B-140695, SEP. 18, 1959

B-140695, SEP. 18, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2 L8/L8/NT4-4), DATED SEPTEMBER 8, 1959, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING A REQUEST BY WATERMAN SUPPLY COMPANY, WILMINGTON, CALIFORNIA, THAT ITEM NO. 38 ON CONTRACT NO. N244S-55765 BE CANCELED BECAUSE OF AN OBVIOUS ERROR IN ITS BID ON WHICH THE AWARD OF THAT ITEM WAS BASED.

IN RESPONSE TO SALES INVITATION NO. B-105-59-244 ISSUED BY THE UNITED STATES NAVAL SUPPLY DEPOT, SAN DIEGO, CALIFORNIA, WATERMAN SUPPLY COMPANY SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, ITEM NO. 38 AT A UNIT PRICE OF $16.99 AND A TOTAL OF $305.82 FOR THE MATERIAL DESCRIBED THEREUNDER, AS FOLLOWS:

"BOAT KNEES, WOOD, L-SHAPED, 28 INCHES BY 50 INCHES LENGTH OF LEGS. UNUSED, FAIR CONDITION ACQUISITION COST $224.00 G NSA" AND CONSISTING OF 16 UNITS. THREE OTHER BIDS, RANGING FROM $0.03 TO $0.38875, WERE ALSO RECEIVED ON ITEM NO. 38. THE WATERMAN BID, BEING THE HIGHEST, WAS ACCEPTED AND THAT ITEM WAS INCLUDED WITH OTHERS ON CONTRACT NO. N244S- 55765 AWARDED ON MAY 14, 1959.

AFTER AWARD OF THE CONTRACT AND PAYMENT ON MAY 25, 1959, BY THE PURCHASER OF THE CONTRACT PRICE IN FULL, MR. SEYMOUR WATERMAN, IN LETTER DATED JUNE 10, 1959, ADVISED THE SUPPLY OFFICER IN CHARGE OF THE DEPOT THAT HE HAD DISCOVERED DURING A VISIT TO THE DEPOT OFFICE ON THE PREVIOUS DAY THAT HE HAD MADE AN ERROR IN SUBMITTING HIS FIRM'S BID ON ITEM NO. 38. HE STATED THAT THE FIRM DID NOT HAVE THE ORIGINAL WORKSHEETS OR A COPY OF ITS BID, BUT EXPLAINED THAT THE FIRM HAD NOT INTENDED TO SUBMIT A BID ON ITEM NO. 38 BUT RATHER ON THE TWO FOLLOWING LOTS (ITEMS NOS. 39 AND 40), AND THAT THROUGH HASTE HE APPARENTLY HAD ENTERED THE BID ON ITEM NO. 38 INSTEAD OF ON ONE OF THOSE ITEMS. MR. WATERMAN CONTENDED THAT, NOTWITHSTANDING HOW THE ERROR OCCURRED, AN ERROR IN HIS FIRM'S BID SHOULD HAVE BEEN OBVIOUS TO THE CONTRACTING OFFICER FROM A COMPARISON OF ITS BID WITH THE ACQUISITION COST OF THE MATERIAL INVOLVED AND WITH THE COMPETITIVE BIDS RECEIVED ON ITEM NO. 38.

THE CONTRACTING OFFICER IN HIS STATEMENT OF FACTS AND RECOMMENDATIONS REPORTS THAT THE CONTRACTOR'S BID ON ITEM NO. 38 IN THE AMOUNT OF $16.99 EACH, WHEN COMPARED WITH THE UNIT ACQUISITION COST OF $15.25 AND WITH THE THREE OTHER BIDS ON THE ITEM, APPEARS TO BE OUT OF LINE TO THE EXTENT THAT HE SHOULD HAVE NOTED A POSSIBILITY OF ERROR IN THE CONTRACTOR'S BID AND REQUESTED WATERMAN SUPPLY COMPANY TO CONFIRM ITS BID PRIOR TO ACCEPTANCE AND AWARD. THE CONTRACTING OFFICER RECOMMENDS, THEREFORE, THAT THE CONTRACTOR BE RELIEVED FROM THE CONTRACT REQUIREMENTS AS TO ITEM NO. 38.

IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE PROBABILITY OF ERROR IN THE BID OF WATERMAN SUPPLY COMPANY ON ITEM NO. 38 AND SHOULD HAVE AFFORDED THE BIDDER AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO THE ACCEPTANCE THEREOF. ACCORDINGLY, SINCE THIS WAS NOT DONE AND SINCE THE RECORD INDICATES THAT THE MATERIAL INVOLVED IS STILL IN THE POSSESSION OF THE GOVERNMENT, AWARD OF ITEM NO. 38 SHOULD BE CANCELED FROM CONTRACT NO. N244S-55765 WITHOUT LIABILITY TO WATERMAN SUPPLY COMPANY, AND THE CONTRACT PRICE IN THE AMOUNT OF $305.82 FOR THAT ITEM SHOULD BE REFUNDED, IF OTHERWISE CORRECT.