B-156376, APR. 9, 1965

B-156376, APR. 9, 1965

TO THE HONORABLE JAMES L. HARRISON, PUBLIC PRINTER:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 22, 1965, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE PROCESS DISPLAYS COMPANY, MINNEAPOLIS, MINNESOTA, TO HAVE BEEN MADE IN ITS BID ON WHICH PURCHASE ORDER NO. 48375 WAS AWARDED.

THE GOVERNMENT PRINTING OFFICE REQUESTED BIDS UNDER JACKET NO. 763 007 FOR THE PRODUCTION OF 20,000 POSTERS, SIZE 19 1/8 INCHES TIMES 24 1/2 INCHES, THE PRINTING TO BE PERFORMED BY THE SILK SCREEN PROCESS IN BLACK, PINK, AND RED PLASTIC BASE SCREEN PROCESS PASTES ON WHITE ELASTOMERIC PIGMENTED FILM, EQUAL TO MINNESOTA MINING AND MANUFACTURING COMPANY'S NO. 3650 WHITE PLASTIC FILM. ALL MATERIALS TO BE USED IN THE MANUFACTURE OF THE POSTERS WERE REQUIRED TO BE IN STRICT CONFORMITY WITH MILITARY SPECIFICATIONS MIL-D-8634B, DATED AUGUST 14, 1961, INCLUDING ANY AMENDMENTS THERETO.

TEN BIDS WERE RECEIVED AND OPENED ON FEBRUARY 25, 1965. THE LOWEST BID IN THE AMOUNT OF $11,445 WAS SUBMITTED BY PROCESS DISPLAYS COMPANY AND THE SECOND LOWEST BID IN THE AMOUNT OF $12,853 WAS SUBMITTED BY CONTEK, INC. THE EIGHT OTHER BIDS RANGED FROM $30,200 TO $58,000. THE BID OF PROCESS DISPLAYS COMPANY WAS ACCEPTED ON FEBRUARY 25, 1965, AND ON THE FOLLOWING DAY PURCHASE ORDER NO. 48375 WAS ISSUED TO THE COMPANY.

THE RECORD INDICATES THAT ON MARCH 1, 1965, THE CONTRACTING OFFICER RECEIVED A TELEPHONE CALL FROM MR. BURNS, THE LOCAL REPRESENTATIVE OF THE MINNESOTA MINING AND MANUFACTURING COMPANY, REQUESTING INFORMATION AS TO WHICH COMPANY HAD BEEN AWARDED THE CONTRACT FOR THE POSTERS AND THAT WHEN MR. BURNS WAS INFORMED THAT PROCESS DISPLAYS COMPANY HAD RECEIVED THE AWARD ON THE BASIS OF ITS BID PRICE OF $11,445, HE REPLIED THAT THE MATERIALS ALONE ON THIS ORDER WOULD COST MORE THAN TWICE THE AMOUNT OF THE COMPANY'S BID PRICE.

YOU STATE THAT SINCE THE MATERIALS CALLED FOR IN THE SPECIFICATIONS MUST BE EQUAL TO MATERIALS FURNISHED BY THE MINNESOTA MINING AND MANUFACTURING COMPANY, THE CONTRACTING OFFICER DECIDED TO PREPARE AN ESTIMATE OF THE COST OF THE MATERIALS REQUIRED TO PERFORM THIS PARTICULAR JOB; THAT HE FOUND THAT THE COST OF THE MATERIAL IDENTIFIED IN THE CONTRACT AS BEING EQUAL TO MINNESOTA MINING AND MANUFACTURING COMPANY'S NO. 3650 WHITEPLASTIC FILM WOULD COST A MINIMUM OF $23,842.50, WHICH AMOUNT DOES NOT INCLUDE A COST FOR NECESSARY SPOILAGE AND MARKUP FOR THE HANDLING CHARGE, AND THAT THE PRICE USED IN OBTAINING THIS COST WAS TAKEN FROM THE PRICE LIST UNDER GSA-FSS CONTRACT NO. GS-OOS-52244.

UPON BEING REQUESTED TO REVIEW THE SPECIFICATIONS AND CONFIRM THEIR BID PRICES, BOTH PROCESS DISPLAYS COMPANY AND THE NEXT LOWEST BIDDER, CONTEK, INC., ADVISED THE CONTRACTING OFFICER THAT THEY HAD MADE ERRORS IN THEIR BIDS. BY LETTER DATED MARCH 1, 1965, CONTEK, INC., THE SECOND LOWEST BIDDER, ADVISED THAT THE BASIC MATERIAL IT INTENDED USING IN THE PERFORMANCE OF THE JOB DOES NOT CONFORM TO SPECIFICATION MIL-D-8634B, DATED AUGUST 14, 1961.

BY LETTER DATED MARCH 1, 1965, PROCESS DISPLAYS COMPANY ADVISED THAT AN ERROR WAS MADE ON ITS ESTIMATE SHEET AND THAT ITS BID PRICE FOR THE JOB SHOULD HAVE BEEN $47,395 INSTEAD OF $11,445. IN A LETTER DATED MARCH 8, 1965, THE COMPANY STATED THAT IT HAD MADE AN ERROR IN LISTING ON ITS ESTIMATE SHEET THE COST OF THE STOCK AS $3,300 INSTEAD OF $33,000 AND THAT TO THE LATTER AMOUNT THERE SHOULD BE ADDED $5,950 FOR SPOILAGE AND MARKUP. WITH ITS LETTER THE COMPANY SUBMITTED ITS ESTIMATE SHEET WHICH SHOWS THE COST OF THE REQUIRED STOCK AS $3,300.

YOU STATE THAT UPON RECEIPT OF THE INFORMATION FROM PROCESS DISPLAYS COMPANY, THE CONTRACTING OFFICER COMPARED THE TWO LOW BIDS RECEIVED UNDER THIS INVITATION FOR BIDS WITH THE PRICES RECEIVED ON AN EARLIER INVITATION FOR BIDS AND THAT HE FOUND THAT ON THE PREVIOUS PURCHASE THE GOVERNMENT PRINTING OFFICE PAID A PRICE OF $945 PER THOUSAND FOR A TOTAL QUANTITY OF 165,000 POSTERS AS COMPARED TO THE $569 PER THOUSAND IT WOULD PAY PROCESS DISPLAYS COMPANY UNDER THE CONTRACT IN QUESTION WHICH CALLED FOR DELIVERY OF ONLY 20,000 POSTERS. YOU ALSO STATE THAT THE CONTRACTING OFFICER REALIZES THAT HE SHOULD HAVE BEEN COGNIZANT OF THE ERROR BEFORE AWARDING A CONTRACT TO PROCESS DISPLAYS COMPANY, BUT AT THE TIME OF AWARD HE FAILED TO MAKE A COMPARATIVE ESTIMATE BECAUSE OF THE PRESSURE OF WORK. THE RECORD INDICATES THAT HAD THE CONTRACTING OFFICER MADE A COMPARATIVE ESTIMATE, HE WOULD HAVE QUESTIONED THE PRICE QUOTED BY PROCESS DISPLAYS COMPANY IN ITS BID PRIOR TO ITS ACCEPTANCE.

IN VIEW OF THESE CIRCUMSTANCES, THE AWARD INVOLVED MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE COMPANY'S LETTERS OF MARCH 1 AND 8, 1965, AND ITS ESTIMATE SHEET, ARE RETURNED.