B-155103, OCT. 29, 1964

B-155103, OCT. 29, 1964

TO THE HONORABLE BERNARD L. BOUTIN, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF SEPTEMBER 2, 1964, SUBMITTING FOR OUR CONSIDERATION A REQUEST BY CHRYSLER MOTORS CORPORATION FOR RELIEF FROM A MISTAKE MADE BY IT IN PREPARATION OF ITS OFFER BUT NOT ALLEGED UNTIL AFTER THE CONTRACT HAD BEEN AWARDED AND PERFORMANCE HAD COMMENCED.

ON DECEMBER 11, 1963, THE PROCUREMENT OPERATIONS DIVISION, FEDERAL SUPPLY SERVICE, GENERAL SERVICES ADMINISTRATION, ISSUED A SOLICITATION FOR OFFERS FOR SIX (6) TRUCKS REQUIRED BY THE PEACE CORPS FOR THE REPUBLIC OF GABON. THE TRUCKS WERE TO BE DODGE TRUCKS IDENTICAL TO THOSE PREVIOUSLY PROCURED UNDER ANOTHER GSA CONTRACT FOR THE PEACE CORPS FOR GABON. HOWEVER, IN THE INSTANT CASE, IN ADDITION TO THE SPARE PARTS REQUIRED AS RECOMMENDED BY THE MANUFACTURER AND TO BE LATER INCLUDED IN THE CONTRACT BY AN AMENDMENT, THE FOLLOWING SPECIAL PARTS WERE REQUIRED FOR EACH VEHICLE: TWO (2) COMPLETE SETS OF TIRES, TWO (2) CARBURETORS, TWO (2) COMPLETE SETS OF SPRINGS PLUS MAIN LEAVES AND TWO (2) FUEL PUMPS. TO ENSURE PROMPT DELIVERY OF THESE PARTICULAR PARTS, THEY WERE INCORPORATED INTO THE UNIT DESCRIPTION FOR EACH TRUCK, AND REQUIRED TO BE SUPPLIED AND SHIPPED WITH EACH VEHICLE. THE COST OF THESE PARTICULAR PARTS WAS TO BE INCLUDED IN THE PRICE QUOTED FOR EACH VEHICLE.

ON DECEMBER 27, 1963, A PROPOSAL WAS RECEIVED FROM CHRYSLER MOTORS CORPORATION. AFTER REVIEW AND APPROVAL BY THE GSA/FSS REVIEW TEAM, AWARD WAS MADE TO CHRYSLER MOTORS CORPORATION ON JANUARY 13, 1964, IN THE AMOUNT OF $23,106.26. BY LETTER DATED JUNE 11, 1964, CHRYSLER MOTORS CORPORATION ADVISED THAT AN ERROR HAD BEEN IN ITS OFFER, IN THAT, THROUGH OVERSIGHT AND MISINTERPRETATION OF THE REQUIREMENTS, THE COST OF THE SPECIAL PARTS DESCRIBED ABOVE WAS NOT INCLUDED IN THE UNIT VEHICLE PRICES. IT WAS STATED THAT ITS PRICE ANALYSIS DEPARTMENT ASSUMED THAT ALL PARTS WOULD BE PRICED AFTER AWARD AND HANDLED IN THE USUAL MANNER. CHRYSLER REQUESTED RELIEF IN CONNECTION WITH THE OMITTED PARTS, IN THE TOTAL AMOUNT OF $7,081.60.

THE RECORD SHOWS THAT AFTER RECEIPT OF THE CONTRACTOR'S LETTER ALLEGING MISTAKE, A COMPLETE REVIEW OF THE MATTER DISCLOSED THAT THE VEHICLE PRICES QUOTED, PRESUMABLY INCLUDING THE SPECIAL PARTS REQUIRED, WERE LOWER THAN THE PRICES PREVIOUSLY QUOTED FOR THE SAME TYPE VEHICLES WITHOUT THE SPECIAL PARTS. A REVIEW OF THE CONTRACTOR'S WORK SHEETS AND PRICE BULLETIN SHOWED THAT THE BASIC VEHICLE PRICES, PLUS SPECIAL FACTORY INSTALLED EQUIPMENT AND INLAND FREIGHT COSTS ADD UP TO THE UNIT PRICES QUOTED. THE SPARE PARTS PRICES CHECK OUT WITH THE DEALER NET PRICES PLUS 5 PERCENT EXPORT PACKING CHARGE IN ACCORDANCE WITH CURRENT FSS CONTRACT GS -OOS-49176 WITH CHRYSLER MOTORS CORPORATION FOR SPARE PARTS. HOWEVER, THE TIRE PRICES REFLECTED IN THE CONTRACTOR'S DATA ARE SOMEWHAT HIGHER THAN GSA TIRE SCHEDULE PRICES.

IN VIEW OF THE CIRCUMSTANCES, YOU STATE THAT IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF AN ERROR IN THE PROPOSAL. IT IS RECOMMENDED THAT GSA BE PERMITTED TO REIMBURSE THE CONTRACTOR FOR THE SPARE PARTS ON A QUANTUM VALEBAT BASIS, AT PRICES NOT TO EXCEED THE CURRENT FS SCHEDULE PRICES, AND FOR THE SPARE TIRES A PRICE NOT TO EXCEED THE CURRENT FS SCHEDULE TIRE PRICES, AND THAT THE CONTRACT BE REFORMED TO INCORPORATE THE CHANGE IN PRICES, SINCE DELIVERIES UNDER THE CONTRACT HAVE NOT BEEN COMPLETED.

WE AGREE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE AS TO POSSIBILITY OF AN ERROR IN THE PROPOSAL AND APPARENTLY HE WOULD HAVE BEEN EXCEPT THE REVIEW TEAM MADE THE SAME ERROR THAT THE CONTRACTOR MADE IN BELIEVING THAT THE SPECIAL SPARE PARTS WERE ALSO TO BE PRICED SEPARATELY. ACCORDINGLY, THE CONTRACT INVOLVED MAY BE REFORMED TO REIMBURSE THE CONTRACTOR FOR THE SPECIAL SPARE PARTS, AS RECOMMENDED BY YOU.