B-36630, JAN 4, 1944

B-36630, JAN 4, 1944

PRECIS-UNAVAILABLE

DISTRICT SUPERVISOR:

AAF EASTERN PROCUREMENT DISTRICT

67 BROAD STREET

NEW YORK, NEW YORK

1. FORWARDED HEREWITH, FOR APPROPRIATE ACTION, IS COPY OF LETTER ADDRESSED TO THE SECRETARY OF WAR BY THE COMPTROLLER GENERAL OF THE UNITED STATES, DATED 4 JANUARY 1944, SYMBOL NO. B-36630.

2. THE INCLOSED LETTER IS IN CONNECTION WITH LETTER FROM THIS OFFICE, DATED 9 SEPTEMBER 1943, SUBJECT: "REPORT REQUESTED BY THE GENERAL ACCOUNTING OFFICE," LETTER FROM YOUR OFFICE DATED 25 SEPTEMBER 1943, SUBJECT: "REPORT-- SPPDT 095 LEEDS & NORTHRUP COMPANY, PHILADELPHIA, PENNSYLVANIA", AND SUBSEQUENT CORRESPONDENCE.

BY COMMAND OF GENERAL ARNOLD:

1 INCL: CY LTR. TO SEC. OF WAR

1-4-44

CC: AIR JUDGE ADVOCATE

THE HONORABLE, THE SECRETARY OF WAR:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 14, 1943, CONCERNING LETTER DATED AUGUST 25, 1943, FROM LEEDS & NORTHRUP COMPANY, 4901 STENTON AVENUE, PHILADELPHIA, PENNSYLVANIA, RELATING TO AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID DATED JUNE 12, 1943, ACCEPTED BY PURCHASE ORDER DATED JUNE 30, 1943.

THE ARMY AIR FORCES MATERIAL COMMAND, EASTERN PROCUREMENT DISTRICT, NEW YORK, NEW YORK, REQUESTED BIDS UNDER DATE OF JUNE 7, 1943, FOR FURNISHING SEVERAL ARTICLES INCLUDING THOSE DESCRIBED IN ITEM 5 AS FOLLOWS:

TABLE OMITTED

IN RESPONSE TO THAT INVITATION, LEEDS & NORTHRUP COMPANY SUBMITTED A BID DATED JUNE 12, 1943, OFFERING TO FURNISH THE SPECIFIED QUANTITY OF LEAD WIRE UNDER ITEM 5 FOR A TOTAL PRICE OF $295.15. IN LETTER OF JUNE 12, 1943, SUBMITTING THE BID, THE COMPANY STATED THAT ON ITEM 5 IT WAS QUOTING ON "L&N #16-EL LEADWIRE". THE BID OF THE COMPANY AS TO ITEM 5 WAS ACCEPTED BY PURCHASE ORDER NO. (2620) 43-3526, DATED JUNE 30, 1943. LETTER DATED AUGUST 4, 1943, THE COMPANY ADVISED SAID ARMY AIR FORCES MATERIEL COMMAND AS FOLLOWS:

"RE: YOUR ORDER (2620) 43-3526

OUR D.O. 58767

"IN CHECKING OVER THE ABOVE ORDER IT APPEARS THAT WE QUOTED AN INCORRECT PRICE FOR THE LEADWIRE IN OUR QUOTATION T-43-1193 OF JUNE 12TH. THE PRICE WHICH WAS QUOTED IN THIS QUOTATION IS OUR STANDARD LIST PRICE FOR 16E, 16 GAUGE IRON-CONSTANTAN DUPLEX LEADWIRE IN A WEATHERPROOF BRAID INSULATION. THE PRICE SHOULD HAVE BEEN QUOTED FOR 16-EL LEAD COVERED DUPLEX LEADWIRE AT $0.13 PER FOOT LESS 10% QUANTITY DISCOUNT OR A TOTAL FOR THE ITEM OF $585.00, PLUS $2.65 TRANSPORTATION, MAKING A GRAND TOTAL OF $587.65.

"REFERENCE TO THE ENCLOSED PRICE LIST N-33, ON PAGE 24, WILL INDICATE THAT THIS IS OUR REGULARLY ESTABLISHED LIST PRICE AND WE ARE WRITING TO ASK THAT WE BE ALLOWED TO CORRECT OUR QUOTATION AND YOUR ORDER ON THIS BASIS. YOUR FAVORABLE CONSIDERATION OF THIS REQUEST WILL BE GREATLY APPRECIATED."

