B-130407, FEBRUARY 7, 1957, 36 COMP. GEN. 585

B-130407, FEBRUARY 7, 1957, 36 COMP. GEN. 585

CONTRACTS - MISTAKES - PRICE ADJUSTMENT - PRICE PRORATED ON BASIS OF SMALLER QUANTITY A PRICE ADJUSTMENT DUE A CONTRACTOR WHOSE BID, BASED ON A FOUR-OUNCE PACKAGE RATHER THAN A SIX-OUNCE PACKAGE AS SPECIFIED IN THE INVITATION, WAS ACCEPTED WITHOUT VERIFICATION, EVEN THOUGH IT WAS FAR OUTSIDE THE RANGE OF OTHER BIDS, IS LIMITED TO THE DIFFERENCE BETWEEN THE LOW BID PRORATED ON THE BASIS OF A FOUR-OUNCE PACKAGE AND THE NEXT LOW BID PRORATED ON THE SAME BASIS, NOTWITHSTANDING THAT THE GOVERNMENT SOLD THE PRODUCT AT THE HIGHER ORIGINAL BID PRICE.

TO THE SECRETARY OF THE ARMY, FEBRUARY 7, 1957:

REFERENCE IS MADE TO LETTER DATED JANUARY 17, 1957, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY ( LOGISTICS), WHO REQUESTS A DECISION REGARDING AN ERROR CUDAHY BROTHERS COMPANY, CUDAHY, WISCONSIN, ALLEGES IT MADE IN ITS BID.

INVITATION MA 30-145-57-4, DATED JULY 6, 1956, SOLICITED BIDS FOR 25 DIFFERENT COLD CUT ITEMS IN 6-OUNCE PACKAGES AND REQUESTED THAT THE BIDDER SHOULD INDICATE IF THE PACKAGE OFFERED WAS OTHER THAN 6 OUNCES. ON ITEM 3, COOKED HAM, THE AWARD WAS MADE TO THE LOWEST BIDDER, CUDAHY BROTHERS COMPANY, WHO HAD BID ?34 PER PACKAGE. THE BIDS PER PACKAGE OF THE FIVE OTHER BIDDERS WERE ?46, .48, ?51, ?573 AND ?60. BY LETTER DATED AUGUST 16, 1956, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT CONTRARY TO THE TERMS OF THE INVITATION AND THE BID IT HAD BEEN DELIVERING 4-OUNCE, INSTEAD OF 6-OUNCE, PACKAGES, AND THAT WHILE THE PACKAGES WERE ACCEPTABLE AN ADJUSTMENT IN PRICE WOULD BE MADE. BY LETTER DATED AUGUST 23, 1956, THE CONTRACTOR ALLEGED ERROR IN THAT IT INTENDED TO BID ON 4-OUNCE PACKAGES AS THAT WAS THE ONLY SIZE IT ALLEGEDLY PRODUCED. FURTHER, IT WAS ALLEGED THAT THE LARGE DISCREPANCY IN PRICE BETWEEN THE LOW BID AND THE NEXT LOWEST AND THE RISING TREND OF THE HAM MARKET SHOULD HAVE INDICATED THAT THE BID ON A 6-OUNCE PACKAGE WAS NOT INTENDED. ALSO IN ITS LETTER DATED NOVEMBER 5, 1956, THE CONTRACTOR STATED THAT IT NEVER MANUFACTURED NOR CONTEMPLATED THE MANUFACTURE OF A 6-OUNCE PACKAGE. THE CONTRACTOR EXPLAINED THE ERROR BY THE FACT THAT ALL THE OTHER ITEMS ON WHICH IT BID ARE PREPARED IN 6 OUNCE PACKAGES AND INADVERTENTLY THAT SIZE WAS QUOTED FOR THE COOKED HAM. ENCLOSED WITH THE THE LETTER WAS THE CONTRACTOR'S "SLICED LUNCHEON MEAT SPECIALTIES" PRICE SHEET WHICH LISTS COOKED HAM IN 4 OUNCE PACKAGES ONLY. IN THE CONTRACTING OFFICER'S FINDINGS, DATED NOVEMBER 14, 1956, IT IS STATED THAT 996 4-OUNCE PACKAGES OF COOKED HAM WERE RECEIVED AND SOLD TO COMMISSARY PATRONS AT ?34 PER PACKAGE.

THE CONTRACTOR'S BID WAS FAR OUTSIDE THE RANGE OF THE OTHER PRICES QUOTED. IN THESE CIRCUMSTANCES, THE ACCEPTANCE OF THE BID SHOULD NOT HAVE BEEN MADE WITHOUT REQUESTING VERIFICATION AND THE CONTRACTOR IS ENTITLED TO PAYMENT OF ITS CLAIM. HOWEVER, THERE IS NO LEGAL AUTHORITY FOR PAYMENT OF ANY AMOUNT IN EXCESS OF THE NEXT LOW BID.

ACCORDINGLY, THE CONTRACTOR MAY BE PAID THE DIFFERENCE BETWEEN ?2267 PER 4-OUNCE PACKAGE AND THE EQUIVALENT PRICE OF ?3067 FOR 4 OUNCES BASED ON THE QUOTATION OF THE NEXT LOW BIDDER, SUGGESTED IN THE LETTER OF DECEMBER 11, 1956, FROM THE SUPERINTENDENT, UNITED STATES MILITARY ACADEMY, TO THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, DEPARTMENT OF THE ARMY. A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE ADDITIONAL PAYMENT.

THE ENCLOSURES RECEIVED WITH THE LETTER OF JANUARY 17 ARE RETURNED HEREWITH.