B-134326, DECEMBER 6, 1957, 37 COMP. GEN. 398

B-134326, DECEMBER 6, 1957, 37 COMP. GEN. 398

CONTRACTS - MISTAKES - ERROR ESTABLISHMENT - PRICE ADJUSTMENT A CONTRACTOR WHO, AFTER THE AWARD OF A CONTRACT FOR FURNISHING TWO TYPES OF PAINT UNDER DIFFERENT SPECIFICATIONS, ALLEGES ERROR INSOFAR AS HIS PRICES FOR BOTH TYPES WERE INADVERTENTLY BASED ON THE SAME SPECIFICATIONS AND, THEREFORE, IDENTICAL, AND WHO SUBMITS WORKSHEETS SHOWING THAT THE RAW MATERIAL COST IS GREATER THAN HIS BID ON THOSE ITEMS HAS ESTABLISHED THAT A BONA FIDE ERROR WAS MADE AND THAT THE CONTRACTING OFFICER, HAVING KNOWLEDGE THAT ALL OTHER BIDDERS QUOTED HIGHER RATHER THAN IDENTICAL PRICES ON THE PAINT FOR THE HIGHER GRADE SPECIFICATIONS, SHOULD NOT HAVE ACCEPTED THE BID WITHOUT VERIFICATION. A PRICE ADJUSTMENT DUE A CONTRACTOR WHO, AFTER AWARD, HAS ESTABLISHED THAT A BONA FIDE ERROR WAS MADE IN HIS BID AND THAT AN INTENDED BID PRICE EXCEEDS THAT OF THE NEXT LOWEST BID IS LIMITED TO AN AMOUNT WHICH MAY NOT EXCEED THE NEXT LOWEST BID.

TO THE ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, DECEMBER 6, 1957:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 4, 1957, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE WALKER PAINT COMPANY, INC., SUNNYVALE, CALIFORNIA, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. GS-09S 2652 WAS AWARDED.

THE FEDERAL SUPPLY SERVICE, REGION 9, SAN FRANCISCO, CALIFORNIA, BY INVITATION NO. SFO-8246-57, REQUESTED BIDS--- TO BE OPENED APRIL 15, 1957- -- FOR FURNISHING ESTIMATED QUANTITIES OF EXTERIOR PAINT AS REQUIRED BY THE GENERAL SERVICES ADMINISTRATION STORES DEPOTS AT SAN FRANCISCO AND WILMINGTON, CALIFORNIA, DURING THE PERIOD BEGINNING FROM DATE OF AWARD AND ENDING SEPTEMBER 30, 1957, ITEMS 1 TO 20, INCLUSIVE. ITEMS 9 AND 10 COVER 150 GALLONS AND 275 GALLONS, RESPECTIVELY, OF PAINT, OIL, EXTERIOR, READY MIXED, WHITE LEAD BASE, COLOR WHITE, IN ONE GALLON CONTAINERS IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. TT-P 104. ITEMS 11 AND 12 COVER THE SAME TYPE OF PAINT AS REQUIRED UNDER ITEMS 9 AND 10 EXCEPT THAT THE PAINT IS TO BE IN 5-GALLON CANS.

IN RESPONSE THE WALKER PAINT COMPANY, INC., SUBMITTED A BID OFFERING TO FURNISH, AMONG OTHER ITEMS, THE PAINT UNDER ITEMS 9 AND 10 AT A PRICE OF $3.29 PER GALLON CAN AND THE PAINT UNDER ITEMS 11 AND 12 AT A PRICE OF $16.45 PER 5-GALLON CAN. THE SEVEN OTHER BIDS ON ITEMS 9 AND 10 SPECIFIED PRICES RANGING FROM $4 TO $6.52 PER GALLON CAN AND THE SAME BIDS ALSO SPECIFIED PRICES RANGING FROM $19.25 TO $32.10 PER 5 GALLON CAN. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 9 TO 12, INCLUSIVE, ON APRIL 25, 1957.