THE OFFICE OF THE DISTRICT SUPERVISOR ADVISED THE COMPANY BY LETTER DATED AUGUST 10, 1943, THAT NO DEVIATION IN PRICE COULD BE CONSIDERED BY THAT OFFICE AND SUGGESTED THAT THE MATTER BE TAKEN UP WITH THIS OFFICE. LETTER DATED AUGUST 25, 1943, THE COMPANY REQUESTED CONSIDERATION OF THE MATTER BY THIS OFFICE.

THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS RECEIVED ON ITEM 5 WERE IN THE TOTAL AMOUNTS OF $585, $675 AND $690. THE AMOUNT OF THE ADMINISTRATIVE ESTIMATE FOR ITEM 5 IS SHOWN ON SAID ABSTRACT AS $15.20 PER 100 FEET, A TOTAL OF $760. THUS THE BID OF LEEDS & NORTHRUP COMPANY IN THE AMOUNT OF $295.15 ON ITEM 5 WAS ENTIRELY OUT OF LINE WITH THE OTHER BIDS RECEIVED THEREON AND, ALSO, WITH THE ADMINISTRATIVE ESTIMATE OF THE COST OF SAID ITEM. THE DIFFERENCE BETWEEN THE BID OF THE CLAIMANT ON ITEM 5 AND THE OTHER BIDS RECEIVED THEREON-- ONE OF WHICH WAS SUBMITTED BY FOXBORO COMPANY WHICH COMPANY'S WIRE, OR EQUAL, WAS SPECIFIED IN THE INVITATION-- APPEARS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY ON ITEM 5; HENCE, THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING VERIFICATION THEREOF.

AS STATED ABOVE, THE COMPANY SPECIFIED IN LETTER DATED JUNE 12, 1943, THAT IT WAS QUOTING ON "L&N #16-EL LEADWIRE" AND IT HAS FURNISHED ITS PRICE LIST N-33 WHEREIN THE PRICE OF SAID NO. 16EL LEADWIRE IS SHOWN AS 13 CENTS PER FOOT. THE COMPANY STATED IN ITS LETTER OF AUGUST 4, 1943, QUOTED ABOVE, THAT SAID PRICE WAS SUBJECT TO A QUANTITY DISCOUNT OF 10 PERCENT RESULTING IN A NET PRICE FOR 5,000 FEET OF LEADWIRE OF $585 TO WHICH WAS ADDED TRANSPORTATION CHARGES OF $2.65, MAKING A TOTAL OF $585.65 AS ITS INTENDED BID. SAID PRICE LIST SHOWS THE PRICE FOR NO. 16E LEADWIRE -- ON WHICH THE COMPANY STATED IT BASED ITS BID-- AS 6.5 CENTS PER FOOT. ON THAT BASIS, THE PRICE FOR 5,000 FEET OF LEADWIRE, LESS 10 PERCENT QUANTITY DISCOUNT, PLUS TRANSPORTATION CHARGES OF $2.65, WOULD EQUAL $295.15, WHICH WAS THE PRICE SPECIFIED BY THE COMPANY IN ITS BID.

ACCORDINGLY, THERE BEING NO DOUBT AS TO THE ERROR AND OF WHAT IT CONSISTED, RELIEF IS AUTHORIZED TO BE GRANTED TO THE COMPANY. HOWEVER, SINCE THE INTENDED BID IN THE AMOUNT OF $587.65 WAS NOT THE LOWEST BID RECEIVED ON ITEM 5, PAYMENT SHOULD BE MADE TO THE COMPANY IN THE AMOUNT OF THE LOWEST BID, ONLY-- SHOWN ON THE ABSTRACT OF BIDS AS $585-- PROVIDED, THE ENTIRE 5,000 FEET OF LEADWIRE WAS DELIVERED. THE VOUCHER COVERING PAYMENT SHOULD REFER TO THIS DECISION.

IN THE EVENT PAYMENT HAS BEEN MADE OF THE BID PRICE ON ITEM 5, A VOUCHER FOR THE ADDITIONAL AMOUNT MAY BE FORWARDED TO THIS OFFICE FOR SETTLEMENT AS A CLAIM, WITH REFERENCE TO THIS DECISION.