B-134179, JAN. 9, 1958

B-134179, JAN. 9, 1958

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 27, 1957, WITH ENCLOSURES, FROM THE COMMISSIONER, FEDERAL SUPPLY SERVICE, FURNISHING THE REPORT REQUESTED BY OUR OFFICE RELATIVE TO AN ERROR THE LAFAYETTE SAW AND KNIFE COMPANY, BROOKLYN, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. GS-00S-15109 WAS AWARDED.

THE FEDERAL SUPPLY SERVICE, NATIONAL BUYING DIVISION, WASHINGTON, D.C., BY INVITATION DATED MARCH 6, 1957, REQUESTED BIDS FOR FURNISHING HAND TOOLS UNDER THE FEDERAL SUPPLY SCHEDULE, FSC GROUP 51, SECTION A, DURING THE PERIOD BEGINNING JUNE 1, 1957, AND ENDING MAY 31, 1958. ITEM 3455-S- 289 COVERS VARIOUS SIZES OF TYPE II BAND SAW BLADES IN TWO STYLES. RESPONSE THE LAFAYETTE SAW AND KNIFE COMPANY SUBMITTED A BID DATED MARCH 12, 1957, OFFERING TO FURNISH UNDER ITEM 3455-S-289, TYPE II BAND SAW BLADES IN SIZES OF 1/8 INCH, 3/16 INCH AND 1/4 INCH AT A PRICE OF $0.018 PER FOOT AND IN SIZES OF 1/4 INCH TO 2 INCHES AT PRICES RANGING FROM $0.20 PER FOOT TO $0.70 PER FOOT. THE COMPANY ALSO OFFERED TO FURNISH THE WELDS FOR 1/8 INCH, 3/16 INCH, AND 1/4 INCH BAND SAW BLADES AT A PRICE OF $0.093 AND TO FURNISH WELDS FOR 3/8 INCH TO 2 INCH BAND SAW BLADES AT PRICES RANGING FROM $0.93 TO $3.08. IN ITS BID THE COMPANY STIPULATED THAT THE PRICES FOR 1/8 INCH TO 1 INCH BAND SAW BLADES AND WELDS WERE SUBJECT TO A DISCOUNT OF 50 PERCENT AND THAT THE PRICES FOR 1 1/4 INCH TO 2 INCH BAND SAW BLADES AND WELDS WERE SUBJECT TO A DISCOUNT OF 30 PERCENT. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDDERS ON 1/8 INCH, 3/16 INCH, AND 1/4 INCH BAND SAW BLADES QUOTED PRICES RANGING FROM $0.099 PER FOOT TO $0.1344 PER FOOT.