IT IS REPORTED THAT ON MAY 6, 1957, THE WALKER PAINT COMPANY, INC., ADVISED BY TELEPHONE THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEMS 9 TO 12, INCLUSIVE, IN THAT THE QUOTATION ON THOSE ITEMS WAS BASED ON FURNISHING PAINT IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. TT-P-102 RATHER THAN IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. TT-P-104 AS REQUIRED BY THE INVITATION; AND THAT THE CORPORATION REQUESTED PERMISSION TO BILL AT THE CORRECT PRICE FOR THOSE ITEMS. BY CONFIRMING LETTER DATED MAY 6, 1957, THE CORPORATION REITERATED ITS ALLEGATION OF ERROR AND SET FORTH THE BASIS OF ITS BID ON WHICH THE FORMULA FOR FEDERAL SPECIFICATION NO. TT-P-102 WAS COMPUTED AS WELL AS THE BASIS UPON WHICH THE BID SHOULD HAVE BEEN COMPUTED FOR THE FORMULA FOR FEDERAL SPECIFICATION NO. TT-P-104 WHICH WOULD HAVE RESULTED IN A BID PRICE OF $4.41 A GALLON. THE CORPORATION REQUESTED THAT ITS BID PRICE FOR ITEMS 9 TO 12, INCLUSIVE, BE CORRECTED ACCORDINGLY AND IT POINTED OUT THAT THE COST BREAKDOWN OF ITS INTENDED BID PRICE OF $4.41 PER GALLON SHOWS THAT ITS RAW MATERIAL COST OF $3.5069 PER GALLON ALONE IS GREATER THAN THE AMOUNT OF ITS ORIGINAL BID PRICE OF $3.29 PER GALLON.

IN A LETTER DATED SEPTEMBER 5, 1957, THE CORPORATION POINTED OUT THAT THE FACT THAT IT HAD QUOTED AN IDENTICAL PRICE FOR THE PAINT REQUIRED UNDER ITEMS 5, 6, 7, 8, 13 AND 14, WHICH, IT STATED, IS TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. TT-P-102, WOULD SUBSTANTIATE THAT ITS BID PRICE FOR THE PAINT REQUIRED UNDER ITEMS 9 TO 12, INCLUSIVE, WAS ALSO BASED ON THE SAME SPECIFICATION.

THE PAINT UNDER ITEMS 5, 6, 7, 8, 13 AND 14 WAS REQUIRED TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATIONS NO. TT-P-102 AND THE PAINT UNDER ITEMS 9 TO 12, INCLUSIVE, THE ITEMS IN QUESTION, WAS REQUIRED TO BE MANUFACTURED IN ACCORDANCE WITH FEDERAL SPECIFICATION NO. TT-P-104. THE CORPORATION QUOTED AN IDENTICAL PRICE OF $3.29 PER GALLON FOR THE PAINT COVERED BY ITEMS 5, 6, 9, 10, 13 AND 14, AND IF THE CORPORATION'S BID PRICES ON ITEMS 7, 8, 11 AND 12, WHICH CALL FOR DELIVERY OF 5-GALLON CANS OF PAINT, ARE CONVERTED TO A PER GALLON BASIS, THE SAME PRICE OF $3.29 PER GALLON IS OBTAINED. IT IS NOTED THAT EACH OF THE SEVEN OTHER BIDDERS WHO QUOTED ON BOTH TYPES OF PAINT QUOTED A HIGHER PRICE FOR THE PAINT COVERED BY SPECIFICATION NO. TT-P 104 THAN FOR THE PAINT COVERED BY SPECIFICATION TT-P-102. IT SEEMS OBVIOUS THAT THE CORPORATION DID NOT INTEND TO QUOTE AN IDENTICAL PRICE FOR THE PAINT COVERED BY THE TWO FEDERAL SPECIFICATIONS, SINCE THE PAINT COVERED BY SPECIFICATION NO. TT-P- 104 APPEARS TO BE A MORE EXPENSIVE ITEM THAN THE PAINT COVERED BY SPECIFICATION NO. TT-P-102. IN THE CIRCUMSTANCES, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE CORPORATION'S BID OF $3.29 PER GALLON CAN AND $16.45 PER 5-GALLON CAN FOR ITEMS 9 TO 12, INCLUSIVE, AND CONSEQUENTLY THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE CORPORATION TO VERIFY ITS BID.

THERE APPEARS LITTLE ROOM FOR DOUBT THAT THE CORPORATION MADE A BONA FIDE ERROR ON ITEMS 9 TO 12, INCLUSIVE, OF ITS BID, AS ALLEGED; HOWEVER, IF ITS BID THEREON BE INCREASED TO THE AMOUNT ALLEGEDLY INTENDED, IT WILL NOT BE THE LOWEST AGGREGATE BID ON THOSE ITEMS. ACCORDINGLY, AND SINCE IT IS REPORTED THAT THE CORPORATION WAS INSTRUCTED TO DELIVER THE PAINT REQUIRED UNDER ITEMS 9 TO 12, INCLUSIVE, SUBJECT TO ACTION BY THE COMPTROLLER GENERAL OF THE UNITED STATES ON THE CLAIM FOR RELIEF, PAYMENT IS AUTHORIZED TO BE MADE UNDER ITEMS 9 TO 12, INCLUSIVE, OF THE CONTRACT, IN THE AMOUNT OF THE NEXT LOWEST CORRECT AGGREGATE BID ON THOSE ITEMS, AS ADMINISTRATIVELY RECOMMENDED.