINCE THE CONTRACTING OFFICER STATES THAT SUCH A PRICE IS REASONABLE AND CONSONANT WITH THE PRICE CHARGED THEREFOR TO THE GENERAL PUBLIC.

ACCORDINGLY, SINCE IT WAS BELIEVED THAT THE BID WAS ERRONEOUS AND SINCE SUCH BELIEF WAS CONFIRMED AND THE ERROR SATISFACTORILY EXPLAINED BY THE BIDDER PRIOR TO AWARD, THE BID OF BEATRICE FOODS CO. MAY BE CORRECTED SO AS TO PROVIDE FOR A UNIT PRICE OF $1.20 PER GALLON FOR THE ICE CREAM MIX UNDER ITEM NO. 162 GROUP II--- SUCH PRICE STILL BEING SUBSTANTIALLY LESS THAN THE ONLY OTHER BID RECEIVED--- AND THE BID, AS CORRECTED, MAY BE CONSIDERED ALONG WITH THE OTHER BID IN MAKING THE AWARD.

IN THE EVENT OF AN AWARD TO THE BEATRICE FOODS CO., A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT.

THE PAPERS FROM THE HOSPITAL MANAGER TO THE CHIEF MEDICAL DIRECTOR ARE RETURNED.