B-165251, OCT. 9, 1968

B-165251, OCT. 9, 1968

TO MR. HARRISON:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 11, 1968, WITH ENCLOSURES, REQUESTING A DECISION ON THE REQUEST OF PRINCE PRINTING FOR RELIEF FROM AN ASSESSMENT OF EXCESS COSTS IN THE AMOUNT OF $65.06 ON ACCOUNT OF THAT COMPANY'S DEFAULT UNDER PURCHASE ORDER 53234, JACKET NO. 290-117, DATED MARCH 4, 1968. WE ALSO HAVE A LETTER DATED SEPTEMBER 17, 1968, TRANSMITTING ADDITIONAL PAPERS IN THIS MATTER.

ON FEBRUARY 16, 1968, THE GOVERNMENT PRINTING OFFICE (GPO) ADVERTISED FOR PRICES ON THE PRODUCTION OF 50,100 PRINTED FORMS (ALIEN REGISTRATION FINGERPRINT CHARTS) PLUS OR MINUS 1 PERCENT. THE SPECIFICATIONS REQUIRED BIDDERS TO FURNISH WHITE INDEX PAPER EQUAL TO GPO LOT 182 AND TO QUOTE PRICES F.O.B. DESTINATION.

YOU REPORT THAT THE EIGHT BIDS RECEIVED WERE OPENED ON FEBRUARY 29, 1968, AND RANGED IN PRICE FROM A LOW BID OF $225 BY PRINCE PRINTING, CLAIRTON, PENNSYLVANIA, TO A HIGH BID OF $775. THE SECOND LOW BID SUBMITTED WAS FOR $287 BY THE MAURICE MEYER COMPANY, BALTIMORE, MARYLAND. BY LETTER DATED MARCH 4, 1968, MR. JOSEPH E. PRINCE, OWNER OF PRINCE PRINTING, CONFIRMED THAT SHIPPING COSTS WERE INCLUDED IN HIS QUOTATION, AND AWARD WAS THEN MADE TO PRINCE PRINTING UNDER PURCHASE ORDER 53234,DATED MARCH 4, 1968.

THE RECORD SHOWS THAT ON MARCH 6, 1968, MR. PRINCE CONFIRMED IN WRITING A TELEPHONE CALL OF THAT DATE TO THE GOVERNMENT PRINTING OFFICE WHEREIN HE DECLARED HIMSELF IN DEFAULT BECAUSE HE FAILED TO INTERPRET THE SPECIFICATIONS CORRECTLY. BY LETTER DATED MARCH 8, 1968, YOUR DIRECTOR OF PURCHASES ADVISED MR. PRINCE THAT HE WAS IN DEFAULT ON THE CONTRACT UNDER ARTICLE 18, UNITED STATES GOVERNMENT PRINTING OFFICE CONTRACT TERMS NO. 1, WHICH WAS A PART OF THE CONTRACT. THE LETTER STATED THAT THE DEFAULT ACTION WAS TAKEN AT MR. PRINCE'S REQUEST AND HE WAS ALSO ADVISED THAT ALL EXCESS COST INCURRED BY REASON OF THE DEFAULT ACTION WOULD BE CHARGED TO HIM. ON THE SAME DAY, MARCH 8, 1968, AWARD WAS MADE TO THE SECOND LOW BIDDER, MAURICE MEYER COMPANY, AT THE QUOTED PRICE OF $287.

THEREAFTER, ON AUGUST 13, 1968, YOUR OFFICE FORWARDED BILL NO. 10 FOR THE EXCESS COST INCURRED OF $65.06 TO MR. PRINCE, WHO BY LETTER OF AUGUST 26, 1968, REQUESTED RELIEF FROM SUCH EXCESS COST. MR. PRINCE EXPLAINED THAT HE HAD A SMALL SHOP WITH ONLY ONE HELPER, AND THAT THIS WAS HIS FIRST EXPERIENCE WITH GOVERNMENT WORK AND IT WAS NOT UNTIL YOUR ORDER HAD BEEN RECEIVED THAT HE REALIZED HE WAS TO FURNISH THE PAPER STOCK REQUIRED. FURTHER EXPLAINED THAT, ON CHECKING WITH HIS PAPER SUPPLIER, HE FOUND THAT HIS BID ALMOST EQUALED THE COST OF THE PAPER ALONE. REALIZING THAT HE WOULD NOT BE ABLE TO FULFILL THE CONTRACT, HE IMMEDIATELY TELEPHONED THE GOVERNMENT PRINTING OFFICE TO ADVISE OF THE ERROR, ADMITTING THAT HAD HE BEEN MORE OBSERVANT HE WOULD HAVE SEEN THE CHECK MARK ON THE SPECIFICATIONS INDICATING THAT THE CONTRACTOR WAS TO FURNISH THE PAPER REQUIRED.

IT IS STATED THAT WHEN THE TRANSACTION WAS REVIEWED IN THE LIGHT OF MR. PRINCE'S LETTER OF AUGUST 26, YOUR DIRECTOR OF PURCHASES NOTED THAT PRINCE'S BID PROBABLY SHOULD HAVE BEEN QUESTIONED BEFORE AWARD BECAUSE THE SECOND LOW BID WAS APPROXIMATELY 28 PERCENT HIGHER. IN THIS CONNECTION, WE NOTE FROM THE RECORD THAT THE EIGHT BIDS SUBMITTED RANGED FROM THE LOWEST TO THE HIGHEST, AS FOLLOWS: $225; $287; $399.89; $400; $534; $630; $677.12; AND $775. THE DIRECTOR OF PURCHASES HAS NOTED THAT THE COST OF THE PAPER THE CONTRACTOR WAS TO SUPPLY WAS APPROXIMATELY $150. IN VIEW OF THE FOREGOING, THE DIRECTOR OF PURCHASES RECOMMENDS THAT, IN VIEW OF THE APPARENT ERROR IN BID AND THE FAILURE TO TAKE TIMELY ACTION IN THE CIRCUMSTANCES, THE DEFAULT SHOULD BE RESCINDED AND THE ORDER CANCELED WITHOUT PENALTY TO PRINCE. YOU CONCUR IN THIS RECOMMENDATION.

ON THE RECORD, THERE IS NO DOUBT THAT PRINCE MADE AN ERROR IN ITS BID BY NOT TAKING INTO ACCOUNT THE REQUIREMENT THAT THE CONTRACTOR WAS TO FURNISH THE PAPER STOCK REQUIRED, AND WE AGREE THAT THE DIRECTOR OF PURCHASES SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR IN THE BID AND SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO ITS ACCEPTANCE. HIS ACCEPTANCE OF THE BID, THEREFORE, DID NOT RESULT IN A VALID AND BINDING CONTRACT. SEE B-157960, NOVEMBER 23, 1965. IN VIEW OF THE FOREGOING, THE DEFAULT ACTION TAKEN BY THE DIRECTOR OF PURCHASES AT MR. PRINCE'S REQUEST WAS NOT APPROPRIATE IN THE CIRCUMSTANCES OF THIS CASE AND, SINCE THERE IS NO INDICATION THAT THE ACTION OF THE COMPANY IN FURNISHING NOTICE TO THE GOVERNMENT THAT A MISTAKE WAS MADE IN ITS BID CAUSED THE GOVERNMENT TO SUFFER ANY SUBSTANTIAL LOSS OR DAMAGE, THE DEFAULT ACTION AND PURCHASE ORDER MAY BE RESCINDED WITHOUT PENALTY TO PRINCE PRINTING. SEE B-162379, OCTOBER 20, 1967.