B-163646, MAR. 5, 1968

B-163646, MAR. 5, 1968

CONTRACTS - MISTAKES - CANCELLATION DECISION TO G.S.A. APPROVING RESCISSION OF CONTRACT BETWEEN FEDERAL SUPPLY SERVICE AND ADVANCE ABRASIVE COMPANY BASED ON UNILATERAL MISTAKE IN BID FOR SHARPENING STONES INSTEAD OF ABRASIVE DISKS. THE LIST OF ITEMS IN THE SOLICITATION WAS MISLEADING AND MADE IT CONCEIVABLE THAT THE COMPANY PLACED ITS BID AMOUNT NEXT TO THE WRONG ITEM. SECONDLY, THE DISPARITY IN THE PRICE BID WITH THE PRICE OF OTHER BIDS RECEIVED AND WITH THE ESTABLISHED GSA UNIT PRICE WAS SO APPARENT AS TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF THE MISTAKE.

TO MR. KNOTT:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 23, 1968, WITH ENCLOSURES, FROM YOUR GENERAL COUNSEL, REQUESTING OUR DECISION ON WHETHER CONTRACT NO. GS-06S-0817 AWARDED TO THE ADVANCE ABRASIVES COMPANY MAY BE CANCELED BECAUSE OF AN ERROR MADE BY THE COMPANY IN ITS BID ON WHICH THE CONTRACT IS BASED.

THE FEDERAL SUPPLY SERVICE, KANSAS CITY, MISSOURI, BY SOLICITATION NO. K/W/01531/TE/CR/F SOLICITED BIDS FOR FURNISHING DEFINITE QUANTITIES OF (1) SHARPENING STONES, (2) ABRASIVE DISKS, (3) RUBBING COMPOUND, AND (4) ABRASIVE PAPER. THE BIDS WERE OPENED ON OCTOBER 5, 1967, AND THE ADVANCE ABRASIVES COMPANY SUBMITTED A BID OF $0.30 EACH ON ITEM 1 COVERING 5,000 SHARPENING STONES. THIS WAS THE ONLY ITEM ON WHICH THE ADVANCE ABRASIVES COMPANY SUBMITTED A BID. THE TWO OTHER BIDS ON ITEM 1 WERE IN THE AMOUNTS OF $0.48 AND $2.05 EACH. THE ADVANCE ABRASIVES COMPANY WAS AWARDED ITEM 1 ON OCTOBER 23, 1967.

BY LETTER DATED OCTOBER 26, 1967, THE ADVANCE ABRASIVES COMPANY ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE IN ITS BID IN THAT IT HAD INTENDED TO BID ON ITEM 2, STOCK NO. 5345-881-7596, ABRASIVE DISKS, BUT HAD MISTAKENLY BID ON ITEM 1, STOCK NO. 5345-576 9193, SHARPENING STONES. THE COMPANY STATED THAT IT HAS NEVER MANUFACTURED SHARPENING STONES AND COULD NOT DO SO AT THIS TIME. IN A LETTER DATED NOVEMBER 13, 1967, THE COMPANY STATED THAT THE MISTAKE IN ITS BID OCCURRED AS THE RESULT OF THE FORMAT OF THE SOLICITATION AND IT ALLEGED THAT THE PREPARER OF THE COMPANY'S BID BELIEVED THAT THE ENTRY ON PAGE 9 OF THE SOLICITATION,"ITEM NO. 1, STOCK NO. 5345-576 9193" REFERRED TO THE DESCRIPTION OF ABRASIVE SANDING DISKS WHICH FOLLOWED THAT ENTRY, RATHER THAN THE DESCRIPTION OF SHARPENING STONES WHICH PRECEDED IT. IN THIS CONNECTION, IT IS NOTED THAT THE DESCRIPTION OF ITEM 1, SHARPENING STONES, STARTS ON PAGE 8 OF THE SOLICITATION AND ENDS ON PAGE 9 THEREOF. IN ITS LETTER OF NOVEMBER 13, 1967, THE COMPANY STATES THAT IT IS CUSTOMARY TO GIVE THE BID ITEM NUMBER ON THE EXTREME LEFT HAND SIDE FOLLOWED BY THE FEDERAL STOCK NUMBER, THEN THE DESCRIPTION OF THE COMMODITY. IN SUPPORT OF THE FOREGOING CONTENTION, THE COMPANY SUBMITTED A COPY OF GSA INVITATION FOR BIDS NO. FPNTH-2E-56176-A-12-21-66, THE FORMAT OF WHICH SUBSTANTIATES ITS CONTENTION. THE COMPANY HAS REQUESTED THAT IT BE RELEASED FROM ITS CONTRACTUAL OBLIGATION TO FURNISH THE SHARPENING STONES COVERED BY ITEM 1 OF THE CONTRACT.

