B-144718, APR. 10, 1961

B-144718, APR. 10, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 27, 1961, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, FORWARDING A REPORT AND OTHER DATA WHICH WE REQUESTED CONCERNING AN ERROR ALLEGED BY ALLIED DECALS, INC., CLEVELAND, OHIO, TO HAVE BEEN MADE IN ITS BID ON WHICH PURCHASE ORDER NO. NY O-1385 WITH THE U.S. ARMY CHEMICAL PROCUREMENT DISTRICT, NEW YORK, WAS BASED.

INVITATION NO. CML-30-070-60-134 DATED MAY 17, 1960, AND APPENDICES NOS. I AND II AND AMENDMENT NO. 1 SOLICITED BIDS--- TO BE OPENED JUNE 7, EXTENDED TO JUNE 14, 1960--- FOR FURNISHING THREE ITEMS OF "NAMEPLATE LABELS; IDENTIFICATION BANDS (GB) (VX) " MEETING SPECIFICATIONS AND DRAWINGS SET FORTH IN THE INVITATION FOR EACH OF THE ITEMS, WITH DELIVERY OF ALL ITEMS COMPLETE ON OR BEFORE DECEMBER 31, 1960. IN RESPONSE TO THE INVITATION BIDS WERE RECEIVED ON THE THREE ITEMS, AS FOLLOWS:

TABLE

ITEM NO. 2 ITEM NO. 4 ITEM NO. 6

UNIT PRICE UNIT PRICE UNIT PRICE

21,000 21,000 42,000

BIDDER PIECES PIECES PIECES TOTAL AIRMARK CO. $0.1175 $0.1175 $0.1425 $10,920.00 ALLIED DECALS, INC. 0.0369 0.0369 0.0369 3,099.60 NORTHWEST SCREEN PRINT CO. 0.0405 0.0405 0.181 9,303.00 *GEE GEE TAPE AND LABEL CO. 0.07650.0765 0.3525 18,018.00 *CRITERION DECALCOMANIA 0.0647 0.0647 0.33611 16,834.02

CO., INC.

*QUALIFIED BIDS

IN EVALUATING THE BIDS THE GOVERNMENT CONTRACT ADMINISTRATOR, NOTING THAT THE ALLIED DECALS, INC., TOTAL BID OF $1,549.80 ON ITEM NO. 6 WAS EXCEPTIONALLY LOW WHEN COMPARED WITH THE NEXT LOW BID OF $5,985 ON THAT ITEM--- A DIFFERENCE OF $4,435.20--- REQUESTED THE CORPORATION TO CONFIRM ITS BID ON ALL THREE ITEMS, NOS. 2, 4 AND 6, IN THE TOTAL AMOUNT OF $3,099.60. BY TELEGRAM DATED JUNE 15, 1960, THE CORPORATION CONFIRMED ITS BID, ADVISING "PRICE AND DELIVERY FIRM AS SUBMITTED IN BID CML 30-070-60- 134" AND BY A LATER TELEGRAM OF THE SAME DATE THE CORPORATION ADVISED ,RECEIVED AMENDMENT OF IFB NUMBER C/M/L 30-070-60 134 NOTED CONTENTS AND AWARE OF CHANGES. IN NO WAY WILL CHANGE BID.' THEREUPON, PURCHASE ORDER NO. NY 0-1385 WAS AWARDED ON JUNE 22, 1960, TO ALLIED DECALS, INC., AS THE LOWEST BIDDER, FOR ITEMS NOS. 2, 4 AND 6 AT THE TOTAL CONTRACT PRICE OF $3,099.60.

SOME CONSIDERABLE TIME THEREAFTER ALLIED DECALS, INC., IN A TELEPHONE CALL AND BY LETTERS DATED OCTOBER 12 AND 28, 1960, ADVISED THE PROCUREMENT OFFICE THAT IN ORDERING THE MATERIAL REQUIRED FOR THE CONTRACT IT FOUND THAT IT HAD MADE AN ERROR IN ITS BID ON ITEM NO. 6 OF ORDER NO. NY 0- 1385. IT ALLEGED THAT ITS BID ON ITEM NO. 6 SHOULD HAVE BEEN AT $0.1484 FOR EACH PIECE AND A TOTAL OF $6,232.80 FOR THE 42,000 PIECES, AND THAT ITS TOTAL PRICE ON ITEMS NOS 2, 4 AND 6 SHOULD HAVE BEEN $7,782.08 INSTEAD OF $3,099.60 AS CARRIED ON THE ORDER. IT EXPLAINED IN DETAIL HOW THE ERROR OCCURRED AND SUBMITTED CONVINCING EVIDENCE THEREOF. THE CORPORATION STATED ALSO THAT ITS BID WAS SUBMITTED IN GOOD FAITH AND THAT IT WOULD PRODUCE ACCORDING TO THE TERMS THEREOF EVEN THOUGH IT WOULD RESULT IN A SEVERE FINANCIAL HANDICAP TO THE CORPORATION, BUT IT REQUESTED RECTIFICATION OF ITS ERROR, OR AN ADJUSTMENT WITHIN REASON OF THE DIFFERENCE BETWEEN ITS ORIGINAL BID OF $3,099.60 AND THE AMENDED TOTAL OF $7,782.08, A DIFFERENCE OF $4,682.48.

