B-135880, APR. 28, 1958

B-135880, APR. 28, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED APRIL 16, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH ELECTRONIC INDUSTRIAL SALES, INC., WASHINGTON, D.C., ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. DA-44-120-AS-114, DATED APRIL 5, 1957, WAS BASED.

THE PURCHASING AND CONTRACTING OFFICE, VINT HILL FARMS STATION, WARRENTON, VIRGINIA, BY INVITATION NO. AS-44-120-57-64, DATED MARCH 20, 1957, REQUESTED BIDS--- TO BE OPENED APRIL 4, 1957--- FOR FURNISHING, AMONG OTHER ITEMS FOUR HUNDRED AND THIRTY (430) AND SEALS FOR RG-85/U CABLE, NAVY TYPE RW-491567. IN RESPONSE THERETO ELECTRONIC INDUSTRIAL SALES, INC., SUBMITTED A BID DATED APRIL 1, 1957, OFFERING TO FURNISH THE END SEALS AT THE PRICE OF $8.50 EACH, OR A TOTAL PRICE OF $3,655. THE OTHER BID RECEIVED WAS IN THE AMOUNT OF $49 EACH AND THE REQUISITIONING OFFICE ESTIMATED THE UNIT PRICE AS $37.

THE CONTRACTING OFFICER REPORTS THAT WHEN THE BIDS WERE OPENED ON APRIL 4, 1957, IT WAS NOTICED THAT THIS BIDDER HAD SUBMITTED AN APPARENTLY UNREASONABLE LOW BID; THAT HE CONTACTED THE BIDDER BY TELEPHONE AND INQUIRED IF IT WAS SURE OF THE SPECIFICATION ON WHICH IT HAD SUBMITTED A BID; AND THAT THE MANAGER RECHECKED THE CATALOG AND ADVISED THAT HE WAS QUOTING ON THE CORRECT ITEM ACCORDING TO THE CATALOG THAT WAS PUBLISHED BY THE MANUFACTURER OF THE ITEM. BY LETTER DATED APRIL 24, 1957, THE CONTRACTOR CONFIRMED THE ALLEGED MISTAKE.

IT APPEARS THAT IN ITS LETTER OF APRIL 24, THE CONTRACTOR STATED THAT IN REQUESTING PRICE INFORMATION FROM THE MANUFACTURER,"THE INCORRECT ITEM WAS INADVERTENTLY QUOTED ON TO US" AND THAT IT IN TURN QUOTED ON THIS BASIS TO THE GOVERNMENT. THE CONTRACTOR ENCLOSED THE ORIGINAL COPY OF A LETTER FROM THE MANUFACTURER, WHICH LETTER EXPRESSES OR IMPLIES THE OPINION THAT IT WAS A CATALOG ERROR. IN SUBSEQUENT CORRESPONDENCE THE CONTRACTOR SUBMITTED COPIES OF THE CATALOG IN QUESTION AND PRICE QUOTATIONS FROM THE MANUFACTURER.

IT ALSO APPEARS THAT DELIVERY OF THE MATERIAL HAS BEEN HELD IN ABEYANCE SINCE APRIL 15, 1957, WHEN THE MANUFACTURER NOTIFIED THE CONTRACTOR OF THE CATALOG ERROR AND ERROR IN ORIGINAL QUOTATION. THE CONTRACTOR HAS REQUESTED THAT THE UNIT PRICE BE INCREASED FROM $8.50 TO $40.90, OR THAT THE CONTRACT BE CANCELED, WITHOUT LIABILITY.

GENERALLY, WHEN A BIDDER IS REQUESTED TO AND DOES VERIFY HIS BID, THE SUBSEQUENT ACCEPTANCE OF THE BID CONSUMMATES A VALID AND BINDING CONTRACT. SEE 18 COMP. GEN. 942, 947, AND 27 ID. 17. HOWEVER, IN THE INSTANT MATTER DESPITE THE VERIFICATION REQUESTED BY THE CONTRACTING OFFICER, ENFORCEMENT OF THE CONTRACT WOULD REQUIRE THE CONTRACTOR TO FURNISH THE ARTICLES FOR APPROXIMATELY ONE-FIFTH OF THEIR REASONABLE VALUE AND MUST BE REGARDED AS INEQUITABLE.

IN VIEW OF THE FOREGOING, AND SINCE THE ERROR WAS ALLEGED AND ESTABLISHED PROMPTLY AFTER RECEIPT OF AWARD, THE CONTRACT MAY BE CORRECTED TO PROVIDE FOR PAYMENT OF THE INTENDED QUOTATION OR, IN VIEW OF THE LENGTH OF TIME THAT HAS ELAPSED, MAY BE CANCELLED WITHOUT LIABILITY, AS RECOMMENDED BY THE CONTRACTING OFFICER.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT AND THE ABSTRACT OF BIDS, ..END :