B-142727, MAY 12, 1960

B-142727, MAY 12, 1960

TO SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED APRIL 27, 1960, WITH ENCLOSURES, REQUESTING, IN BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. DA-44-019-TC 2039 ON MARCH 14, 1960, TO MR. GEORGE W. COOLEY.

BY INVITATION NO. TC-44-019-60-138 DATED MARCH 4, 1960, THE PURCHASING AND CONTRACTING DIVISION, U.S. ARMY TRANSPORTATION TRAINING COMMAND, FORT EUSTIS, VIRGINIA, INVITED BIDS--- TO BE OPENED MARCH 14, 1960--- FOR FURNISHING, F.O.B. FORT STORY, VIRGINIA, A LOT OF TRAINING CARGO, CONTAINING SCRAP LUMBER, AS INDICATED IN THE SCHEDULE ATTACHED THERETO. ONLY ONE BID WAS RECEIVED, NAMELY, THE BID SUBMITTED BY MR. GEORGE W. COOLEY WHICH WAS IN THE AMOUNT OF $23,548.40. AWARD OF CONTRACT WAS MADE ON MARCH 14, 1960. BY LETTER DATED MARCH 16, 1960, THE CONTRACTOR ALLEGED THAT HE HAD MADE AN ERROR IN COMPUTING HIS BID IN THAT HE MULTIPLIED THE UNIT PRICE OF THE LARGER BOXES COMPRISING THE LOT, BY 300 INSTEAD OF 3,000, THE QUANTITY TO BE FURNISHED. HIS LETTER IS IN PERTINENT PART AS FOLLOWS:

"MY WORK SHEET TOTALS ARE AS FOLLOWS:

TABLE

1,870 EA. 14 INCHES BY 14 INCHES BY 21 INCHES AT $4.82 EA. 9,013.40

300 EA. 40 INCHES BY 40 INCHES BY 48 INCHES AT 48.45 EA. 14,535.00

LUMP SUM TOTAL: 23,548.40

"THE TOTAL REQUIREMENT ON THE 40 INCHES BY 40 INCHES BY 48 INCHES BOX IS 3,000 INSTEAD OF THE 300 I FIGURED.

"THIS BOX CONTAINS 44.4 CU. FT. TO FILL EACH BOX WILL REQUIRE 1/3 CORD OF WOOD OR A TOTAL OF 1,000 CORDS OF WOOD FOR THE 3,000 UNITS. AT $25.00 PER CORD FOR THE WOOD ALONG THIS COMES TO $25,000.00.

"THE WEIGHT OF 44.4 CU. FT. OF WOOD AT 52 LBS. PER CU. FT. IS 2,288 LBS. PER BOX, WHICH MAKES THE DELIVERING FREIGHT $10. EACH OR $15,000.00.

"I SERIOUSLY DOUBT IF THE STYLE AND DESIGN OF THE BOX SPECIFIED WILL SUPPORT THIS WEIGHT OF WOOD.

"FROM THIS YOU CAN SEE THE COST OF THE WOOD ALONE IS IN EXCESS OF THE TOTAL BID, WITHOUT ANY REGARD TO THE COST OF THE CONTAINER, WHICH IS THE MAJOR ITEM.'

THE WORKSHEETS SUBMITTED ESTABLISH THAT THE CONTRACTOR MADE THE ERROR AS ALLEGED. THE CONTRACTING OFFICER STATES THAT, IN ACCORDANCE WITH THE ESTABLISHED PROCEDURE, HE WAS INFORMED PRIOR TO AWARD OF THE PRICE ANALYST'S ESTIMATE OF $25,012.50 FOR THE HARDWOOD FILLED BOXES, WHICH WAS BASED ON $3.75 EACH FOR THE SMALL BOXES (1,870) AND $6 EACH FOR THE LARGE BOXES (3,000). AT THE TIME OF AWARD HE WAS "SATISFIED" WITH THESE ESTIMATES BUT HE ADMITS NOW THAT HE FAILED TO TAKE INTO ACCOUNT THE AMOUNT OF THE TRANSPORTATION COSTS WHICH HE ESTIMATES AS $25,310, OR MORE THAN THE CONTRACT PRICE. ALSO, HE STATES THAT HE FAILED TO CALCULATE THE TRUE COST OF THE CONTAINER LUMBER, ESPECIALLY AS TO THE LARGER SIZE BOXES, AND HE FEELS THAT HE WAS ON CONSTRUCTIVE NOTICE OF ERROR IN THE BID PRICE AS IT SHOULD HAVE BEEN READILY APPARENT THAT THE GOVERNMENT ESTIMATE OF $6 EACH FOR THE LARGE BOXES WAS GROSSLY UNDERESTIMATED. HE ESTIMATES THAT A FAIR PRICE FOR THE SUPPLIES WOULD HAVE BEEN $80,095 AS ITEMIZED IN HIS REPORT OF MARCH 28, 1960. HE RECOMMENDS THAT THE CONTRACT BE CANCELED OR RESCINDED.

IN THE CIRCUMSTANCES, ESPECIALLY SINCE THE ERROR WAS ALLEGED PROMPTLY UPON AWARD AND SINCE IT IS REPORTED THAT THE CONTRACTOR IS NOT PROCEEDING WITH PERFORMANCE, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY ON THE CONTRACTOR'S PART, AS ADMINISTRATIVELY RECOMMENDED.