B-130392, JAN. 31, 1957
Highlights
THE BID OF FOREMOST DAIRIES WAS SIGNIFICANTLY OUT OF LINE WITH THE OTHERS RECEIVED ON ITEM NOS. 148. ON WHICH BIDS WERE REQUESTED ON UNITS OF GALLONS FOR MILK PRODUCTS IN CONTAINERS OF SMALLER SIZES. FOREMOST ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT ITS BID WAS IN ERROR ON THE ABOVE ITEMS. THE CONTRACTING OFFICER WAS ADVISED ON DECEMBER 27. AWARD WAS MADE ON THE FOLLOWING DAY. THAT A MISTAKE WAS MADE AS ALLEGED AND THAT NOTICE OF THE MISTAKE WAS GIVEN PRIOR TO AWARD AND SATISFACTORILY EXPLAINED. THERE IS NO LEGAL AUTHORITY FOR PAYMENT OF ANY AMOUNT IN EXCESS OF THAT FOR WHICH THE ITEMS COULD HAVE BEEN OBTAINED FROM THE NEXT LOWEST BIDDER. PAYMENT TO FOREMOST IS AUTHORIZED FOR ITEMS ACTUALLY DELIVERED AT THE UNIT PRICES BID BY THE NEXT LOWEST BIDDER.
B-130392, JAN. 31, 1957
TO HONORABLE H. V. HIGLEY, ADMINISTRATOR, VETERANS ADMINISTRATION:
YOUR LETTER OF JANUARY 17, 1957, REQUESTS OUR DECISION AS TO WHETHER THE FOREMOST DAIRIES, NC., DETROIT, MICHIGAN, MAY BE RELIEVED FROM A CONTRACT AWARDED PURSUANT TO INVITATION FOR BIDS NO. 57-81 BY THE VETERANS ADMINISTRATION HOSPITAL AT DEERBORN, MICHIGAN, UNDER THE CIRCUMSTANCES DESCRIBED BELOW.
THE INVITATION, ISSUED NOVEMBER 20, 1956, REQUESTED BIDS FOR MILK AND MILK PRODUCTS TO MEET THE ESTIMATED REQUIREMENTS OF THE HOSPITAL FOR THE PERIOD JANUARY 1, 1957, THROUGH JUNE 30, 1957. THE BID OF FOREMOST DAIRIES WAS SIGNIFICANTLY OUT OF LINE WITH THE OTHERS RECEIVED ON ITEM NOS. 148, 150 AND 155, 155C AND 156, ON WHICH BIDS WERE REQUESTED ON UNITS OF GALLONS FOR MILK PRODUCTS IN CONTAINERS OF SMALLER SIZES. AFTER OPENING AND BEFORE AWARD, FOREMOST ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT ITS BID WAS IN ERROR ON THE ABOVE ITEMS, DUE TO CONFUSION ARISING BETWEEN THE UNITS USED IN THE DESCRIPTION OF THE ITEMS AND THE GALLON UNITS DESIGNATED UNDER THE ,UNIT" COLUMN OF THE INVITATION, WHICH RESULTED IN THE QUOTING OF PRICES PER CONTAINER INSTEAD OF PER GALLON. LETTER OF DECEMBER 13, 1956, FOREMOST SUBMITTED THEIR INTENDED PRICES. NOTWITHSTANDING THE ALLEGED ERROR AND BECAUSE OF THE LIMITED TIME AVAILABLE FOR AWARD, THE CONTRACTING OFFICER WAS ADVISED ON DECEMBER 27, 1956, TO MAKE THE AWARD TO FOREMOST. AWARD WAS MADE ON THE FOLLOWING DAY.
THERE APPEARS TO BE NO DOUBT ON THE BASIS OF THE DISCREPANCIES IN THE PRICES BID ON THE ITEMS INDICATED, THAT A MISTAKE WAS MADE AS ALLEGED AND THAT NOTICE OF THE MISTAKE WAS GIVEN PRIOR TO AWARD AND SATISFACTORILY EXPLAINED. IT MAY NOT BE CONCLUDED, THEREFORE, THAT THE ISSUANCE OF THE AWARD CONSUMMATED A VALID AND BINDING CONTRACT WHICH REQUIRED FOREMOST TO FURNISH THE ITEMS FOR THE AMOUNT SPECIFIED IN THE BID. ON THE OTHER HAND, THERE IS NO LEGAL AUTHORITY FOR PAYMENT OF ANY AMOUNT IN EXCESS OF THAT FOR WHICH THE ITEMS COULD HAVE BEEN OBTAINED FROM THE NEXT LOWEST BIDDER, THE DETROIT CREAMERY.
ACCORDINGLY, PAYMENT TO FOREMOST IS AUTHORIZED FOR ITEMS ACTUALLY DELIVERED AT THE UNIT PRICES BID BY THE NEXT LOWEST BIDDER. FURTHER, SINCE, AS INDICATED ABOVE, NO BINDING CONTRACT WAS EFFECTED, FOREMOST CANNOT BE REQUIRED TO CARRY OUT THE UNCOMPLETED TERM OF THE CONTRACT, WHICH MAY THEREFORE BE CANCELED. REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT INVOLVED AND VOUCHER PAYMENTS ACCOMPLISHED.
YOUR LETTER STATES THAT BECAUSE OF THE LIMITED TIME AVAILABLE, THE CONTRACTING OFFICER WAS ADVISED ON DECEMBER 27 TO MAKE THE AWARD TO FOREMOST. WE NOTE THAT THE ERROR WAS ALLEGED ON DECEMBER 13. HAD THE MATTER BEEN SUBMITTED DIRECTLY TO OUR OFFICE BY THE CONTRACTING OFFICER AT THAT TIME, AS AUTHORIZED IN 16 COMP. GEN. 565, 567, WE COULD HAVE INFORMED THE CONTRACTING OFFICER AS TO THE CORRECT ACTION TO BE TAKEN PRIOR TO JANUARY 1, 1957, SO THAT THE PRESENT SITUATION COULD HAVE BEEN AVOIDED. IF SUCH PROCEDURE WOULD NOT BE UNDESIRABLE FOR ADMINISTRATIVE REASONS, WE SUGGEST THAT CONSIDERATION BE GIVEN TO ITS ADOPTION FOR SUBMISSIONS OF THIS KIND.