B-135958, MAY 27, 1958

B-135958, MAY 27, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MAY 16, 1958, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), RELATIVE TO AN ERROR CAMPEAU TOOL AND DIE COMPANY ALLEGES IT MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. ORD-20-118-58-93.

THE DEPARTMENT OF THE ARMY, ORDNANCE CORPS, HEADQUARTERS ORDNANCE TANK AUTOMOTIVE COMMAND, DETROIT, MICHIGAN, REQUESTED BIDS--- TO BE OPENED JANUARY 13, 1958--- FOR THE FURNISHING OF 4,006 TUBE ASSEMBLIES. CAMPEAU TOOL AND DIE COMPANY SUBMITTED THE LOW BID OF $8.84 EACH. THE OTHER BIDS RECEIVED WERE $19.45, $25.72, AND $46.75.

BY LETTER OF JANUARY 22, 1958, CAMPEAU TOOL AND DIE COMPANY ADVISED THE PROCUREMENT OFFICE THAT IT HAD FAILED TO INCLUDE IN ITS BID THE COST OF PRESSURE TESTING LISTED ON THE REVERSE SIDE OF ONE OF THE WORKSHEETS. ALSO, IT WAS STATED THAT HAD SUCH COST BEEN INCLUDED, THE BID SHOULD HAVE BEEN AS FOLLOWS:

TABLE

"$7.67 COST OF COMPONENTS PLUS ASSEMBLY 1.36 PRESSURE

TESTING AND INSPECTION ----- $9.01 .45 5 PERCENT

FOR HANDLING AND FREIGHT ----- $9.46 .94 10 PERCENT

FOR PROFIT ----- $10.40"

IT IS NOTED THAT THE COST OF PRESSURE TESTING ON THE REVERSE OF THE WORKSHEET WAS $1.05 WHEREAS IN THE LETTER OF JANUARY 22, 1958, ALLEGING THE ERROR, IT WAS SHOWN THAT THE COST OF SUCH TESTING WAS $1.36, AS INDICATED ABOVE. THE COMPANY IN ITS LETTER OF MARCH 4, 1958, TO THE PROCUREMENT OFFICE IN SPEAKING OF THE COST OF TESTING THE ASSEMBLIES STATED THAT "WE ESTIMATED THE COST OF THIS OPERATION TO BE $1.56 EACH.' IT WAS NOT UNTIL ITS LETTER OF APRIL 18, 1958, OR AFTER THE BIDDER HAD VISITED THE COMMAND AND DISCUSSED THE ERROR WITH THE PURCHASING OFFICER, THAT THE COMPANY ALLEGED IT INTENDED TO BID $9.89 EACH FOR THE ASSEMBLIES. IN VIEW OF THESE INCONSISTENCIES IT DOES NOT APPEAR THAT THE COMPANY HAS CONCLUSIVELY ESTABLISHED THE INTENDED BID PRICE BUT FOR THE ERROR THAT OCCURRED AT THE TIME THE BID WAS SUBMITTED.

THE STATUTES REQUIRING ADVERTISEMENT FOR BIDS AND THE AWARD OF CONTRACTS TO THE LOWEST RESPONSIBLE BIDDERS ARE PRIMARILY FOR THE BENEFIT OF THE UNITED STATES IN SECURING BOTH FREE COMPETITION AND THE LOWEST COMPETITIVE PRICES IN ITS PROCUREMENT ACTIVITIES. IN CERTAIN CASES WHERE A MISTAKE HAS BEEN ALLEGED PROMPTLY AFTER OPENING OF BIDS BUT BEFORE AWARD OF A CONTRACT, AND THERE HAS BEEN A TIMELY PRESENTATION OF CONVINCING EVIDENCE THAT A MISTAKE WAS MADE, ITS NATURE, HOW IT OCCURRED, AND WHAT THE BID PRICE WOULD HAVE BEEN EXCEPT FOR THE MISTAKE, THIS OFFICE HAS PERMITTED THE BID TO BE CORRECTED. THESE CASES HAVE BEEN RELATIVELY FEW IN NUMBER, AND THE ACTION HAS BEEN TAKEN ONLY WHERE THE EVIDENCE SUBMITTED ESTABLISHES BEYOND ALL DOUBT THE ACTUAL INTENTION OF THE BIDDER.

THE RECORD PRESENTED IS THEREFORE NOT CONSIDERED SUFFICIENT TO WARRANT A DEPARTURE FROM THE BASIC RULE THAT BIDS MAY BE CHANGED AFTER THE BIDS HAVE BEEN OPENED. SEE 17 COMP. GEN. 575 AND 23 ID. 596, 599. HOWEVER, IN VIEW OF THE WIDE DISPARITY BETWEEN THE BID OF CAMPEAU TOOL AND DIE COMPANY AND THE OTHER BIDS AND THE GOVERNMENT'S ESTIMATE, IT IS APPARENT THAT THE COMPANY MADE AN ERROR IN ITS BID. THE BID OF CAMPEAU TOOL AND DIE COMPANY SHOULD THEREFORE BE DISREGARDED IN MAKING AWARD.