B-173781, SEP 7, 1971

B-173781, SEP 7, 1971

CONTRACT - AMENDMENT TO CORRECT MISTAKE DECISION ALLOWING CORRECTION OF A MISTAKE IN BID PRICE ON A CONTRACT LET TO ALLEN V. SMITH, INC., UNDER AN IFB ISSUED BY THE GRAIN DIVISION, CONSUMER AND MARKETING SERVICE. SINCE THE BIDDER INDICATED THAT THE POINT OF ORIGIN WAS GREELEY, COLORADO, AND SINCE THE PRICES QUOTED FOR THE PINTO BEANS HAVING DELIVERY POINTS CLOSE TO GREELEY WERE HIGHER THAN THE PRICES QUOTED FOR DELIVERY FAS NEW ORLEANS, THE CONTRACTING OFFICER SHOULD HAVE VERIFIED THE BID BEFORE AWARD. ACCORDINGLY, THE CONTRACT MAY BE AMENDED AS ADMINISTRATIVELY RECOMMENDED.

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 5, 1971, WITH ENCLOSURES, FROM THE ADMINISTRATOR, CONSUMER AND MARKETING SERVICE, DEPARTMENT OF AGRICULTURE, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY ALLEN V. SMITH, INC., TO HAVE BEEN MADE IN ITS BID ON ITEM 122 UPON WHICH CONTRACT NO. 12-25-1-5015 IS BASED.

THE GRAIN DIVISION, CONSUMER AND MARKETING SERVICE, HYATTSVILLE, MARYLAND, BY INVITATION NO. 8, ANNOUNCEMENT GR-7, REQUESTED BIDS FOR FURNISHING VARIOUS QUANTITIES OF DOMESTIC DRY EDIBLE BEANS FOR SHIPMENT TO NUMEROUS DESTINATIONS. ALLEN V. SMITH, INC., SUBMITTED A BID DATED APRIL 30, 1971, OFFERING TO FURNISH UNDER ITEM 122 A TOTAL OF 1,200,240 POUNDS OF PINTO BEANS. OF THAT TOTAL AMOUNT, 480,096 POUNDS WERE OFFERED AT A UNIT PRICE OF $10.39 PER HUNDREDWEIGHT AND 720,144 POUNDS AT A UNIT PRICE OF $10.03 PER HUNDREDWEIGHT. THE ABSTRACT OF BIDS SHOWS THAT THE FIVE OTHER BIDS ON ITEM 122 RANGED FROM $11.13 TO $11.70 PER HUNDREDWEIGHT. DELIVERY OF ITEM 122 WAS FAS PORT, NEW ORLEANS, LOUISIANA. THE SHIPPING PERIOD WAS JULY 1 THROUGH 30, 1971. THE BID WAS ACCEPTED ON MAY 11, 1971.

IT IS REPORTED THAT ON MAY 17, 1971, A REPRESENTATIVE OF ALLEN V. SMITH, INC., TELEPHONED THE GRAIN DIVISION ALLEGING THAT IN COMPUTING ITS BID PRICES FOR ITEM 122 THE CORPORATION MADE A MISTAKE IN ITS BID, AN ARITHMETICAL ERROR OF $1.00 PER HUNDREDWEIGHT, TOTALLING $12,002.40.

IN A LETTER DATED MAY 17, 1971, SMITH STATED THAT THE DIFFERENCE BETWEEN ITS BID PRICES ON ITEM 122 AND THE PRICE QUOTED BY THE NEXT LOWEST BIDDER ON THAT ITEM WAS SUFFICIENT TO INDICATE THAT ITS BID PRICES FOR THAT ITEM WERE IN ERROR. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE CORPORATION SUBMITTED ITS WORKSHEETS WHICH ESTABLISH THAT AN ARITHMETICAL ERROR OF $1.00 WAS MADE BY THE CORPORATION IN COMPUTING ITS BID PRICES FOR ITEM 122, AS ALLEGED.

THE INVITATION SOLICITED BIDS ON PINTO BEANS DELIVERED TO VARIOUS DESTINATIONS UNDER DIFFERENT ITEM NUMBERS. THE CONTRACTING OFFICER HAS STATED THAT HE SHOULD NOT HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR BEFORE AWARD BECAUSE IT WAS NEAR THE END OF THE MARKET YEAR AND THERE WAS A WIDE RANGE IN BIDS UNDER THE INVITATION. HOWEVER, IN THE BID, THE BIDDER INDICATED THAT THE BEANS WOULD BE SHIPPED FROM GREELEY, COLORADO, TO VARIOUS DESTINATIONS. AN EXAMINATION OF THE BID REVEALS THAT PRICES QUOTED BY THE BIDDER FOR THE BEANS HAVING DELIVERY POINTS CLOSER TO GREELEY, COLORADO, WERE HIGHER THAN THE PRICES QUOTED FOR DELIVERY FAS NEW ORLEANS. THAT SHOULD HAVE ALERTED THE CONTRACTING OFFICER TO THE POSSIBILITY OF AN ERROR IN THE BID. CONSEQUENTLY, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION.

IT IS REPORTED THAT A COMPUTER ANALYSIS HAS DETERMINED THAT AN ALLOWANCE OF NO MORE THAN $0.50 PER HUNDREDWEIGHT COULD BE PERMITTED WITHOUT DISTURBING SMITH'S STANDING FOR AWARD AND THE STANDING OF THE OTHER CONTRACT AWARDS. THE CONTRACTING OFFICER HAS THEREFORE RECOMMENDED THAT THE CONTRACT UNIT PRICES FOR ITEM 122 BE INCREASED BY $0.50 PER HUNDREDWEIGHT.

IN VIEW OF THE FOREGOING, THE AMENDMENT OF THE CONTRACT IS APPROVED AS ADMINISTRATIVELY RECOMMENDED.