B-145540, APR. 28, 1961

B-145540, APR. 28, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED APRIL 4, 1961, WITH ENCLOSURES, FROM THE CHIEF, CONTRACTS DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE BAUGHMAN COMPANY TO HAVE BEEN MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 10624 IS BASED.

THE ADJUTANT GENERAL'S OFFICE, PUBLICATIONS BRANCH, PROCUREMENT SECTION, WASHINGTON, D.C., BY INVITATION NO. AG-49-092-61-26 REQUESTED BIDS FOR FURNISHING 400,000 BOOKKEEPING MACHINE FORMS, PRINTED "DA FORM 1138, 1 DEC 60, INDIVIDUAL PAY RECORD.' THE SPECIFICATIONS REQUIRED THAT 25 PERCENT RAG STOCK BE USED IN THE MANUFACTURE OF THE FORMS. IN RESPONSE THE BAUGHMAN COMPANY SUBMITTED A BID OFFERING TO FURNISH THE FORMS AT A PRICE OF $13.10 PER THOUSAND OR A TOTAL PRICE OF $5,240. THE NINE OTHER BIDS ON THE FORMS RANGED FROM $15.14 TO $31.40 PER THOUSAND.

IN HIS REPORT, IN WHICH HE RECOMMENDED CANCELLATION OF THE CONTRACT, THE CONTRACTING OFFICER STATED THAT AT THE TIME THE BIDS WERE EXAMINED THE POSSIBILITY OF AN ERROR IN THE BID OF THE BAUGHMAN COMPANY WAS DISCUSSED, BUT THAT VERIFICATION OF THE COMPANY'S BID WAS NOT REQUESTED BECAUSE THE COMPANY WAS CONSIDERED AS BEING EXPERIENCED IN BIDDING ON GOVERNMENT PRINTING REQUIREMENTS AND SINCE THERE WAS AN URGENT REQUIREMENT FOR THE FORMS. THE BID OF THE BAUGHMAN COMPANY WAS ACCEPTED ON FEBRUARY 7, 1961. IT WAS FURTHER STATED THAT ON FEBRUARY 13, 1961, MR. RALPH E. SPRING OF THE BAUGHMAN COMPANY TELEPHONED ALLEGING THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT ITS BID PRICE WAS BASED ON FURNISHING SULPHITE STOCK INSTEAD OF 25 PERCENT RAG STOCK AS REQUIRED; THAT MR. SPRING STATED THAT HE USUALLY CHECKED AND SIGNED THE COMPANY'S BID BUT THAT HE HAD BEEN AWAY FROM THE OFFICE FOR SEVERAL WEEKS DUE TO ILLNESS. MR. SPRING FURTHER STATED THAT HE WAS UNAWARE THAT THE COMPANY WAS THE LOW BIDDER ON THE FORMS.

IN A CONFIRMING LETTER DATED FEBRUARY 21, 1961, THE COMPANY STATED THAT THE REGULAR LEDGER PAPER ON WHICH ITS BID PRICE WAS BASED WOULD COST $17.30 PER HUNDRED POUNDS AND THAT THE REQUIRED 25 PERCENT RAG LEDGER PAPER WOULD COST $32 PER HUNDRED POUNDS; AND THAT IF THE COMPANY WAS REQUIRED TO FURNISH THE 25 PERCENT RAG LEDGER PAPER AT ITS ORIGINAL BID PRICE IT WOULD OCCASION AN ACTUAL CASH LOSS OF APPROXIMATELY $3,000. THE COMPANY REQUESTED THAT THE CONTRACT BE CANCELED. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ESTIMATE SHEET AND COPIES OF QUOTATIONS RECEIVED FROM ITS SUPPLIER ON THE REGULAR LEDGER PAPER AND THE 25 PERCENT RAG LEDGER PAPER. THE COMPANY HAS INDICATED ON ITS ESTIMATE SHEET THAT THE REVISED TOTAL PRICE FOR FORMS MADE OF THE REQUIRED PAPER WOULD BE $8,112.32.

ON THE RECORD, THERE IS NO ROOM FOR DOUBT THAT THE COMPANY'S BID PRICE WAS BASED ON THE WRONG TYPE OF PAPER. IN HIS REPORT THE CONTRACTING OFFICER FURTHER STATES THAT HE SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF THE ERROR IN THE BID OF THE BAUGHMAN COMPANY, SINCE THE COMPANY'S BID WAS BELOW THE GOVERNMENT ESTIMATE OF $14 TO$19 PER THOUSAND. IT IS REPORTED THAT NO WORK HAS BEEN DONE UNDER THE CONTRACT. ACCORDINGLY, SINCE IT APPEARS THAT THE COMPANY WOULD HAVE BEEN REQUESTED TO VERIFY ITS BID HAD NOT THERE BEEN AN URGENT REQUIREMENT FOR THE FORMS AND SINCE IT WOULD BE INEQUITABLE TO REQUIRE THE COMPANY TO FURNISH THE FORMS AT ITS ORIGINAL BID PRICE, THE ..END :