B-138832, SEP. 17, 1959

B-138832, SEP. 17, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 25, 1959, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO WHETHER RELIEF MAY BE GRANTED GUILD PAPER PRODUCTS COMPANY IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION FOR BIDS NO. DA-09-200-58-55, ISSUED BY FORT MCPHERSON, GEORGIA.

THE INVITATION REQUESTED BIDS FOR FURNISHING VARIOUS ITEMS OF FOOD PACKAGING MATERIALS. ITEMS 1 THROUGH 5 COVERED MEAT TRAYS OF VARIOUS SIZES. THE BID OF GUILD PAPER PRODUCTS COMPANY, BEING THE LOWEST RECEIVED, WAS ACCEPTED ON JUNE 30, 1958, ON JULY 28, 1958, THE CONTRACTOR BILLED FOR TWICE THE AMOUNT OF THE CONTRACT PRICE FOR THE ITEMS AND DELIVERY OF THE SUPPLIES WAS COMPLETED AUGUST 12, 1958. THE INVOICE WAS CORRECTED TO THE PRICE SET FORTH IN THE CONTRACT AND PAYMENT WAS MADE ACCORDINGLY ON SEPTEMBER 16, 1958.

BY LETTERS OF NOVEMBER 18, 1958, AND JANUARY 28, 1959, THE CONTRACTOR ACKNOWLEDGED RECEIPT OF THE REDUCED AMOUNT AND ADVISED THAT UPON CHECKING IT WAS DISCOVERED THAT AN ERROR HAD BEEN MADE IN ITS ORIGINAL BID IN THAT THE PRICES QUOTED WERE ONLY HALF WHAT THEY SHOULD HAVE BEEN. EXPLANATION OF THE ERROR IT WAS STATED THAT THE PRICE LIST FOR THE TREATED TRAYS LISTED THE PRICES PER CASE AND THAT THE SIZE TRAY LISTED FIRST WAS PACKED 1,000 PER CASE AND THAT THE REST OF THE SIZES, INCLUDING ALL THE SIZES COVERED BY THE INSTANT CONTRACT, WERE PACKED 500 TO THE CASE AND THAT, THEREFORE, THE PRICE QUOTED WAS BASED ON THE 1,000 RATHER THAN 500 PER CASE, OR EXACTLY HALF OF THE INTENDED BID PRICE. THE PRICE LIST SUBMITTED IN SUPPORT OF THE ALLEGED ERROR SUPPORTS THE ALLEGATION MADE. THE CONTRACTOR REQUESTS THE ADDITIONAL SUM OF $286.50 FOR ITEMS 1, 2, 3, AND 5. ON ITEM 4 THERE WAS A CHANGE IN THE SIZE OF THE TRAYS AND THE PRICE WAS ADJUSTED AT THAT TIME.

THE CONTRACTING OFFICER'S STATEMENT IS IN PART AS FOLLOWS:

"IT IS THE OPINION OF THE UNDERSIGNED THAT A BONAFIDE MISTAKE WAS MADE IN THIS INSTANCE AND THAT THE UNDERSIGNED CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID PRICE PRIOR TO AWARD. THIS OPINION IS BASED ON THE FACT THAT THE PRICES QUOTED BY GUILD PAPER COMPANY ON ITEMS 1 THRU 5 WERE LESS THAN 1/2 OF THE PRICES QUOTED BY THE NEXT LOW BIDDER AMONG FOUR OTHER BIDDERS ON THESE ITEMS AND THE ADJUSTED AMOUNT AS RECOMMENDED IN FOLLOWING PARAGRAPH WOULD STILL MAKE THE COST TO THE GOVERNMENT LESS THAN IF AWARD HAD BEEN MADE TO THE NEXT LOW BIDDER.'

WE AGREE THAT THE CONTRACTING OFFICER SHOULD HAVE NOTED THE PROBABILITY OF ERROR IN THE BID AND THAT HE SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD. IN THE CIRCUMSTANCES, SINCE THE CONTRACTOR'S BILLING WAS CONSISTENT WITH ITS CLAIM OF ERROR AND SINCE THE ERROR WAS ALLEGED AND PROVEN REASONABLY PROMPTLY THEREAFTER, THE CONTRACTOR MAY BE PAID THE ADDITIONAL SUM OF $286.50 AS RECOMMENDED BY THE CONTRACTING OFFICER.

THE ASSISTANT SECRETARY FURTHER REQUESTS TO BE ADVISED AS TO WHETHER THE AUTHORITY GRANTED TO THE DEPARTMENT OF THE ARMY IN OUR LETTERS OF B-123539 OF JULY 26, 1955, JANUARY 6, 1956, AND MAY 21, 1958,PERMITS THE RESOLUTION BY ADMINISTRATIVE DETERMINATION OF SIMILAR CASES; I.E., WHERE RELIEF IN AN AMOUNT NOT EXCEEDING $500 IS REQUESTED AFTER PAYMENT IS MADE IN THE PREVIOUSLY STIPULATED AMOUNT. YOU ARE ADVISED THAT SUCH CASES MAY BE RESOLVED ADMINISTRATIVELY UNDER THE AUTHORITY GRANTED IN THE SAID LETTERS, PROVIDED INDICATION OF THE ERROR IS RECEIVED WITHIN A REASONABLE TIME AFTER PAYMENT.