B-128819, SEP. 10, 1956

B-128819, SEP. 10, 1956

TO THE HONORABLE ALLEN W. DULLES, DIRECTOR, CENTRAL INTELLIGENCE AGENCY:

REFERENCE IS MADE TO YOUR LETTER OF AUGUST 1, 1956, SUBMITTING FOR OUR CONSIDERATION THE MATTER OF AN ALLEGED MISTAKE IN BID MADE BY THE GREAT SOUTHERN BOX COMPANY, INC., IN THE SUBMISSION IF ITS BID UNDER INVITATION NO. 46-55, DATED FEBRUARY 4, 1955, ISSUED BY YOUR AGENCY.

UNDER THE INVITATION, BIDS, TO BE OPENED FEBRUARY 18, 1955, WERE REQUESTED FOR FURNISHING FIBRE-BOARD SHEETS FOR CORRUGATED FIBRE-BOARD BOXES IN DIMENSIONS AND QUANTITIES AS FOLLOWS:

TABLE

ITEM QUANTITY UNIT UNIT PRICE AMOUNT 1. 36 1/2 INCHES BY 3600

SHEET

140 INCHES 2. 60 INCHES BY 80 3600 SHEET

INCHES 3. 44 INCHES BY 90 3600 SHEET

INCHES 4. 24 INCHES BY 60 3600 SHEET

INCHES

ON FEBRUARY 11, 1955, THE GREAT SOUTHERN BOX COMPANY, INC., IN SUBMITTING ITS BID, INSERTED UNIT PRICES OF .8606, .71 AND .2582, AND TOTAL PRICES OF $3,098.16, $2,556 AND $929.52 OPPOSITE ITEMS 1, 2 AND 3, RESPECTIVELY, IN THE SPACES PROVIDED ON THE BID FORM. NO FIGURES WERE INSERTED OPPOSITE ITEM 4.

IN EVALUATING THE 3 BIDS WHICH WERE SUBMITTED IN RESPONSE TO THE INVITATION, MR. DOUGLAS MACKINNON, WHO, IT IS STATED, NEGOTIATED THE CONTRACT ON BEHALF OF THE GOVERNMENT, NOTED THAT THE GREAT SOUTHERN BOX COMPANY WAS THE LOW BIDDER FOR ITEMS 2 AND 3, BUT THAT ITS BID FOR ITEM 3 WAS SUBSTANTIALLY OUT OF LINE WITH THE OTHER BIDS FOR THAT ITEM, WHICH STATED UNIT PRICES OF .62370 AND .6836. ACCORDINGLY, ON MARCH 3, 1955, MR. MACKINNON TELEPHONED MR. C. C. VIGUERIE, THE VICE PRESIDENT OF THE GREAT SOUTHERN BOX COMPANY, WHO HAD EXECUTED THE BID, AND REQUESTED A VERIFICATION OF THE PRICE STATED FOR ITEM 3. MR. VIGUERIE INFORMED MR. MACKINNON THAT THE PRICE BID FOR ITEM 3 WAS CORRECT, AND THAT AN AWARD FOR ITEMS 2 AND 3 WOULD BE ACCEPTED.

BY LETTER OF MARCH 21, 1955, THE CONTRACTOR WAS ADVISED OF THE ACCEPTANCE OF ITS BID FOR ITEMS 2 AND 3, IN THE TOTAL AMOUNT OF $3,485.52. UPON RECEIPT OF THE CONTRACTING OFFICER'S LETTER, WHICH ALSO TRANSMITTED THE CONTRACT, MR. VIGUERIE TELEPHONED THE CONTRACTING OFFICER STATING THAT A SERIOUS ERROR HAD BEEN MADE IN THE BID SUBMITTED BY THE CONTRACTOR. MR. VIGUERIE STATED IN THE TELEPHONE CONVERSATION AND IN A CONFIRMING LETTER OF MARCH 25, 1955, THAT, AS EVIDENCED BY THE COPY OF THE BID FORM RETAINED IN THE CONTRACTOR'S FILE, WHICH HAD BEEN USED AS ITS WORKSHEET, THE CONTRACTOR HAD INTENDED TO SUBMIT PRICES ON ITEMS 2, 3 AND 4, BUT TO OMIT ITEM 1 "DUE TO THE WIDTH DIMENSION OF THIS SHEET SIZE.' MR. VIGUERIE FURTHER STATED THAT, WHEN THEIR SECRETARY TYPED THE FORMAL BID IN TRIPLICATE, SHE ERRED BY SHOWING THE PRICE FOR ITEM 2 OPPOSITE ITEM 1, THE PRICE FOR ITEM 3 OPPOSITE ITEM 2, AND THE PRICE FOR ITEM 4 OPPOSITE ITEM 3; THAT WHEN MR. MACKINNON CONTACTED HIM BY TELEPHONE REQUESTING A VERIFICATION OF THE BID, HE REPLIED THAT HE COULD NOT FIND ANY DISCREPANCY IN THE BID PRICES SHOWN, RELYING UPON THE INFORMATION SHOWN IN THE REFERRED-TO COPY OF THE BID FORM WHICH HAD BEEN USED IN PREPARING THE BID; AND THAT THE CONTRACT WOULD SUFFER A SUBSTANTIAL LOSS ON THE ORDER IF IT WERE NOT AFFORDED SOME RELIEF, SINCE IT HAD EXPECTED TO RECEIVE $5,654.16 FOR MANUFACTURING ITEMS 2 AND 3, OR $2,168.64 MORE THAN THE AMOUNT OF ITS BID AS SUBMITTED. MR. VIGUERIE AGREED TO MANUFACTURE AND SHIP ITEMS 2 AND 3 "DURING THE COMING WEEK," WITH THE UNDERSTANDING THAT THE CONTRACTOR'S CLAIM FOR RELIEF, NAMELY, FOR PAYMENT TO IT OF AN AMOUNT EQUAL TO THE NEXT LOW BID FOR THE ITEMS INVOLVED, WOULD RECEIVE CONSIDERATION.

