B-133859, OCT. 3, 1957

B-133859, OCT. 3, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 20, 1957, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH YAMATO SEISAKU-SHO, TOKYO, JAPAN, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. DA-92 557- FEF-26000 WAS AWARDED.

THE U.S. ARMY PROCUREMENT AGENCY, YOKOHAMA, JAPAN, BY REQUEST NO. 92 557- 57-8316-MN, ISSUED MARCH 29, 1957, REQUESTED BIDS FOR FURNISHING VARIOUS ITEMS OF STEEL PIPE DESCRIBED THEREIN. IN RESPONSE, YAMATO SEISAKU-SHO SUBMITTED A BID WHICH WAS ACCEPTED AS TO ITEMS NOS. 79, 87 AND 90 ON MAY 22, 1957.

AFTER RECEIPT OF THE NOTICE OF AWARD, YAMATO SEISAKU-SHO ALLEGED THAT IT HAD MADE AN ERROR IN ITS UNIT PRICE BID OF $0.67 FOR ITEM 79; THAT IT HAD COMPUTED ITS BID ON THE BASIS OF A UNIT WEIGHT OF 4 POUNDS RATHER THAN 8 POUNDS AND REQUESTED AN INCREASE IN THE UNIT PRICE TO $1.17. IN THIS CONNECTION, THE PERTINENT PART OF THE UNDATED STATEMENT OF THE CONTRACTING OFFICER IS AS FOLLOWS:

"B. THE CONTRACTOR ALLEGES THAT HIS OFFER PRICES FOR ALL THREE ITEMS WERE COMPUTED BY APPLYING A CERTAIN CONSTANT FACTOR TO THE WEIGHT OF THE ITEM TO BE PRODUCED. THE WEIGHTS OF THE THREE ITEMS CONCERNED AS WELL AS TWO OTHER ITEMS WHICH THE CONTRACTOR BID UNSUCCESSFULLY ARE SHOWN IN THE ATTACHED WORK SHEET. IN ALL CASES, EXCEPT FOR THIS ONE ITEM 79, THIS WORK SHEET SHOWS THAT WEIGHT FIGURES WERE TAKEN FROM FEDERAL SPEC WW-F-401 AND CORRESPONDED EXACTLY WITH THE FIGURES SHOWN THEREIN. IN THE CASE OF ITEM 79 THE CONTRACTOR'S WORK SHEET SHOWS A FIGURE OF 4 LBS. WHEREAS THE SPECIFICATION ON PAGE ELEVEN SHOWS A FIGURE OF 8 LBS. THIS, THE CONTRACTOR ALLEGES, IS THE BASIS OF HIS ERRONEOUS BID PRICE. THE CONTRACTOR ATTRIBUTES HIS MISTAKE TO THE ALLEGED FACT THAT HE REFERRED TO THE TABLE ON PAGE TEN DIRECTLY ABOVE THE APPLICABLE DRAWING OF ITEM 79 INSTEAD OF THE TABLE ON PAGE ELEVEN WHICH CONTAINS THE INFORMATION RELATING TO THE DRAWING. EXAMINATION OF THESE TWO TABLES INDICATES THAT THEY DO CONTAIN THE TWO FIGURES OF 4 AND 8 LBS. ACCORDINGLY THE CIRCUMSTANCES WHICH RESULTED IN SELECTION OF A WRONG FIGURE AS CLAIMED BY THE CONTRACTOR SEEM FULLY EXPLAINED.'

THE ABSTRACT OF BIDS SHOWS THAT FOR TWO OF THREE SIMILAR ITEMS THE CONTRACTOR BID ABOVE THE CONTRACTING OFFICER'S ESTIMATE BUT BELOW THE TECHNICAL SERVICE AND THE ONLY OTHER BIDDER'S QUOTATION. AS TO THE ITEM IN QUESTION, THE CONTRACTOR'S BID OF $0.67 WAS ONLY A LITTLE MORE THAN HALF OF THE TECHNICAL SERVICE ESTIMATE OF $1.21 AND THE OTHER BID OF $1.274 ONLY ABOUT TWO-THIRDS OF THE CONTRACTING OFFICER'S ESTIMATE OF $1.09. IN THE CIRCUMSTANCES, WE FEEL THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID AND, THEREFORE, THE BID OF YAMATO SEISAKU-SHO AS TO ITEM NO. 79 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

IN VIEW OF THE FOREGOING, THERE IS LITTLE DOUBT THAT THE CONTRACTOR MADE A BOND FIDE ERROR IN ITS BID AS A RESULT OF ITS FAILURE TO EXTRACT THE PROPER WEIGHT OF ITEM NO. 79 FROM THE WEIGHT SHOWN IN THE SPECIFICATION. ACCORDINGLY, PAYMENT FOR ITEM NO. 79 IS AUTHORIZED TO BE MADE TO YAMATO SEISAKU-SHO AT A UNIT PRICE OF $1.17, AS REQUESTED, WHICH PRICE REMAINS LOWER THAN THAT OF THE OTHER BIDDER. TO YAMATO SEISAKU-SHO AT A UNIT PRICE OF $1.17, AS REQUESTED, WHICH PRICE REMAINS LOWER THAN THAT OF THE OTHER BIDDER.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING SUCH PAYMENT.