THE RECORD INDICATES THAT SINCE THE BID OF THE LAFAYETTE SAW AND KNIFE COMPANY ON THE 1/8 INCH, 3/16 INCH, AND 1/4 INCH BAND SAW BLADES AND WELDS WAS OUT OF LINE WITH THE OTHER BIDS RECEIVED, THE COMPANY WAS REQUESTED TO ANSWER FOUR QUESTIONS IN REGARD TO THE SIZES OFFERED AND TO VERIFY ITS BID PRICES ON THOSE SIZES BY TELEGRAM DISPATCHED ON APRIL 30, 1957, READING IN PART AS FOLLOWS: ,ALSO CONFIRM WELD PRICE .093 AND FOOT PRICE .018 ON 1/4 INCH.' BY TELEGRAM DATED MAY 2, 1957, THE COMPANY ADVISED AS FOLLOWS: "RETEL ONLY CHANGE SHOULD BE LESS 30 PERCENT WHERE IT READS LESS 50 PERCENT. BALANCE OF BID OKAY.' SINCE THE COMPANY'S REPLY DID NOT CONTAIN THE ANSWERS TO THE FOUR QUESTIONS SET FORTH IN THE ADMINISTRATIVE OFFICE'S TELEGRAM, IT WAS AGAIN REQUESTED BY TELEGRAM DATED MAY 8, 1957, TO FURNISH THE ADDITIONAL INFORMATION REQUIRED. THE COMPANY WAS ALSO REQUESTED TO FURNISH THE WORKSHEET OR OTHER DATA USED IN PREPARING ITS BID TO SUBSTANTIATE ITS CLAIM OF ERROR IN QUOTING A 50 PERCENT DISCOUNT. IN HIS REPORT OF NOVEMBER 8, 1957, THE CONTRACTING OFFICER STATED THAT SINCE THE COMPANY DID NOT REPLY TO THE TELEGRAM OF MAY 8, 1957, IT WAS CONTACTED BY TELEPHONE ON MAY 14, 1957, AND THAT MR. MORRIS KAPLAN, THE PARTNER WHO SIGNED THE BID, INFORMED HIS OFFICE THAT A MISTAKE WAS MADE IN QUOTING A DISCOUNT OF 50 PERCENT; THAT A CORRECTION OF SUCH DISCOUNT FROM 50 PERCENT TO 30 PERCENT WOULD BE THE ONLY CHANGE IN THE BID; AND THAT THE BID INCLUDED ALL REQUIRED TYPES, STYLES, AND WIDTHS OF THE SPECIFICATIONS. A LETTER DATED MAY 14, 1957, WHICH WAS SIGNED BY MR. KAPLAN, THE COMPANY STATED THAT THE ANSWER TO THE FOUR QUESTIONS CONTAINED IN THE CONTRACTING OFFICER'S TELEGRAM OF APRIL 30, 1957, WAS IN THE AFFIRMATIVE AND REQUESTED THAT THAT PART OF ITS BID SHOWING A DISCOUNT OF 50 PERCENT BE ALLOWED TO STAND. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEM 3455-S-289 ON MAY 27, 1957. ITEM 3455-S-289 WAS LATER REDESIGNATED AS ITEM 40-2 AND THE LATTER ITEM WAS FURTHER BROKEN DOWN INTO SUBITEMS (A) TO (1), INCLUSIVE, IN THE CONTRACT.

IN A LETTER DATED OCTOBER 18, 1957, TO OUR OFFICE, THE COMPANY REQUESTED THAT THE UNIT PRICE OF 1/8 INCH, 3/16 INCH, AND 1/4 INCH TYPE II BAND SAW BLADES COVERED BY SUBITEMS (A), (B), AND (C) OF ITEM 40-2 OF THE CONTRACT BE CHANGED FROM $0.018 PER FOOT TO $0.18 PER FOOT AND THAT THE DISCOUNT OF 50 PERCENT ON SUBITEMS (A) TO (H), INCLUSIVE, OF ITEM 40-2 BE CHANGED TO READ 20 PERCENT. BY LETTER DATED NOVEMBER 5, 1957, THE COMPANY SUBMITTED A COPY OF A WORKSHEET ALLEGED TO BE ITS ORIGINAL ESTIMATE SHEET, AND COPIES OF ITS SUPPLIER'S PRICE LISTS.

