B-132571, JUL. 26, 1957

B-132571, JUL. 26, 1957

TO THE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO A LETTER OF JULY 12, 1957, FROM THE CONTRACTING OFFICER, NATIONAL BUREAU OF STANDARDS, BOULDER LABORATORIES, BOULDER, COLORADO, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR PEERLESS RADIO DISTRIBUTORS, INC., ALLEGES IT MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 3997-57, DATED MARCH 20, 1957, WAS ISSUED.

SINCE AN AWARD HAS BEEN MADE IN THE PRESENT CASE, THE DECISION IS BEING ADDRESSED TO YOU. SEE 26 COMP. GEN. 993; 28 ID. 401; AND 36 ID. 513.

THE BOULDER LABORATORIES, BY INVITATION NO. 215-57, REQUESTED BIDS-- TO BE OPENED MARCH 18, 1957--- FOR FURNISHING ONE COMMUNICATIONS RECEIVER, 10 KC TO 540 KC, HAMMERLUND MODEL SP-600-VLF, OR EQUAL, TO THE BUREAU OF STANDARDS, BOULDER, COLORADO. IN RESPONSE, PEERLESS RADIO DISTRIBUTORS, INC., SUBMITTED A BID OF $1,484.80. REFERRING TO PREVIOUS CORRESPONDENCE, THE COMPANY, BY LETTER DATED JUNE 19, 1957, ALLEGES THAT IT MADE AN ERROR IN THE PREPARATION OF ITS BID; THAT IT ASSUMED THAT THE STANDARD LIST PRICE OF $1,875 CARRIED A STANDARD DISCOUNT OF 28 PERCENT AND THAT IT, THEREFORE, CALCULATED ITS COST AS APPROXIMATELY $1,350 AND ADDED APPROXIMATELY 10 PERCENT THERETO FOR A TOTAL OF $1,484.80, THE QUOTED PRICE. HOWEVER, THE COMPANY, IN SUPPORT OF ITS ALLEGATION OF ERROR, HAS FURNISHED A COPY OF THE ACKNOWLEDGMENT OF ITS ORDER FROM THE HAMMARLUND MANUFACTURING COMPANY FROM WHICH IT APPEARS THAT THE FACTORY PRICING OF $1,875 WAS SUBJECT TO DISCOUNT OF ONLY 10 PERCENT, RATHER THAN 28 PERCENT AS ERRONEOUSLY ASSUMED IN DETERMINING ITS BID.

THE BID ANALYSIS SHEET SHOWS THAT THE FOLLOWING BIDS WERE RECEIVED:

TABLE

PEERLESS RADIO DISTRIBUTORS, INC. $1,484.84

HAMMARLUND MANUFACTURING CO., INC. 1,710.00

INTER-STATE RADIO AND SUPPLY 1,872.50

L. B. WALKER RADIO COMPANY 1,875.00

RADIO PRODUCTS SALES COMPANY 1,875.00

DENVER ELECTRONIC SUPPLY CO. 1,895.00

THUS, IT APPEARS THAT THE BID OF PEERLESS RADIO DISTRIBUTORS, INC., IN THE AMOUNT OF $1,484.80, WAS APPROXIMATELY $225 LESS THAN THAT OF ITS SUPPLIER-MANUFACTURER, HAMMARLUND MANUFACTURING COMPANY, INC. ALSO, IT HAS BEEN ASCERTAINED INFORMALLY THAT THE OTHER FOUR BIDDERS, WHOSE BIDS RANGED FROM $1,872.50 TO $1,895, ALL QUOTED ON THE HAMMARLUND MODEL RECEIVER. THE CIRCUMSTANCES, WHILE THE BID ANALYSIS SHEET OF ITSELF DOES NOT INDICATE THAT THE PRICE DIFFERENCES WERE SO GREAT THAT THE LOW BID PRICE NECESSARILY MUST HAVE BEEN ERRONEOUS, THE FACT THAT ALL BIDDERS, INCLUDING THE MANUFACTURER, BID ON THE IDENTICAL HAMMARLUND RECEIVER SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. THEREFORE, THE BID OF THE PEERLESS COMPANY SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

SINCE THE ERROR APPARENTLY WAS ALLEGED PROMPTLY AFTER AWARD, AND SINCE IT APPEARS THAT THE COMPANY HAS TAKEN NO FURTHER ACTION TOWARDS COMPLETION OF THE CONTRACT, THE AWARD MAY BE CANCELLED AND THE CONTRACTOR RELEASED FROM ITS OBLIGATION THEREUNDER.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S LETTER AND THE ABSTRACTS OF BIDS, ARE RETURNED.