B-141277, DEC. 17, 1959

B-141277, DEC. 17, 1959

TO THE SECRETARY OF AGRICULTURE:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 17, 1959, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, REQUESTING A DECISION AS TO WHETHER PROTECTIVE COATINGS CORPORATION MAY BE RELIEVED FROM PERFORMANCE OF ITS CONTRACT DATED JUNE 15, 1959, (PURCHASE ORDER NO. E-6907-ARS-59) FOR THE FURNISHING OF 150,000 MOLDPROOF PAPER BAGS.

THE AGRICULTURAL RESEARCH SERVICE, EASTERN REGIONAL BUSINESS OFFICE, AT PHILADELPHIA, ISSUED AN INVITATION FOR BIDS--- TO BE OPENED MAY 20, 1959-- - FOR THE PURCHASE OF 150,000 MOLDPROOF PAPER BAGS, TO BE IN ACCORDANCE WITH THE SPECIFICATIONS AS SET OUT THEREIN. THREE BIDS WERE RECEIVED. THE LOWEST BID WAS IN THE AMOUNT OF $31.30 PER M BAGS, OR A TOTAL OF $4,695, AND WAS SUBMITTED BY PROTECTIVE COATINGS CORPORATION. THE SECOND BID SUBMITTED BY MR. FREDERICK P. WEINER WAS IN THE AMOUNT OF $6,144 AND THE THIRD BID SUBMITTED BY BEMIS BROTHER BAG COMPANY WAS IN THE AMOUNT OF $54.45 FOR M BAGS, OR A TOTAL OF $8,167.50. AWARD WAS MADE TO PROTECTIVE ON JUNE 15, 1959.

BY LETTER DATED JUNE 16, 1959, PROTECTIVE REQUESTED THE CONTRACTING OFFICER TO RELIEVE IT OF THE RESPONSIBILITY OF FILLING THE ORDER SINCE ITS INTENDED SUPPLIER ADVISED THAT HE HAD QUOTED ON WET STRENGTH KRAFT BAGS, AND COULD NOT SUPPLY MOLDPROOF KRAFT BAGS. THEREAFTER, BY LETTER DATED JUNE 23, 1959, PROTECTIVE ADVISED THE CONTRACTING OFFICER THAT IT HAD FAILED TO HAVE ITS SUPPLIER FILL THE ORDER AND THAT IT HAD FAILED TO FIND A NEW SUPPLIER. THE CONTRACTING OFFICER THEN FURNISHED PROTECTIVE WITH THE NAMES OF THE OTHER TWO BIDDERS IN THE EVENT THAT IT CHOSE TO USE EITHER OF THE FIRMS AS A SOURCE OF SUPPLY. THE CONTRACTOR CONTACTED THESE TWO BIDDERS BUT ONLY ONE BIDDER, BEMIS BROTHER BAG COMPANY, RESPONDED. BEMIS QUOTED A PRICE OF $55 PER M BAGS. SINCE PURCHASE AT THIS PRICE BY THE CONTRACTOR WOULD RESULT IN A LOSS OF OVER $3,500, IT HAS REQUESTED RELIEF FROM PERFORMANCE OF ITS CONTRACT.

IT IS NOTED THAT THE CONTRACTOR, IN ITS LETTER OF JULY 24, 1959, TO THE CONTRACTING OFFICER, STATES THAT WHEN BEMIS WAS CONTACTED FOR A QUOTATION ON SUPPLYING THE BAGS IN QUESTION, BEMIS VOLUNTEERED THE INFORMATION THAT "THEY HAD BEEN SUPPLYING THIS BAG TO YOUR AGENCY FOR SOME PERIOD OF TIME AND WERE AT A LOSS TO EXPLAIN WHY OUR PRICE OF $31.30/M WAS NOT QUESTIONED PRIOR TO MAKING THE AWARD.' IN VIEW OF THIS STATEMENT, ADVICE WAS INFORMALLY REQUESTED FROM A REPRESENTATIVE OF YOUR AGENCY AS TO THE CORRECTNESS THEREOF. IN REPLY WE HAVE BEEN ADVISED THAT PREVIOUS PROCUREMENTS OF MOLDPROOF KRAFT BAGS HAVE BEEN MADE BY THE CONTRACTING OFFICER HERE INVOLVED. AS TO BIDS OPENED ON DECEMBER 2, 1955, FOR FURNISHING 150/M BAGS, THREE BIDS WERE RECEIVED BUT THE TWO LOW BIDDERS' OFFERS DID NOT MEET SPECIFICATIONS AND THEREFORE THE AWARD WAS MADE TO BEMIS FOR $50.25 PER M BAGS. AS TO BIDS OPENED ON JANUARY 22, 1957, FOR FURNISHING 100 M BAGS, ONLY ONE BID WAS RECEIVED AND AWARD WAS MADE TO BEMIS AT $54.45 PER M BAGS. LIKEWISE, AS TO BIDS OPENED ON AUGUST 28, 1958, FOR FURNISHING 150 M BAGS ONLY ONE BID WAS RECEIVED AND AWARD WAS MADE TO BEMIS AT $54.45 PER M BAGS.

IT MUST BE CONCLUDED FROM THE EVIDENCE IN THIS CASE THAT THE CONTRACTING OFFICER SHOULD NOT HAVE MADE AWARD AT THE BID PRICE OF $31.30 PER M BAGS WITHOUT REQUESTING THE CONTRACTOR TO VERIFY ITS BID PRICE SINCE IT IS APPARENT FROM THE RECORD OF PRIOR PURCHASES THAT EITHER THERE WAS AN ERROR IN COMPUTATION OF THE BID PRICE OR IT WAS INTENDED TO DELIVER BAGS NOT MEETING SPECIFICATIONS. NO VALID AND ENFORCEABLE CONTRACT RESULTED FROM AN AWARD IN THESE CIRCUMSTANCES.

ACCORDINGLY, THE CONTRACTOR MAY BE RELIEVED FROM PERFORMANCE OF THE CONTRACT.