B-125696, OCT. 7, 1955

B-125696, OCT. 7, 1955

TO COMMANDING OFFICER, NAVAL SUPPLY CENTER:

REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 1, 1955, WITH ENCLOSURES, RELATIVE TO THE ATTEMPTED WITHDRAWAL BY THE H. KRIEGER MACHINERY COMPANY, SAN FRANCISCO, CALIFORNIA, OF ITS BIDS ON CERTAIN ITEMS OF INVITATION NO. B-24-56, DATED JULY 22, 1955, WHICH INVITED BIDS ON MISCELLANEOUS ITEMS OF EQUIPMENT LOCATED AT THE NAVAL SUPPLY ANNEX, ROUGH AND READY ISLAND, STOCKTON, CALIFORNIA.

THE H. KRIEGER MACHINERY COMPANY QUOTED THE HIGHEST UNIT PRICES ON ITEMS 23, 24, AND 25 AND 28 OF THE INVITATION AND IN THE SPACES FOR STATING THE "TOTAL PRICE BID" ON EACH ITEM THE BIDDER EXTENDED SUCH PRICES SO AS TO AGREE WITH THE PRICES PER UNIT MULTIPLIED BY THE SPECIFIED NUMBER OF UNITS IN THE PARTICULAR ITEMS. FOR THE THREE UNITS OF EQUIPMENT AS DESCRIBED IN ITEM 23, THE BIDDER QUOTED A UNIT PRICE OF $89.10 AND ITS EXTENDED TOTAL PRICE WAS $267.30. THE SAME PRICES WERE SHOWN FOR ITEM 24 FOR THREE UNITS OF EQUIPMENT SIMILAR TO THAT DESCRIBED IN ITEM 23. ON ITEM 28 A UNIT PRICE OF $131.50 WAS QUOTED ON THE TWO SPECIFIED UNITS OF EQUIPMENT AND THE EXTENDED TOTAL PRICE WAS $263.

IN A LETTER DATED AUGUST 11, 1955, THE BIDDER REQUESTED THAT ITS BIDS ON ITEMS 23, 24 AND 28 BE WITHDRAWN BECAUSE THE PROPERTY WAS ADVERTISED IN SUCH A MANNER AS TO BE MISLEADING. THE BIDDER STATED THAT "WE WERE LED TO BELIEVE THAT THERE WERE THREE COMPLETE UNITS IN LOT 23 AND 24 AND TWO COMPLETE UNITS IN LOT 28 RATHER THAN ONE UNIT IN EACH, BROKEN DOWN INTO COMPONENT ITEMS.' IN THAT CONNECTION, THE GOVERNMENT HAD INDICATED THAT THE SPECIFIED UNIT UNDER BOTH ITEMS 23 AND 24 WOULD CONSIST OF A FAN, MOTOR AND CONTROLLER, AND THAT THE SPECIFIED UNIT ON ITEM 28 WOULD CONSIST OF A PUMP AND MOTOR.

THE CONTRACTING OFFICER HAS TAKEN THE POSITION THAT THE THREE ITEMS WERE ADVERTISED AS INDIVIDUAL COMPONENTS OF A SINGLE UNIT. HOWEVER, IT IS APPARENT THAT, IN DESCRIBING EACH OF THE THREE ITEMS AS TWO OR MORE PIECES OF EQUIPMENT "CONSISTING OF THE FOLLOWING," AND THEN SETTING FORTH A DETAILED DESCRIPTION OF THE COMPONENTS, THE GOVERNMENT MUST BE PRESUMED TO HAVE BEEN INTERESTED IN RECEIVING QUOTATIONS ONLY ON THE COMPLETE UNITS, AND NOT ON THE COMPONENT PARTS OF SUCH UNITS. MOREOVER, IT IS DIFFICULT TO PERCEIVE HOW ANY BIDDER COULD HAVE ASSUMED THAT PRICES ON THE COMPONENTS WERE BEING REQUESTED SINCE ONLY ONE UNIT PRICE WAS TO BE QUOTED UNDER EACH OF THE THREE ITEMS.

THE CONTRACTING OFFICER HAS ALSO INVITED ATTENTION TO THE FACT THAT THE BIDDER DID NOT INSPECT THE EQUIPMENT AND TO THE PROVISION IN THE INVITATION TO THE EFFECT THAT FAILURE TO INSPECT WOULD NOT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING. HOWEVER, BIDS ON ITEMS 23, 24 AND 28, WERE NOT INVITED ON A LOT PRICE BASIS. WHAT IS HERE INVOLVED IS THE FACT THAT THE BIDDER SUBMITTED A UNIT PRICE BID ON EACH ITEM AND ITS TOTAL PRICES REPRESENT NO MORE THAN A SIMPLE MATTER OF MULTIPLICATION OF SUCH UNIT PRICES BY THE SPECIFIED NUMBERS OF UNITS FOR EACH ITEM. AND, SINCE THE STATED NUMBERS OF COMPLETE UNITS WERE FROM ONE-HALF TO ONE-THIRD LESS THAN WHAT THE GOVERNMENT HAD AVAILABLE FOR SALE, THE GOVERNMENT COULD NOT INSIST UPON PERFORMANCE IN ACCORDANCE WITH THE BIDS AS SUBMITTED UNDER THE THREE ITEMS. SEE PARAGRAPH 20 OF THE GENERAL SALE TERMS AND CONDITIONS WHICH PROVIDES, IN PERTINENT PART, THAT "IF THE GOVERNMENT TENDERS, OR DELIVERS A QUANTITY LESS THAN THAT STATED IN THE INVITATION TO BID, THE PURCHASER AGREES TO ACCEPT THE QUANTITY TENDERED OR DELIVERED UNLESS THE VARIATION EXCEEDS 10 PERCENT OF THE QUANTITY STATED IN THE INVITATION TO BID.'

ACCORDINGLY, YOU ARE ADVISED THAT WE ARE OF THE OPINION THAT THE H. KRIEGER MACHINERY COMPANY SHOULD BE PERMITTED TO WITHDRAW ITS BIDS ON ITEMS 23, 24 AND 28 OF THE INVITATION.