B-131373, MAY 1, 1957

B-131373, MAY 1, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED APRIL 4, 1957, WITH ENCLOSURES, FROM CAPTAIN D. C. MACKENZIE, ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE V-1 OIL COMPANY, IDAHO FALLS, IDAHO, ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT NO. N665S 32178 WAS AWARDED.

BY SALES INVITATION NO. B-126-57-665, THE NAVAL SUPPLY DEPOT CLEAR FIELD, OGDEN, UTAH, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS USABLE SURPLUS PROPERTY. IN RESPONSE THE V 1 OIL COMPANY SUBMITTED A BID, IN PART, AS FOLLOWS:

TABLE ITEM DESCRIPTION AND LOCATION QUANTITY UNIT OF PRICE BID TOTAL NO. OF PROPERTY MEASURE PER UNIT PRICE

BID 15 PACKING, SPLIT RING, VALVE 1 LOT PRICE BID $460.00"

STEM, ASBESTOS-GRAPHITE PER LOT

TREATED, SIZE 7/8 INCH

L.D. BY 1 1/8 INCH. O.D.

BY 1/8 INCH THICKNESS,

1/4 INCH W. MFG: HUDSON

MOTOR CAR CO. PART

NO. 324399. (APPROX.

144,859 EACH) PACKED:

13 WOOD BOXES, WT: 1,760 LBS,

CU: 54.0, HF LOHHO 11469,

LOC: C-13, TOTAL ACQ. COST

$4,345.77 APA, UNUSED-GOOD.

THE BID OF THE COMPANY, WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $100, WAS ACCEPTED AS TO ITEM 15 ON FEBRUARY 13, 1957.

IN A LETTER DATED FEBRUARY 15, 1957, THE V-1 OIL COMPANY ADVISED THE CONTRACTING OFFICER THAT THE AWARD OF ITEM 15 (SPLIT RING PACKING) TO THE COMPANY WAS IN ERROR SINCE IT HAD NOT SUBMITTED A BID ON THAT ITEM BUT THAT IT HAD BID ON A 11,000 CFM FAN, THE ITEM NUMBER OF WHICH, IT STATED, WAS UNKNOWN AT THAT TIME. BY LETTER DATED FEBRUARY 19, 1957, THE COMPANY WAS FURNISHED A PHOTOSTATIC COPY OF ITS ORIGINAL BID, WHICH SHOWED THAT IT HAD INSERTED THE FIGURE OF $460 IN THE SPACE PROVIDED FOR A PRICE ON ITEM 15. THE COMPANY WAS REQUESTED TO REMIT THE BALANCE OF THE PURCHASE PRICE OF ITEM 15 AND TO FURNISH SHIPPING INSTRUCTIONS. BY LETTER DATED FEBRUARY 27, 1957, THE COMPANY ADVISED THAT THE INSERTION OF A BID PRICE ON ITEM 15 (SPLIT RING PACKING) WAS IN ERROR AS IT WAS ITS INTENT TO BID ON ITEM 24 (FAN) AND NOT ITEM 15. IN EXPLANATION OF THE ERROR, IT WAS POINTED OUT THAT THE SPACE PROVIDED FOR QUOTING A PRICE ON ITEM 15 WAS NOT ON THE SAME PAGE AS THE DESCRIPTION OF THE ITEM; THAT THE SAME WAS TRUE AS TO ITEM 24, WHICH WAS THE FAN ON WHICH IT HAD INTENDED TO BID; AND THAT IT WAS OBVIOUS THAT THE ERROR HAD RESULTED FROM GETTING THE PAGES MIXED. EXAMINATION OF THE INVITATION INDICATES THAT SUCH AN ERROR COULD READILY HAVE OCCURRED.

ORDINARILY, WHERE ONLY ONE BID IS RECEIVED ON AN ITEM--- AS IN THE PRESENT CASE--- THERE IS NO BASIS FOR COMPARISON OF BIDS; HENCE, THERE IS NOTHING TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. SEE 17 COMP. GEN. 560, AND 26 ID. 415. HOWEVER, IN A REPORT DATED MARCH 11, 1957, THE CONTRACTING OFFICER STATED THAT THE ITEM IN QUESTION WAS PREVIOUSLY OFFERED FOR SALE UNDER ANOTHER INVITATION AND THAT IN RESPONSE THERETO ONLY ONE BID IN THE AMOUNT OF $1.04 WAS RECEIVED AND THAT IT HAD BEEN DECLINED; AND THAT ALTHOUGH THE ACQUISITION COST OF THE 144,859 PACKING RINGS COVERED BY ITEM 15 IS SHOWN IN THE SALES BROCHURE AS BEING $4,345.77, THE V-1 OIL COMPANY'S BID OF $460 FOR THE ITEM COULD BE CONSIDERED HIGH, AS THIS TYPE OF MATERIAL HAS LITTLE COMMERCIAL VALUE. IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT A REQUEST FOR VERIFICATION OF THE BID WOULD HAVE BEEN IN ORDER BEFORE ITS ACCEPTANCE.

ACCORDINGLY, SINCE THE ERROR WAS ALLEGED PROMPTLY UPON RECEIPT OF THE NOTICE OF AWARD, AND SINCE IT APPEARS THAT DELIVERY HAS NOT BEEN MADE AND THE COMPANY HAS TAKEN NO FURTHER ACTION TOWARDS COMPLETION OF THE CONTRACT, IT MAY BE RELEASED FROM ITS OBLIGATION UNDER CONTRACT NO. N665S- 32178, AS RECOMMENDED BY THE CONTRACTING OFFICER.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT DATED MARCH 11, 1957, ARE RETURNED.