THE FORMAT OF THE BID, IN RESPECT TO THE TWO ITEMS IN QUESTION, WAS AS FOLLOWS:

"STONE, SHARPENING: IN ACCORDANCE WITH FEDERAL SPECIFICATIONSS-S-736B, DATED FEBRUARY 25, 1965. TYPE III, SLIPS, ROUND EDGE; CLASS B, NATURAL (NOVACULITE OR SIMILAR MATERIAL), HARD GRIT; SIZE 2, 3 INCHES LONG, 1-3/4 INCHES WIDE, 3/8 INCH THICK, 1/8 INCH THICKNESS OF THIN EDGE.

"PACKAGING AND PACKING SHALL BE IN ACCORDANCE WITH FEDERAL STANDARD STANDARD 102B, LEVEL C. 1 EACH STONE TO UNIT PACKAGE. 12 UNIT PACKAGES TO INTERMEDIATE PACKAGE. 6 INTERMEDIATE PACKAGES TO SHIPPING CONTAINER.

"MARKING: EACH UNIT AND INTERMEDIATE PACKAGE SHALL BE MARKED WITH THE FEDERAL STOCK NUMBER, NOMENCLATURE, QUANTITY, PURCHASE ORDER AND CONTRACT NUMBER. SHIPPING CONTAINERS SHALL BE MARKED IN ACCORDANCE WITH FEDERAL STANDARD 123. "1. 5345-576-9193 5000 EA ?30

DISK, ABRASIVE: IN ACCORDANCE WITH FEDERAL SPECIFICATION P-D-455A DATED JUNE 21, 1961 AND AMENDMENT 1 DATED DECEMBER 11, 1961. TYPE II - SYNTHETIC RESIN BOND, VULCANIZED FIBRE BACK, OR VULCANIZED FIBRE AND CLOTH BACK; CLASS 1 - ALUMINUM OXIDE, CLOSED COAT; WITH FOUR SLOTS; OUTSIDE DIAMETER 9-1/8 INCHES; 7/8 INCH ARBOR HOLE DIAMETER; GRIT SIZE 36.

PACKAGING AND PACKING SHALL BE IN ACCORDANCE WITH FEDERAL STANDARD 102B. 25 EACH DISKS TO UNIT PACKAGE, LEVEL C. 10 UNIT PACKAGES TO SHIPPING CONTAINER, LEVEL C.

MARKING: EACH UNIT AND INTERMEDIATE PACKAGE SHALL BE MARKED WITH THE FEDERAL STOCK NUMBER, NOMENCLATURE, QUANTITY, PURCHASE ORDER AND CONTRACT NUMBER. SHIPPING CONTAINERS SHALL BE MARKED IN ACCORDANCE WITH FEDERAL STANDARD 123. "2. 5345-881-7596 12000 EA "

WE AGREE WITH THE COMPANY THAT THE MANNER IN WHICH THE ITEMS WERE LISTED AND DESCRIBED IN THE SOLICITATION WAS MISLEADING AND SUBJECT TO POSSIBLE MISINTERPRETATION, MAKING IT ENTIRELY CONCEIVABLE THAT THE ADVANCE ABRASIVES COMPANY PLACED ITS BID AMOUNT NEXT TO ITEM 1 WHEN IT IN FACT INTENDED TO BID ON ITEM 2 ONLY. SEE B-154844, AUGUST 10, 1964, TO THE ADMINISTRATOR, VETERANS ADMINISTRATION.

IT IS REPORTED THAT THE COMPANY'S BID OF $0.30 EACH FOR ITEM 1 WAS $0.25 OR 45.5 PERCENT LOWER THAN THE GSA UNIT SELLING PRICE OF $0.55 AND $0.18 OR 37.5 PERCENT LESS THAN THE SECOND LOWEST BID OF $0.48 EACH. IN HIS REPORT OF JANUARY 12, 1968, THE CONTRACTING OFFICER STATES THAT THE DISPARITY BETWEEN THE PRICE QUOTED BY THE ADVANCE ABRASIVES COMPANY AND THE PRICES QUOTED BY THE OTHER BIDDERS AND WITH THE ESTABLISHED GSA UNIT SELLING PRICE WAS SO APPARENT AS TO HAVE CHARGED HIM WITH NOTICE OF THE PROBABILITY OF AN ERROR IN THE COMPANY'S BID. WE ALSO ARE OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID OF $0.30 EACH FOR ITEM 1 AND, CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

IN VIEW OF ALL THE CIRCUMSTANCES OF THIS CASE, WE AGREE THAT THE ADVANCE ABRASIVES COMPANY SHOULD NOT BE REQUIRED TO PERFORM THE CONTRACT. THEREFORE, THE CONTRACT MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.

THE DOCUMENTS SUBMITTED WITH THE LETTER OF FEBRUARY 23, 1968, ARE RETURNED, AS REQUESTED.