COMPARISON OF THE COMPANY'S BID PRICE OF $0.018 PER FOOT FOR THE 1/8 INCH, 3/16 INCH AND 1/4 INCH SIZES OF BAND SAW BLADES WITH THE PRICE OF $0.20 PER FOOT QUOTED BY IT FOR THE NEXT SIZE OF BAND SAW BLADES, 3/8 INCH, SHOWS THAT THE FORMER PRICE IS LESS THAN ONE-TENTH OF THE LATTER PRICE. IT IS APPARENT THAT THE COMPANY'S BID PRICE OF $0.018 PER FOOT FOR THE 1/8 INCH, 3/16 INCH AND 1/4 INCH BAND SAW BLADES COVERED BY SUBITEMS (A), (B) AND (C) OF ITEM 40-2 OF THE CONTRACT IS ERRONEOUS. IT ALSO APPEARS THAT THE COMPANY'S BID PRICE OF $0.093 FOR THE WELDS FOR THE 1/8 INCH, 3/16 INCH AND 1/4 INCH BAND SAW BLADES IS IN ERROR, SINCE IT IS ONLY ONE-TENTH OF THE PRICE QUOTED BY THE COMPANY FOR THE WELDS FOR THE 3/8 INCH TO 5/8 INCH BAND SAW BLADES. IN THE CIRCUMSTANCES, TO HOLD THE COMPANY TO ITS BID PRICES OF $0.018 PER FOOT AND $0.093 PER WELD FOR THE 1/8 INCH, 3/16 INCH AND 1/4 INCH BAND SAW BLADES WOULD APPEAR TO BE INEQUITABLE. ACCORDINGLY, CONTRACT NO. GS-00S-15109 MAY BE AMENDED TO PROVIDE FOR A LIST PRICE OF $0.18 PER FOOT FOR THE BAND SAW BLADES REQUIRED UNDER SUBITEMS (A), (B) AND (C) OF ITEM 40-2 AND FOR A LIST PRICE OF $0.93 FOR THE WELDS REQUIRED UNDER THOSE SUBITEMS, AND PAYMENT IS AUTHORIZED TO BE MADE ON THAT BASIS TO THE COMPANY FOR THE BAND SAW BLADES AND WELDS DELIVERED AND TO BE DELIVERED UNDER THOSE SUBITEMS OF THE CONTRACT DURING THE BALANCE OF THE CONTRACT PERIOD.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHERS COVERING ANY ADDITIONAL PAYMENTS AND ANY PAYMENTS AT THE NEW CONTRACT PRICES FOR SUBITEMS (A), (B) AND (C) OF ITEM 40-2 OF THE CONTRACT.

IN ITS LETTER OF OCTOBER 18, 1957, THE LAFAYETTE SAW AND KNIFE COMPANY ALLEGES THAT THE DISCOUNT OF 50 PERCENT, WHICH, IT STATED, IS SHOWN IN THE CONTRACT UNDER THE LIST PRICES FOR SUBITEMS (A) TO (H) OF ITEM 40-2 OF THE CONTRACT, SHOULD READ 20 PERCENT. ALTHOUGH THE WORKSHEET SUBMITTED BY THE COMPANY PURPORTS TO SHOW A DISCOUNT OF 20 PERCENT FOR THE ITEMS IN QUESTION, AN INTENTION TO OFFER SUCH A DISCOUNT ON SUBITEMS (A) TO (H) OF ITEM 40-2 HAS NOT BEEN ESTABLISHED BY THE COMPANY. IN FACT, A CONTRARY INTENTION IS SHOWN BY THE FACT THAT, PRIOR TO AWARD, THE COMPANY FIRST ALLEGED THAT THE DISCOUNT SHOULD HAVE BEEN 30 PERCENT INSTEAD OF 50 PERCENT AND THAT LATER, STILL PRIOR TO AWARD, THE COMPANY REQUESTED THAT THE DISCOUNT OF 50 PERCENT BE ALLOWED TO STAND. MOREOVER, IT IS NOTED THAT THE COMPANY'S NET PRICES (LIST PRICES LESS A DISCOUNT OF 50 PERCENT) FOR SUBITEMS (D) TO (H) OF ITEM 40-2, ON WHICH SUBITEMS NO ERROR AS TO UNIT PRICE IS ALLEGED BY THE COMPANY, ARE IN LINE WITH THE NET PRICES QUOTED BY THE OTHER BIDDERS ON THESE SUBITEMS. ON THE RECORD, THERE APPEARS NO LEGAL BASIS FOR CHANGING THE AMOUNT OF THE DISCOUNT APPLICABLE TO SUBITEMS (A) TO (H) OF ITEM 40-2 OF CONTRACT NO. GS-00S-15109.