B-124953, AUG. 24, 1955

B-124953, AUG. 24, 1955

TO SECRETARY OF THE ARMY:

REFERENCE IS MADE TO FOURTH INDORSEMENT DATED JUNE 30, 1955, WITH ENCLOSURES, FROM THE CHIEF OF FINANCE--- FILE REFERENCE FINEY 167/8 JUN 55 ELECTRONIC INDUSTRIAL SALES, INC. CE-Z 159379/18/-HGR-4--- FURNISHING THE REPORT REQUESTED IN OFFICE LETTER OF JUNE 8, 1955, CONCERNING AN ERROR WHICH THE ELECTRONIC INDUSTRIAL SALES, INC., 2345 SHERMAN AVENUE, N.W., WASHINGTON 1, C., ALLEGES IT MADE IN ITS QUOTATION OF MARCH 25, 1955, ON WHICH PURCHASE ORDER 5395-PH-55 92/2876) DATED APRIL 6, 1955, WAS BASED.

THE SIGNAL CORPS SUPPLY AGENCY, FORT MONMOUTH, NEW JERSEY, UNDER PROCUREMENT DIRECTIVE 49/5-SF-2876, SOLICITED QUOTATIONS FROM THREE FIRMS FOR FURNISHING 500 TERMINAL STUDS, IN ACCORDANCE WITH SPECIFICATIONS, TO BE DELIVERED BY MAY 2, 1955. IN RESPONSE THERETO ELECTRONIC INDUSTRIAL SALES, INC., QUOTED A PRICE OF $4.50 PER HUNDRED. AWARD WAS MADE AND PURCHASE ORDER ISSUED TO THE COMPANY AS LOW BIDDER AT THAT PRICE. THE TWO OTHER BIDS RECEIVED WERE $8.47 AND $14 PER HUNDRED, RESPECTIVELY.

BY LETTER DATED APRIL 13, 1955, THE CORPORATION ADVISED THAT IT HAD MADE AN ERROR IN ITS QUOTATION DUE TO THE ILLEGIBILITY OF THE HANDWRITING ON THE ORIGINAL NOTATION OF PRICE MADE ON THE REQUEST FORM, AND THAT THE QUOTATION SHOULD HAVE BEEN $11.40 PER HUNDRED RATHER THAN $4.40 PER HUNDRED. IN SUPPORT OF ITS ALLEGATION OF ERROR THE CORPORATION BY LETTER OF APRIL 28, 1955, SUBMITTED PHOTOSTATIC COPIES OF ITS WORKSHEET AND THE QUOTATION FROM THE MANUFACTURER OF THE MATERIAL INDICATING THEIR COST OF MATERIAL TO BE $8.47 PER HUNDRED. THE COMPANY IN ITS LETTER OF APRIL 13, 1955, REQUESTED THAT ITS BID BE CORRECTED TO SHOW THE INTENDED PRICE OF $11.40 PER HUNDRED. BY LETTER DATED APRIL 18, 1955, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE WAS WITHOUT AUTHORITY TO AMEND THE ORDER BY A PRICE INCREASE INASMUCH AS THE CONTRACT WAS AWARDED ON A FIRM QUOTATION AND BY COMPETITION WITH OTHER BIDDERS. THE CONTRACTING OFFICER ALSO REPORTS THAT THERE WAS NO REASON TO NOTICE OR SUSPECT THAT THERE WAS AN ERROR IN THE BID PRIOR TO AWARD.

THE ABSTRACT OF BIDS IN THE INSTANT CASE SHOWS A WIDE VARIANCE IN THE PRICES QUOTED BY THE OTHER TWO BIDDERS SINCE THE BID PRICE OF THE SUBJECT CONTRACTOR IN THE AMOUNT OF $4.40 PER HUNDRED WAS APPROXIMATELY HALF THAT OF THE NEXT LOW BID OF $8.47 PER HUNDRED, AND ONE-THIRD THAT OF THE OTHER BID RECEIVED OF $14 PER HUNDRED. THE EVIDENCE, INCLUDING THE PHOTOSTATIC COPIES OF THE WORKSHEET AND ITS SUPPLIER'S INVOICE FURNISHED BY THE CONTRACTOR, APPEARS TO ESTABLISH SATISFACTORILY THAT A BONA FIDE ERROR WAS MADE IN THE BID, AS ALLEGED. IN VIEW OF THE VARIANCE BETWEEN THE PRICES QUOTED, AND ESPECIALLY OF THE FACT THAT THE MANUFACTURER OF THE REQUIRED ITEM BID $8.47 PER HUNDRED, IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID AND THAT, THEREFORE, THE CORPORATION SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO VERIFY ITS BID BEFORE IT WAS ACCEPTED. IN THE CIRCUMSTANCES, IT WOULD BE INEQUITABLE TO REQUIRE THE CONTRACTOR TO FURNISH THE STUDS AT ITS BID PRICE, AND THE PURCHASE ORDER MAY BE CANCELED WITHOUT LIABILITY; OR, IF DELIVERY HAS BEEN MADE, THE CONTRACTOR MAY BE PAID THE PRICE QUOTED BY THE NEXT LOWEST BIDDER.