B-173825, OCT 12, 1971

B-173825, OCT 12, 1971

CONTRACT REFORMATION - MISTAKE IN BID DECISION ALLOWING REFORMATION OF A CONTRACT LET TO THE LINDE DIVISION, UNION CARBIDE CORPORATION BY THE TWIN CITIES MINING RESEARCH CENTER. SINCE AWARD WAS MADE WITHOUT VERIFICATION OF THE BID EVEN THOUGH THE CONTRACTING OFFICER BELIEVED THERE HAD BEEN AN ERROR, AND THE RECORD CLEARLY INDICATES THAT THERE WAS AN ERROR IN BID AS WELL AS THE INTENDED BID, REFORMATION OF THE CONTRACT PRICE SHOULD BE ALLOWED.

TO MR. SECRETARY:

REFERENCE IS MADE TO LETTER DATED AUGUST 6, 1971, FROM THE DEPUTY ASSISTANT SECRETARY, MANAGEMENT AND BUDGET, REQUESTING A DECISION WHETHER CONTRACT S3310946 WITH THE LINDE DIVISION, UNION CARBIDE CORPORATION (LINDE) MAY BE AMENDED TO INCREASE THE CONTRACT PRICE FROM $7,710 TO $11,444.14 DUE TO A MISTAKE IN BID WHICH WAS ALLEGED AFTER AWARD OF THE CONTRACT.

THE TWIN CITIES MINING RESEARCH CENTER, BUREAU OF MINES, IN OCTOBER 1970, INFORMALLY REQUESTED A PRICE QUOTATION FROM LINDE ON AN OXYGEN LIQUID FUEL SUPERSONIC BURNER SYSTEM. LINDE, IN A LETTER DATED NOVEMBER 4, 1970, QUOTED PRICES FOR FOUR JET NOZZLES ($3,580), HOSES AND FITTINGS ($154.14), AND SPARE PARTS. A SUBSEQUENT LETTER DATED NOVEMBER 19, 1970, QUOTED A PRICE FOR THE PUMPING, METERING, AND CONTROL PANEL F.O.B. NEWARK, NEW JERSEY, OF $7,560.

THE RESEARCH CENTER, IN JANUARY 1971, DECIDED TO PURCHASE THIS EQUIPMENT FROM LINDE ON A SOLE-SOURCE BASIS AND A SOLICITATION WAS SENT TO THE FIRM. AS ORIGINALLY DRAFTED, THE SPECIFICATIONS REQUIRED A TEST FRAME IN ADDITION TO THE ABOVE EQUIPMENT, THE TOTAL COST BEING ESTIMATED BY THE CONTRACTING OFFICER AS APPROXIMATELY $18,000. HOWEVER, ON FEBRUARY 25, 1971, THE SOLICITATION WAS AMENDED TO DELETE THE TEST FRAME.

AN OFFER WAS RECEIVED FROM LINDE IN THE AMOUNT OF $7,710 DELIVERED. WAS NOTED THAT THE OFFERED PRICE WAS CONSIDERABLY BELOW THE ESTIMATED PRICE WHICH WAS BASED ON PREVIOUS QUOTATIONS FROM THE FIRM. AN ATTEMPT WAS MADE TO CONTACT THE RESPONSIBLE AGENT FOR LINDE TO QUESTION THE OFFER, BUT THE AGENT WAS UNAVAILABLE. THE AWARD WAS MADE ON MARCH 23, 1971, TO LINDE WITHOUT ANY VERIFICATION OF THE PRICE.

LINDE NOTIFIED THE RESEARCH CENTER ON APRIL 28, 1971, THAT THERE HAD BEEN A PRICING ERROR AND WAS SUBSEQUENTLY INFORMED THAT THE ALLEGATION OF ERROR WITH ALL PERTINENT SUPPORTING INFORMATION SHOULD BE SUBMITTED BY LETTER. LINDE DID SO BY LETTER DATED MAY 4, 1971, AND ATTACHED COPIES OF ITS PREVIOUS LETTERS TO THE RESEARCH CENTER. FROM THE INFORMATION FURNISHED BY LINDE, IT APPEARS THAT THE PRICE IN THE OFFER WAS BASED UPON THE $7,560 PRICE IN THE NOVEMBER 19 QUOTATION LETTER PLUS $150 FOR DELIVERY TO DESTINATION AND OMITTED THE $3,734.14 COST IN THE NOVEMBER 4 QUOTATION LETTER.

IN THE CIRCUMSTANCES, IT IS RECOMMENDED THAT THE CONTRACT PRICE BE INCREASED BY $3,734.14 TO $11,444.14.

IN 37 COMP. GEN. 706 (1958), IT WAS HELD THAT A CONTRACTOR IS ENTITLED TO RELIEF WHEN THE CONTRACTING OFFICER SUSPECTED AN ERROR IN PRICE BUT TOOK ADVANTAGE OF IT WITHOUT WAITING FOR A CONFIRMATION. IN VIEW THEREOF, AND SINCE THERE IS ADEQUATE EVIDENCE OF THE BONA FIDES OF THE MISTAKE AND OF THE PRICE WHICH WOULD HAVE BEEN SUBMITTED BUT FOR THE MISTAKE, THE CONTRACT SHOULD BE CORRECTED AS RECOMMENDED.

THE ENCLOSURES FURNISHED WITH THE AUGUST 6 SUBMISSION ARE RETURNED AS REQUESTED.