B-142922, JUN. 7, 1960

B-142922, JUN. 7, 1960

TO THE HONORABLE JOHN A. MCCONE, CHAIRMAN, ATOMIC ENERGY COMMISSION:

REFERENCE IS MADE TO A LETTER DATED MAY 16, 1960, WITH ENCLOSURES, FROM THE DEPUTY GENERAL MANAGER, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH THE GENERAL ELECTRIC COMPANY, PASCO, WASHINGTON, ALLEGES IT MADE IN ITS BID UPON WHICH PURCHASE ORDER NO. HA-60 -88-2324 WAS ISSUED ON FEBRUARY 16, 1960.

BY REQUEST FOR QUOTATIONS NO. G-391642 ISSUED DECEMBER 2, 1959, THE HANFORD OPERATIONS OFFICE, ATOMIC ENERGY COMMISSION, RICHLAND, WASHINGTON, REQUESTED QUOTATIONS FOR ELECTRIC MOTORS. THE GENERAL ELECTRIC COMPANY, PASCO, WASHINGTON, SUBMITTED THE LOW BID AMOUNTING TO $1,412.32 FOR 14 MOTORS, OR $100.88 EACH. THE OTHER BIDS SUBMITTED RANGED IN PRICE FROM $124.74 TO $133.98 EACH.

SINCE THE GENERAL ELECTRIC COMPANY'S QUOTATION WAS APPROXIMATELY $20 BELOW THE PRICE FOR A STANDARD MOTOR OF THIS TYPE, THE COMPANY WAS REQUESTED TO VERIFY ITS BID.

BY LETTER DATED DECEMBER 16, 1959, THE GENERAL ELECTRIC COMPANY ALLEGED AN ARITHMETICAL ERROR IN ITS QUOTATION AND REQUESTED THAT ITS UNIT PRICE BE INCREASED FROM $100.88 TO $110.88. A WORKSHEET SUBMITTED BY A LETTER DATED JANUARY 11, 1960, INDICATES THAT A $10 ERROR IN ADDITION WAS MADE IN COMPUTING THE INTENDED UNIT PRICE.

BY LETTER DATED MARCH 3, 1960, THE GENERAL ELECTRIC COMPANY WAS NOTIFIED THAT PURCHASE ORDER NO. HA-60-88-2324 HAD BEEN ISSUED BASED ON ITS ORIGINAL QUOTATION AND STEPS WERE BEING TAKEN TO DETERMINE IF FINANCIAL RELIEF CAN BE GRANTED. ON THIS BASIS, THE GENERAL ELECTRIC COMPANY ACCEPTED THE PURCHASE ORDER AND COMPLETED DELIVERY OF THE MOTORS ON MARCH 18, 1960.

SINCE AN ERROR IN BID WAS ALLEGED AND SATISFACTORILY EXPLAINED PRIOR TO AWARD, THE GOVERNMENT IS NOT ENTITLED TO TAKE ADVANTAGE OF THE BIDDER'S ERROR. ACCEPTANCE OF A BID WITH KNOWLEDGE OF ERROR THEREIN DOES NOT EFFECT A VALID AND BINDING CONTRACT. SEE NASON COAL COMPANY V. UNITED STATES, 64 C.CLS. 526 AND KEMP V. UNITED STATES, 38 F.SUPP. 568.

ON THE RECORD, THERE IS NO DOUBT THAT THE GENERAL ELECTRIC COMPANY MADE AN ERROR IN BID, AS ALLEGED, AND THAT IT INTENDED THE BID PRICE TO BE $10 MORE PER UNIT. ITS ACCEPTANCE OF THE PURCHASE ORDER WITH THE ASSURANCE OF THE CONTRACTING OFFICE THAT STEPS WERE BEING TAKEN TO DETERMINE IF FINANCIAL RELIEF COULD BE GRANTED DOES NOT PRECLUDE ITS CLAIM FOR THE ADDITIONAL $10 PER UNIT.

SINCE THE GOVERNMENT WAS ON NOTICE OF THE ERROR IN BID PRIOR TO AWARD AND SINCE THE WORKSHEET ESTABLISHES THE INTENDED BID--- WHICH IS STILL THE LOWEST PRICE OF THE FOUR BIDS RECEIVED--- AN ADDITIONAL PAYMENT OF $140 IS AUTHORIZED TO BE MADE TO THE GENERAL ELECTRIC COMPANY FOR THE 14 MOTORS DELIVERED UNDER PURCHASE ORDER NO. HA-60-88 2324.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE ADDITIONAL PAYMENT ON THE MOTORS.