B-147842, FEB. 2, 1962

B-147842, FEB. 2, 1962

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 21, 1961, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (I AND L) INSTALLATIONS, REQUESTING A DECISION AS TO WHETHER THE RELIEF SOUGHT BY THE VULCAN STEEL TANK CORPORATION UNDER CONTRACT NO. DA-40-058-CIVENG-62-7 MAY BE GRANTED.

THE U.S. ARMY ENGINEER DISTRICT, NASHVILLE, CORPS OF ENGINEERS, NASHVILLE, TENNESSEE, BY INVITATION NO. CIVENG-40-058-62-5 REQUESTED BIDS FOR FURNISHING STEEL FENDERS FOR UPPER AND LOWER LOCK GATES, BARKLEY LOCK, CUMBERLAND RIVER, IN ACCORDANCE WITH THE GOVERNMENT'S SPECIFICATIONS AND DRAWING NO. Q9-21/17. THE STEEL FENDERS WERE REQUIRED TO BE DELIVERED WITHIN 60 DAYS AFTER RECEIPT BY THE CONTRACTOR OF A CONTRACT DULY ACCEPTED BY THE CONTRACTING OFFICER. IN RESPONSE THE VULCAN STEEL TANK CORPORATION SUBMITTED A BID OFFERING TO FURNISH THE STEEL FENDERS FOR THE LUMP SUM OF $8,682. THE FIVE OTHER BIDS ON THE STEEL FENDERS WERE IN THE AMOUNTS OF $9,297, $17,990, $19,853, $20,410 AND $24,403.

UPON BEING REQUESTED BY TELEGRAM DATED SEPTEMBER 7, 1961, TO VERIFY ITS BID, THE VULCAN STEEL TANK CORPORATION ADVISED BY TELEGRAM OF THE SAME DATE THAT ITS BID PRICE OF $8,682 FOR THE STEEL FENDERS WAS CORRECT. SEPTEMBER 8, 1961, THE BID OF THE CORPORATION WAS ACCEPTED.

IN HIS REPORT OF OCTOBER 13, 1961, THE CONTRACTING OFFICER STATES THAT ON SEPTEMBER 18, 1961, MR. JAMES L. MCNAMAR, VICE PRESIDENT OF THE VULCAN STEEL TANK CORPORATION, TELEPHONED STATING THAT HE WAS HAVING DIFFICULTY IN DETERMINING THE QUANTITIES REQUIRED UNDER THE CONTRACT; THAT IN THE ENSUING CONVERSATION, IT WAS DISCLOSED THAT THE BID OF THE CORPORATION WAS BASED ON QUANTITIES DEPICTED BY THE GATE VIEWS SHOWN ON THE LEFT-HAND SIDE OF CONTRACT DRAWING NO. Q9-21/17 WITHOUT REGARD TO THE "REQUIRED LIST" SHOWN ON THE UPPER RIGHT-HAND PORTION OF THE DRAWING; AND THAT ON THIS BASIS, THE CORPORATIONS' BID PRICE WOULD COVER ONLY ONE-HALF OF THE REQUIREMENTS SINCE THERE ARE TWO UPPER GATE LEAVES AND TWO LOWER GATE LEAVES WHEREAS ONLY ONE UPPER GATE LEAF AND ONE LOWER GATE LEAF ARE DEPICTED ON THE DRAWING.

BY LETTER DATED SEPTEMBER 20, 1961, THE VULCAN STEEL TANK CORPORATION REQUESTED THAT THE CONTRACT PRICE OF THE STEEL FENDERS BE INCREASED BY $6,940 FROM $8,682 TO $15,622 TO COVER THE COST OF THE OMITTED STEEL FENDERS. WITH ITS LETTER THE CORPORATION SUBMITTED ITS NOTARIZED ORIGINAL WORKSHEET. THE CONTRACTING OFFICER REPORTS THAT THE QUANTITIES SHOWN ON THE WORKSHEET IN THE COLUMN HEADED "PCS" REFLECT ONLY ONE-HALF OF THE QUANTITIES REQUIRED BY THE INVITATION. IT WAS ALSO STATED THAT AFTER THE VULCAN STEEL TANK CORPORATION ALLEGED THAT IT HAD MISINTERPRETED THE SPECIFICATIONS, THE NEXT LOWEST BIDDER, THE GULFPORT SHIPBUILDING CORPORATION, WAS REQUESTED TO VERIFY THE BASIS ON WHICH ITS BID PRICE WAS COMPUTED. BY LETTER DATED SEPTEMBER 19, 1961, THE GULFPORT SHIPBUILDING CORPORATION, THE SECOND LOWEST BIDDER, ADVISED THE CONTRACTING OFFICER THAT IT HAD MISINTERPRETED THE PLANS AND SPECIFICATIONS TO THE EXTENT THAT IT FIGURED ONLY HALF OF THE NECESSARY QUANTITIES OF MATERIAL.