BY LETTER OF MAY 17, 1955, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT ITS CLAIM WOULD HAVE TO BE DENIED INASMUCH AS IT HAD VERIFIED ITS BID BEFORE AWARD, BUT THAT THE CONTRACTOR MIGHT DESIRE TO EXERCISE ITS RIGHT OF APPEAL UNDER THE DISPUTES CLAUSE OF THE CONTRACT. THE CONTRACTOR, BY LETTER OF JUNE 1, 1955, ADDRESSED AN APPEAL TO YOU IN THE MATTER STATING, AMONG OTHER THINGS, THAT DURING THE REFERRED-TO TELEPHONE CONVERSATION, WHEN MR. MACKINNON REQUESTED MR. VIGUERIE TO VERIFY THE CONTRACTOR'S BID, THE LATTER BELIEVED THAT THE COPY OF THE BID WHICH THE FORMER WAS LOOKING AT WAS IDENTICAL TO THE WORK COPY WHICH MR. VIGUERIE HAD BEFORE HIM, AND THAT ITEM NUMBERS AND CORRESPONDING FIGURES WERE NOT CALLED OUT DURING THE COURSE OF THE CONVERSATION. THE LATTER CONTENTION IS NOT DENIED BY THE CONTRACTING OFFICER.

IN HIS LETTER OF APRIL 24, 1956, THE CONTRACTING OFFICER STATES THAT THE CONTRACTOR'S MISTAKE IN BIDDING APPEARS FROM THE EVIDENCE TO HAVE BEEN INADVERTENT AND INNOCENT, BUT THAT HE DOES NOT RECOMMEND GRANTING THE REQUESTED RELIEF IN VIEW OF THE CONFIRMATION OF THE BID AND THE FACT THAT IT WOULD NOT BE FAIR TO THE NEXT LOWEST BIDDER WHO OTHERWISE WOULD HAVE BEEN AWARDED THE CONTRACT.

AS INDICATED IN THE CONTRACTING OFFICER'S LETTER, IT IS IN THE PUBLIC INTEREST TO MAINTAIN THE STANDARDS OF COMPETITIVE BIDDING. HOWEVER, IT HAS BEEN HELD THAT WHERE, AS HERE, THE CONTRACTING OFFICER HAS NOTICE OF THE PROBABILITY THAT AN ERROR HAS BEEN MADE IN A BID, THE GOVERNMENT, IN REQUESTING A VERIFICATION THEREOF, MUST GIVE THE BIDDER SUFFICIENT FACTS TO PUT HIM ON NOTICE OF THE MISTAKE SURMISED, IF THE SUBSEQUENT ACCEPTANCE OF THE BID IS TO RESULT IN A CONTRACT. THE GOVERNMENT DOES NOT NECESSARILY FULFILL ITS DUTY IN THIS RESPECT BY MERELY REQUESTING A VERIFICATION OF THE BID PRICE. SEE UNITED STATES V. METRO NOVELTY MANUFACTURING CO., INC., 125 F.SUPP. 713; AND 35 COMP. GEN. 136.

IN THE PRESENT INSTANCE, THE CONTRACTING OFFICER NOT ONLY NOTED THAT THE PRICE STATED BY THE CONTRACTOR FOR ITEM 3 WAS SUBSTANTIALLY OUT OF LINE WITH THE OTHER BIDS, BUT HE ALSO MUST HAVE NOTED THAT IT WAS APPROXIMATELY IN LINE WITH THE PRICES SUBMITTED BY THE OTHER BIDDERS FOR ITEM 4. MOREOVER, IT WAS READILY APPARENT FROM THE BID FORM SUBMITTED THAT IT WAS OUT OF LINE WITH THE BID PRICES STATED BY THE CONTRACTOR FOR THE REMAINING ITEMS, CONSIDERING THE QUANTITY, AS DETERMINED BY THE DIMENSIONS, OF THE SEVERAL ITEMS BID UPON.

WITH THESE FACTS AVAILABLE TO THE GOVERNMENT, IT IS BELIEVED THAT A MERE REQUEST FOR VERIFICATION OF THE BID PRICE FOR ITEM 3, WITHOUT EVEN IDENTIFYING PRICE WITH THE DESCRIPTION OF THE ITEM, WAS NOT A SUFFICIENT NOTICE OF THE ERROR WHICH THE GOVERNMENT HAD AMPLE REASON TO BELIEVE EXISTED. THAT BEING TRUE, IT PROPERLY MAY NOT BE SAID THAT THE ACCEPTANCE OF THE BID CREATED A CONTRACT.

THE AGGREGATE AMOUNT INTENDED TO BE BID BY THE CONTRACTOR FOR ITEMS 2 AND 3 WAS $5,654.16, WHEREAS THE BID OF THE ATLANTA PAPER COMPANY (OTHERWISE LOW BIDDER FOR THESE ITEMS) AMOUNTED TO $4,966.92. ACCORDINGLY, YOU ARE ADVISED THAT PAYMENT SHOULD BE MADE TO THE CONTRACTOR FOR THE SUPPLIES FURNISHED UNDER CONTRACT NO. XG-1495 ON THE BASIS OF THE LAST-MENTIONED AMOUNT.

THE PAPERS TRANSMITTED WITH YOUR LETTER, WITH THE EXCEPTION OF THE STATEMENT OF FACTS AND RECOMMENDATIONS OF THE CONTRACTING OFFICER, ARE RETURNED HEREWITH.