THE CONTRACTING OFFICER STATES THAT IT IS HIS OPINION THAT, SINCE THE POSSIBILITY OF ERROR ON ITEM NO. 6 WAS APPARENT TO THE GOVERNMENT CONTRACT ADMINISTRATOR BECAUSE THE UNIT PRICE BID BY THE CONTRACTOR WAS EXCEPTIONALLY LOW AS COMPARED TO THE PRICES OF OTHER BIDDERS ON THAT ITEM, THE ADMINISTRATOR SHOULD HAVE REQUESTED CONFIRMATION OF THE BID BY CALLING THE BIDDER'S ATTENTION SPECIFICALLY TO ITS LOW BID OF $1,549.80 ON ITEM NO. 6 RATHER THAN BY ASKING FOR A STRAIGHTFORWARD CONFIRMATION OF THE ENTIRE BID ON THE BASIS OF THE TOTAL PRICE OF $3,099.60 ON THE THREE ITEMS, NOS. 2, 4 AND 6. THE CONTRACTING OFFICER THEREFORE RECOMMENDS THAT RELIEF BE GRANTED ALLIED DECALS, INC., TO THE EXTENT OF ALLOWING AN INCREASE OF $4,435.20 IN THE CONTRACT PRICE, WHICH IS THE DIFFERENCE BETWEEN THE CONTRACTOR'S BID OF $1,549.80 AND THE NEXT LOW BID OF $5,985 ON THE ITEM, INSTEAD OF $4,683 REPRESENTING THE DIFFERENCE BETWEEN ITS BID PRICE AND ITS CORRECT PRICE ON THE ITEM, AS ALLEGED.

THE QUESTION HERE FOR CONSIDERATION IS WHETHER RELIEF MAY BE GRANTED ALLIED DECALS, INC., NOTWITHSTANDING THE FACT THAT VERIFICATION OF THE BID WAS REQUESTED AND RECEIVED BY THE PROCUREMENT OFFICE BEFORE AWARD OF THE CONTRACT.

GENERALLY, WHERE A BIDDER IS REQUESTED TO AND DOES VERIFY ITS BID THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942 AND 27 ID. 17.

IN THE INSTANT CASE, HOWEVER, SINCE THE GOVERNMENT AGENT AT THE TIME OF HIS REQUEST FOR VERIFICATION NOT ONLY SUSPECTED ERROR IN THE BID BUT ALSO SURMISED THAT THE ERROR WAS IN ITEM NO. 6 BUT DID NOT PUT THE BIDDER ON NOTICE SPECIFICALLY OF THAT FACT, AS THE CONTRACTING OFFICER LATER ADMITTED SHOULD HAVE BEEN DONE, THERE IS SOME DOUBT WHETHER THERE WAS A VALID ACCEPTANCE OF THE BID OF ALLIED DECALS, INC. SEE UNITED STATES V. METRO NOVELTY MANUFACTURING CO., INC., 125 F.SUPP. 713; B-128819, SEPTEMBER 10, 1956; B-129514, NOVEMBER 29, 1956.

THE AGGREGATE AMOUNT INTENDED TO BE BID BY THE CONTRACTOR FOR ITEM NO. 6 WAS $6,232.80, WHEREAS THE BID OF THE OTHERWISE LOW BIDDER FOR THAT ITEM WAS $5,985. ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT MAY BE MADE TO THE CONTRACTOR FOR THE SUPPLIES FURNISHED UNDER ITEM NO. 6 OF PURCHASE ORDER NO. NY 0-1385 ON THE BASIS OF THE LAST MENTIONED AMOUNT AS RECOMMENDED IN THE ABOVE-CITED REPORT.