B-147715, DEC. 21, 1961

B-147715, DEC. 21, 1961

TO MR. GRANT BLOODGOOD, ASSISTANT COMMISSIONER AND CHIEF ENGINEER, BUREAU OF RECLAMATION, DEPARTMENT OF THE INTERIOR:

REFERENCE IS MADE TO YOUR LETTER OF NOVEMBER 30, 1961, FILE D-150, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH REGARD TO THE BID OF STANDARD TRANSFORMER COMPANY SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. DS-5660 ISSUED AUGUST 31, 1961.

THE INVITATION REQUESTED BIDS--- TO BE OPENED OCTOBER 3, 1961--- FOR FURNISHING A POWER TRANSFORMER. ELEVEN BIDS WERE RECEIVED. THE AMOUNTS OF THE BIDS, AFTER CONSIDERING FOR PURPOSES OF COMPARISON COST FACTORS FOR ERECTING ENGINEER'S SERVICES, EVALUATIONS FOR PERFORMANCE LOSSES AND DIFFERENTIALS FOR FOREIGN SOURCE PRODUCTS, RANGED FROM A LOW OF $16,375 FOR THE BID OF STANDARD TRANSFORMER COMPANY TO A HIGH OF $40,664.20. THE SECOND LOW BID AMOUNT WAS $19,167.60. THE GOVERNMENT ENGINEER'S ESTIMATE WAS $17,000.

PAGE G OF THE BIDDING SCHEDULE REQUIRED EACH BIDDER TO STATE AND WARRANT THE MAXIMUM OF THE NO-LOAD KILOWATT LOSSES AND THE TOTAL KILOWATT LOSSES CHARACTERISTIC OF THE PERFORMANCE OF THE POWER TRANSFORMER OFFERED. PARAGRAPH B-3 OF SPECIAL REQUIREMENTS PROVIDED THAT FOR COMPARISON OF BIDS ALL SUCH WARRANTED LOSSES WOULD BE EVALUATED. THE TOTAL LOSSES, PERTINENT TO THIS DISCUSSION, WERE TO BE EVALUATED AT $61 FOR EACH ONE-TENTH OF ONE KILOWATT. FURTHERMORE, PARAGRAPH B-12.B/1) OF THESE REQUIREMENTS PROVIDED THAT IF THE TOTAL LOSSES OF THE POWER TRANSFORMER ACTUALLY FURNISHED SHOULD EXCEED THE LOSSES WARRANTED, THE CONTRACT PRICE WOULD BE REDUCED BY AN AMOUNT COMPUTED ON THE BASIS OF THE RATES PROVIDED FOR BID COMPARISON PURPOSES ON ACCOUNT OF SUCH WARRANTED LOSSES.

STANDARD'S BID WARRANTED THAT THE TOTAL LOSSES OF THE POWER TRANSFORMER THAT IT PROPOSED TO FURNISH WOULD NOT EXCEED 25.24 KILOWATTS. HOWEVER, AFTER THE OPENING OF BIDS, OR ON OCTOBER 9, 1961, STANDARD ADVISED BY LETTER, AS WELL AS BY TELEGRAM, THAT IT HAD MADE A MISTAKE IN WARRANTING THE TOTAL LOSSES AS 25.24 KILOWATTS AND THAT THE BID SHOULD BE CORRECTED TO SHOW THE TOTAL LOSSES AS 35.34 KILOWATTS. IN SUBSTANTIATION OF THE ALLEGED MISTAKE STANDARD SUBMITTED WITH ITS LETTER OF NOVEMBER 6, 1961, THE DESIGN SHEET USED IN COMPUTING THE TOTAL LOSSES WHICH TENDS TO ESTABLISH THAT THE LOSSES WERE CALCULATED AT THE NORMAL KV.-A RATING OF 2,500 RATHER THAN AT THE OVERLOAD RATING OF 3,125 KV.-A AS REQUIRED BY THE SPECIFICATIONS. IN THE LETTER IT REQUESTED THAT IF CORRECTION WAS NOT PERMISSIBLE, THEN IT WISHED ITS BID TO BE WITHDRAWN.

ALTHOUGH YOU STATE THAT THE INFORMATION AVAILABLE TO YOU DURING THE EVALUATION OF BIDS GAVE YOU NO INDICATION OF ANY ERROR, YOU HAVE NO REASON TO DOUBT THAT STANDARD ACTUALLY ERRED SUBSTANTIALLY IN WARRANTING THE TOTAL LOSSES TO BE NOT IN EXCESS OF 25.24 KILOWATTS. IF STANDARD ACTUALLY INTENDED TOTAL LOSSES WERE TO BE CONSIDERED AS NOT IN EXCESS OF 35.34 KILOWATTS AND IF ITS BID WAS TO BE EVALUATED ON THIS BASIS, THE BID WOULD NO LONGER BE THE LOW BID BECAUSE THE AMOUNT OF THE BID FOR COMPARISON PURPOSES WOULD BE INCREASED TO $21,180.40.

SINCE ERROR WAS ALLEGED BEFORE AWARD AND SINCE THE EVIDENCE OF RECORD REASONABLY ESTABLISHES THAT AN ERROR WAS IN FACT MADE, THE BID OF STANDARD TRANSFORMER COMPANY SHOULD BE DISREGARDED IN MAKING AWARD.