B-78314, DEC 29, 1948

PRECIS-UNAVAILABLE

THE HONORABLE, THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 8, 1948, WITH ENCLOSURES, FROM THE CIVILIAN DEPUTY DIRECTOR OF FINANCE, CONCERNING LETTER DATED AUGUST 3, 1948, FROM P.R. MALLORY & COMPANY, INC. WHEREIN ERRORS WERE ALLEGED TO HAVE BEEN MADE IN QUOTING ON ITEMS 16A AND 18A OF ITS BID ON WHICH CONTRACT NO. W33-038-AC-20658, WAS AWARDED.

THE ARMY AIR FORCES, AIR MATERIEL COMMAND, WRIGHT FIELD, DAYTON, OHIO, BY INVITATION NO. 33-038-48-355 REQUESTED BIDS-- TO BE OPENED NOVEMBER 12, 1947-- FOR FURNISHING VARIOUS ARTICLES WHICH WERE DESCRIBED THEREIN INCLUDING ITEM 16A COVERING 2,000 CAPACITORS, FIXED, DRY ELECTROLYTIC, MALLORY NO. 95189, OR EQUAL, COLONIAL RAD. PART DWG. 55501, OR EQUAL, AND ITEM 18A COVERING 500 CAPACITORS, FIXED, DRY ELECTROLYTIC, MALLORY NO. FPD -238 OR EQUAL, MEISSNER NO. 25110, OR EQUAL. THE METHOD OF PRESERVATION FOR EACH OF SAID ITEMS WAS SPECIFIED IN THE INVITATION AS 1A-3. RESPONSE TO THE INVITATION. P.R. MALLORY & COMPANY, INC., SUBMITTED A BID DATED OCTOBER 24, 1947, WHEREIN IT OFFERED TO FURNISH THE CAPACITORS UNDER ITEMS 16A AND 18A FOR $0.21 AND $0.473, EACH, RESPECTIVELY. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEMS 16A AND 18A ON APRIL 15, 1948.

IT APPEARS THAT BY LETTER DATED APRIL 23, 1948, THE CORPORATION ADVISED THE CONTRACTING OFFICER THAT AN ERROR HAD BEEN MAKE IN ITS BID ON ITEM 16A IN THAT SAID ITEM COVERS A METAL TUBULAR CAPACITOR INSIDE ANOTHER CONTAINER, WHEREAS, ITS BID COVERED THE METAL TUBULAR CAPACITOR ONLY; THAT THE BID DID NOT INCLUDE THE COST OF PRESERVATION PACKING IN ACCORDANCE WITH METHOD 1A-3; AND THAT THE CORRECT PRICE FOR SAID ITEM SHOULD HAVE BEEN $0.468 PER CONDENSER PLUS $0.20 TO COVER THE PACKING, A TOTAL OF $0.668. ALSO, ERROR WAS ALLEGED THEREIN WITH RESPECT TO ITEM 18A, THE CORPORATION STATING THAT THE CORRECT PRICE THEREFOR WAS $0.65 EACH PLUS $0.20 TO COVER THE PACKING, OR A TOTAL OF $0.85 EACH. THE CONTRACTING OFFICER ADVISED THE CORPORATION UNDER DATE OF JUNE 2, 1948, THAT AUTHORITY WAS NOT VESTED IN HIS OFFICE TO INCREASE THE CONTRACT PRICES, AND SUGGESTED THAT THE MATTER BE TAKEN UP WITH THE GENERAL ACCOUNTING OFFICE.

IN A LETTER DATED AUGUST 3, 1948, ADDRESSED TO THE GENERAL ACCOUNTING OFFICE, THE CORPORATION ALLEGED ERROR WITH RESPECT TO ITEMS 16A AND 18A OF ITS BID. SINCE THE CORPORATION DID NOT FURNISH ANY EVIDENCE IN SUPPORT OF THE ALLEGED ERRORS OR AS TO THE CORRECT PRICES FOR SAID ITEMS, SUCH EVIDENCE WAS REQUESTED BY THIS OFFICE FROM THE CORPORATION, AND IN A LETTER DATED NOVEMBER 18, 1948-- SWORN TO BEFORE A NOTARY PUBLIC ON THE SAME DATE-- THE CORPORATION MADE CERTAIN STATEMENTS AND ATTACHED CERTAIN EVIDENCE IN SUPPORT OF ITS ALLEGATIONS OF ERROR, AS FOLLOWS:

WITH RESPECT TO ITEM 16A, THE CORPORATION STATED THAT IN SUBMITTING ITS BID THEREON IT MISTOOK COLONIAL NO. 55501-- ONE OF THE TYPES OF CAPACITORS, OR EQUAL, REQUIRED-- TO BE SIMILAR TO ITS NO. TC-36. THE PRICE LIST ATTACHED TO THE LETTER SHOWS THE PRICE FOR A TC-36 CAPACITOR TO BE $0.181 EACH. THE CORPORATION STATED THAT THE DIFFERENCE BETWEEN SAID PRICE AND $0.187 IS ITS NORMAL ALLOWANCE ON GOVERNMENT CONTACTS WHEN NO VARIANCE IN QUANTITY IS PERMITTED AND SPECIAL INSPECTION METHODS ARE EMPLOYED. IT APPEARS THAT IN COMPUTING ITS BID PRICE, THE CORPORATION ADDED TO SAID PRICES OF $0.187 THE AMOUNT OF $0.023 TO COVER PACKING AND ARRIVED AT A TOTAL OF $0.21 EACH-- THE PRICE BID PLACED IN THE PACKING CHARGE AND THAT THE CORRECT PRICE THEREFOR WAS $0.23. THE CORPORATION STATED THAT SINCE THE CAPACITOR WAS NOT FURNISHED A BREAKDOWN IN SUPPORT OF ITS CORRECT PRICE WHICH IS AS FOLLOWS:

TABLE OMITTED:

TO SAID PRICE OF $0.4680 FOR EACH CAPACITOR WAS ADDED $0.20 FOR PACKING-- REVISED FROM $0.23-- TO ARRIVE AT THE STATED INTENDED PRICE OF $0.668 EACH FOR ITEM 16A.

WITH RESPECT TO ITEM 18A, THE CORPORATION STATED THAT IT REFERRED TO AN INCORRECT LINE ON ITS PRICE LIST AND BY REASON THEREOF IT OBTAINED THE PRICE FOR A FPD-234 CAPACITOR WHICH, WITH A SMALL ALLOWANCE BECAUSE NO VARIATION IN QUANTITY WAS PERMITTED AND SPECIAL INSPECTION METHODS WERE EMPLOYED, AMOUNTED TO $0.45 EACH, WHEREAS, IF IT HAD REFERRED TO THE CORRECT LINE ON ITS PRICE LIST FOR A FPD-238 CAPACITOR, AS REQUIRED, IT WOULD HAVE ARRIVED AT A PRICE OF $0.668. THE CORPORATION ADDED TO SAID PRICE OF $0.668 THE AMOUNT OF $0.20 FOR PACKING-- THE SAME PACKING CHARGE AS ON ITEM 16A-- AND ARRIVED AT THE INTENDED BID PRICE OF $0.868 EACH. THE REFERRED-TO PRICE LIST SHOWS THE PRICE FOR FP-234 CAPACITOR TO BE $0.431 EACH. THE DIFFERENCE OF 0.019 BETWEEN SAID AMOUNT AND $0.45 EACH APPEARS TO REPRESENT THE PRICE ADDED BY THE CORPORATION BECAUSE NO VARIATION IN QUANTITY WAS PERMITTED AND BECAUSE OF SPECIAL INSPECTION METHODS EMPLOYED. THE REFERRED-TO PRICE LIST SHOWS THE PRICE LIST FOE FP- 238 CAPACITOR, AS REQUIRED, TO BE $0.65 EACH. IF THERE BE ADDED THERETO (1) THE AMOUNT OF $0019, REFERRED TO ABOVE, AND (2) THE AMOUNT OF $0.20 FOR PACKING, THE TOTAL WILL BE $0.869 EACH.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS ON ITEM 16A WERE $0.55 EACH AND $0.85 EACH, AND THAT THE OTHER BID ON ITEM 18A WAS $2.02 EACH. THUS, THE BID OF P.R. MALLORY & COMPANY, INC., IN THE AMOUNT OF $0.21 EACH FOR ITEM 16A IS OUT OF LINE WITH THE TWO OTHER BIDS THEREON, AND THE BID OF THE CORPORATION IN THE AMOUNT OF $0.473 IS ENTIRELY OUT OF LINE WITH THE OTHER BID THEREON. UNDER SUCH CIRCUMSTANCES, THE BID OF THE COMPANY AS TO ITEMS 16A AND 18A SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

IT IS APPARENT THAT THE COMPANY MADE AN ERROR IN ITS BID ON ITEMS 16A AND 18A, AS ALLEGED, AND IT HAS FURNISHED SATISFACTORY EVIDENCE OF ITS INTENDED BID PRICES ON SAID ITEMS. ACCORDINGLY, THE COMPANY MAY BE PAID FOR THE CAPACITORS DELIVERED UNDER ITEM 16A AT THE PRICE OF $0.55 EACH-- THE AMOUNT OF THE NEXT LOW BID THERON-- AND MAY BE PAID FOR THE CAPACITORS DELIVERED UNDER ITEM 18A AT THE PRICED OF $0.868 EACH.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHERS COVERING PAYMENT FOR ITEM 16A AND 18A OF CONTRACT NO. W33-038-AS-20658, DATED APRIL 15, 1948.