IN A LETTER DATED OCTOBER 4, 1961, THE VULCAN STEEL TANK CORPORATION STATED THAT ALL MATERIALS FOR THE TWO UPPER AND THE TWO LOWER LOCK GATES HAD BEEN PURCHASED AND THAT UPON RECEIPT OF THIS MATERIAL AND RECEIPT OF THE CORPORATION'S APPROVED SHOP DETAIL DRAWING NO. D-924-61, IT WOULD START WITH THE FABRICATION OF THE REQUIRED FENDERS COVERED BY THE CONTRACT; AND THAT IT WOULD DO ITS VERY BEST TO MAKE SHIPMENT OF THESE UNITS WITHIN THE REQUESTED 60-DAY PERIOD. WITH ITS LETTER, THE CORPORATION SUBMITTED AN ESTIMATE SHEET WHICH SHOWS A BREAKDOWN OF THE REQUESTED INCREASE OF $6,940 IN THE CONTRACT PRICE OF THE STEEL FENDERS.

IN HIS REPORT THE CONTRACTING OFFICER STATES THAT THE FACT THAT THE SECOND LOWEST BIDDER ALSO MADE A MISTAKE SIMILAR TO THE MISTAKE MADE BY THE VULCAN STEEL TANK CORPORATION INDICATES A POSSIBLE LACK OF CLARITY OR A POSSIBLE AMBIGUITY IN THE SPECIFICATIONS. THE VULCAN STEEL TANK CORPORATION ALLEGES THAT IT DID NOT RECEIVE COPIES OF REFERENCE DRAWINGS NOS. Q9-21/3.1 AND Q9-21/5.1, WHICH DRAWINGS SUPPLEMENTED BASIC DRAWING NO. Q9-21/17.

WE ARE OF THE OPINION THAT THE MANNER IN WHICH THE SPECIFICATIONS IN THE PRESENT CASE WERE DRAWN UP WAS TO SOME DEGREE MISLEADING AND SUBJECT TO POSSIBLE MISINTERPRETATION, WHICH IS EVIDENCED BY THE FACT THAT THE SECOND LOWEST BIDDER MADE THE SAME TYPE OF ERROR AS MADE BY THE VULCAN STEEL TANK CORPORATION. IN THE CIRCUMSTANCES, THE CORPORATION SHOULD NOT BE REQUIRED TO FURNISH THE REQUIRED STEEL FENDERS AT THE PRICE QUOTED IN ITS BID.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS LITTLE ROOM FOR DOUBT THAT THE VULCAN STEEL TANK CORPORATION MADE A BONA FIDE ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, IN VIEW OF THE RECORD INDICATING THAT THE PRICE QUOTED BY THE SECOND LOWEST BIDDER ON THE STEEL FENDERS IS ALSO ERRONEOUS, PAYMENT IS AUTHORIZED TO BE MADE TO THE VULCAN STEEL TANK CORPORATION FOR THE QUANTITY OF STEEL FENDERS DELIVERED UNDER THE CONTRACT AT A LUMP SUM PRICE OF $15,622, WHICH PRICE IS STILL LOWER THAN THE PRICE SHOWN IN THE NEXT LOWEST CORRECT BID THEREON.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHER OR VOUCHERS COVERING PAYMENT FOR THE STEEL FENDERS.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT DATED OCTOBER 13, 1961, ARE RETURNED.