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PRECIS-UNAVAILABLE THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO LETTER DATED JULY 10. FOR RELIEF ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 33 616-53-427. THE ERROR IS SAID TO HAVE OCCURRED IN THE BID ON ITEM 1 FOR 5 POUNDS OF GALLIUM AND CONSISTED OF MISPLACING THE DECIMAL POINT SO THAT THE UNIT PRICE APPEARED AS $135 AND THE TOTAL PRICE AS $675 INSTEAD OF $1. THE BIDS RECEIVED PURSUANT TO SAID INVITATION WERE OPENED ON MARCH 10. IT APPEARS THAT ALL BIDS WERE REJECTED BECAUSE OF A CHANGE IN THE SPECIFICATIONS AS TO ITEM 1 AND A CONTRACT WAS NEGOTIATED WITH THE CORPORATION PURSUANT TO SECTION 2(C)(1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947.

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B-115161, AUG 20, 1953

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO LETTER DATED JULY 10, 1953, FROM THE DEPUTY DIRECTOR OF FINANCE, UNITED STATES AIR FORCE, FORWARDING THE REPORT REQUESTED BY THIS OFFICE CONCERNING THE REQUEST OF A. D. MACKAY INC., 198 BROADWAY, NEW YORK, FOR RELIEF ON ACCOUNT OF AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 33 616-53-427, ISSUED BY THE WRIGHT AIR DEVELOPMENT CENTER, WRIGHT PATTERSON AIR FORCE BASE, OHIO, ON FEBRUARY 20, 1953. THE ERROR IS SAID TO HAVE OCCURRED IN THE BID ON ITEM 1 FOR 5 POUNDS OF GALLIUM AND CONSISTED OF MISPLACING THE DECIMAL POINT SO THAT THE UNIT PRICE APPEARED AS $135 AND THE TOTAL PRICE AS $675 INSTEAD OF $1,350 AND $6,750, RESPECTIVELY, AS INTENDED.

THE BIDS RECEIVED PURSUANT TO SAID INVITATION WERE OPENED ON MARCH 10, 1953. IT APPEARS THAT ALL BIDS WERE REJECTED BECAUSE OF A CHANGE IN THE SPECIFICATIONS AS TO ITEM 1 AND A CONTRACT WAS NEGOTIATED WITH THE CORPORATION PURSUANT TO SECTION 2(C)(1) OF THE ARMED SERVICES PROCUREMENT ACT OF 1947. ON APRIL 15, 1953, PURCHASE ORDER (33-616) 53 3712 COVERING ITEMS 1, 3, 4, 5, 6, 12, AND 34 WAS ISSUED TO A. D. MACKAY, INC. THE CORPORATION, BY LETTER DATED APRIL 20, 1953, AND BY TELEGRAM OF APRIL 24, 1953, NOTIFIED THE CONTRACTING OFFICER OF ITS MISTAKE BUT WAS ADVISED BY THAT OFFICIAL IN A LETTER DATED APRIL 29, 1953, THAT THE PURCHASE ORDER COULD NOT BE AMENDED BY HIM BUT THAT RELIEF MIGHT BE SOUGHT FROM THIS OFFICE.

IN SUPPORT OF ITS CLAIM OF ERROR, A. D. MACKAY, INC., HAS SUBMITTED THE AFFIDAVIT OF ITS PRESIDENT SETTING FORTH THE MANNER IN WHICH THE MISTAKE OCCURRED WHICH IS SUPPORTED BY A PHOTOSTATIC COPY OF ITS WORKSHEET SHOWING A PRICE OF $1,350 PER POUND AND A TOTAL PRICE OF $6,750 FOR ITEM 1. SAID AFFIDAVIT CONTAINED STATEMENTS THAT THERE ARE ONLY THREE SOURCES OF SUPPLY FOR THIS METAL IN THE UNITED STATES AND THAT THE MINIMUM PRICE THEREFOR IN QUANTITIES UP TO 25 POUNDS IS $1,350 PER POUND.

THE ABSTRACT OF BIDS SHOWS THAT THE ONLY OTHER BID RECEIVED FOR ITEM 1 SPECIFIED A PRICE OF $4.10 WHICH APPEARS TO BE THE PRICE PER GRAM. THAT BASIS, THE QUOTATION AMOUNTS TO $1,859.76 PER POUND. THE RECORD FURTHER INDICATES THAT THE PURCHASE REQUEST ON THE BASIS OF WHICH THE SUBJECT INVITATION WAS PREPARED, ESTIMATED THE UNIT PRICE OF ITEM 1 AT $40 PER POUND. IN VIEW OF THE DISCREPANCY BETWEEN THE ESTIMATED COST OF $40 PER POUND AND A LOW BID OF $135 PER POUND AND A HIGH OF $1,859.76 PER POUND, THE CONTRACTING OFFICER APPEARS TO HAVE HAD AMPLE REASON TO HAVE SUSPECTED THE PROBABILITY OF ERROR AND, THEREFORE, SHOULD HAVE REQUESTED VERIFICATION OF BOTH BIDS PRIOR TO AWARD.

SINCE THERE APPEARS LITTLE, IF ANY, DOUBT THAT THERE WAS AN ERROR IN THE BID OF A. D. MACKAY, INC. AS TO ITEM 1, THE ACCEPTANCE OF THE BID, UNDER THE CIRCUMSTANCES INVOLVED, DID NOT CONSUMMATE A VALID AND BINDING CONTRACT FOR THAT ITEM. ACCORDINGLY, THIS OFFICE WILL INTERPOSE NO OBJECTION TO THE CANCELLATION OF ITEM 1 OF NEGOTIATED CONTRACT DATED APRIL 15, 1953. HOWEVER, IN THE EVENT THAT THE GALLIUM HAS BEEN DELIVERED, THE CONTRACTOR SHOULD BE REQUIRED TO SUBSTANTIATE ITS ALLEGED INTENDED BID PRICE OF $1,350 PER POUND THEREFOR. THE EVIDENCE SHOULD CONSIST OF THE ORIGINAL QUOTATION, OR A SWORN COPY THEREOF, ON THE GALLIUM RECEIVED BY THE CONTRACTOR FROM ITS SUPPLIER, OR THE SUPPLIER'S INVOICE EVIDENCING PAYMENT FOR THE GALLIUM BY THE CONTRACTOR. SUCH EVIDENCE SHOULD BE FORWARDED TO THIS OFFICE FOR CONSIDERATION AS TO THE SUFFICIENCY THEREOF TOGETHER WITH A REPORT AS TO WHETHER THE ALLEGED INTENDED BID PRICE FOR ITEM 1 IS CONSIDERED REASONABLE.

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