B-162891, FEB. 7, 1968

B-162891, FEB. 7, 1968

CONTRACTS - MISTAKES - RELIEF DECISION TO GSA CONCERNING REQUEST FOR PRICE ADJUSTMENT BY DAVIS WIRE CORPORATION FOR FURNISHING CHAIN LINK FENCING TO GSA ON BASIS OF ERROR IN BID. A BIDDER WHOSE UNIT PRICES FOR ONE ITEM UNDER A REQUIREMENTS TYPE CONTRACT WAS 20 TO 25 PERCENT LOWER THAN THOSE OF THE ONLY OTHER BIDDER SHOULD HAVE HAD HIS BID QUESTIONED BY THE CONTRACTING OFFICER ON THE BASIS OF A POSSIBILITY OF MISTAKE AND THEREFORE, SINCE AWARD WAS MADE WITHOUT REQUEST FOR VERIFICATION CONTRACT PRICES MAY BE INCREASED TO AN AMOUNT EQUAL TO BUT NOT EXCEEDING PRICES OF OTHER BIDDER.

TO MR. KNOTT:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 7, 1967, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, SUBMITTING FOR OUR CONSIDERATION A REQUEST BY THE DAVIS WIRE CORPORATION (DAVIS) FOR AN UPWARD ADJUSTMENT IN THE PRICE OF CONTRACT NO. GS-10S-19579, AWARDED BY REGION 10, GENERAL SERVICES ADMINISTRATION, AUBURN, WASHINGTON, ON JULY 15, 1965. THE CONTRACT COVERED THE PURCHASE OF AN INDEFINITE QUANTITY OF CHAIN LINK WIRE MESH FENCING, FSC 56, CLASS 5660, IN ACCORDANCE WITH INTERIM FEDERAL SPECIFICATION RR-F-00191C, FEBRUARY 14, 1963. THE ADVERTISED SPECIFICATION REQUIRED THAT 0.192 INCH DIAMETER WIRE BE USED IN THE FENCING SUPPLIED UNDER THE RESULTING CONTRACT.

GROUP 1 OF THE INVITATION SOLICITED BIDS FOR ZINC-COATED, GRADE A (2.0 OUNCE) WIRE ON A UNIT PRICE F.O.B. DESTINATION BASIS PER ROLL OF WIRE FOR ITEMS 1A THROUGH 1I. PARAGRAPH NO. 3, AT PAGE 3 OF THE INVITATION, PROVIDED THAT ITEMS NO. 1A THROUGH 1I WOULD BE AWARDED TO THE LOWEST AGGREGATE BIDDER ON THAT ITEM. THE RECORD INDICATES THAT AWARD WAS MADE ON JULY 15, 1965, TO DAVIS WHOSE AGGREGATE BID PRICES WERE APPROXIMATELY 20 TO 25 PERCENT LOWER THAN THE BID PRICES OF THE UNITED STATES STEEL CORPORATION (USS), THE ONLY OTHER BIDDER.

ON SEPTEMBER 8, 1965, DAVIS ALLEGED THAT ITS BID PRICES HAD BEEN COMPUTED ON THE BASIS OF 0.1483 INCH DIAMETER WIRE AND STATED IN ITS LETTER OF SEPTEMBER 9, 1965, THAT: "AS STATED, OUR QUOTATION ON THE CHAIN LINK FENCE WAS ERRONEOUSLY COMPUTED, BASED ON THE DATA FOR .1483 DIAMETER WIRE INSTEAD OF .192. WE FULLY UNDERSTAND OUR RESPONSIBILITY FOR THIS OVERSIGHT. IF THERE IS SOME WAY FOR THIS TO BE REQUOTED, WE WOULD APPRECIATE THE OPPORTUNITY.'

DAVIS BY LETTER DATED FEBRUARY 16, 1966, REQUESTED THAT THE CONTRACT PRICES BE REVISED UPWARDS BY AN AMOUNT COMMENSURATE WITH THE DIFFERENCE IN COST BETWEEN THE TWO SIZED WIRES. THEREAFTER, IN SUPPORT OF ITS CLAIM FOR RELIEF, DAVIS SUBMITTED A COMMERCIAL PRICE LIST, A TABLE OF INTENDED BID PRICES WITH FREIGHT CHARGES, AND A SAMPLE COST COMPUTATION FOR ONE OF THE SUBITEMS SHOWING THE COST OF MATERIAL, FREIGHT AND A 15 PERCENT MARKUP FOR A 36 INCH HIGH, 100 FOOT ROOL OF $73.70 AS COMPARED TO THE ONLY OTHER BID OF $54.60. DAVIS SUBMITTED A BID OF $40.95 FOR THIS SUBITEM.

WE ARE ADVISED THAT DURING THE PERIOD OF CONTRACT PERFORMANCE DAVIS SATISFACTORILY DELIVERED QUANTITIES OF DIFFERENT SIZED ROLLS OF THE SPECIFIED FENCING TO VARIOUS AGENCIES IN THE TOTAL AMOUNT OF $14,998.17, AND THAT THE REQUESTED CONTRACT PRICE REVISION AMOUNTS TO A TOTAL INCREASE IN THE CONTRACT PRICE OF APPROXIMATELY $3,000.

THE GENERAL COUNSEL HAS RECOMMENDED THAT THE CONTRACT PRICE BE INCREASED IN ACCORDANCE WITH DAVIS' REQUEST TO AN AMOUNT EQUAL TO, BUT NOT EXCEEDING, THE PRICES SUBMITTED BY USS ON THE BASIS THAT THE EVIDENCE SUBMITTED BY DAVIS CONCLUSIVELY SHOWS THAT ITS BIDS WERE ERRONEOUSLY COMPUTED, AND BECAUSE THE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID. IN THE LATTER REGARD, THE CONTRACTING OFFICER HAS STATED THAT THE PRICES BID BY USS WERE APPROXIMATELY THE SAME AS THE PREVIOUS CONTRACT PRICES AND, AS SUCH, WERE FAIR AND REASONABLE. HE STATED FURTHER, THAT IN A BASIC INDUSTRY, LIKE STEEL, THE FACT THAT THE UNIT PRICES BID BY DAVIS WERE 20 TO 25 PERCENT LOWER THAN THOSE OF THE ONLY OTHER BIDDER SHOULD HAVE ALERTED HIM TO THE POSSIBILITY OF MISTAKE IN BID.

ON THE RECORD BEFORE US, AND SINCE THE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF ERROR REQUIRING HIM TO REQUEST VERIFICATION OF THE DAVIS BIDS BEFORE AWARD, WE AGREE THAT THE REQUESTED RELIEF SHOULD BE GRANTED.

ACCORDINGLY, THE CONTRACT PRICES MAY BE INCREASED IN THE MANNER SUGGESTED IN THE LETTER OF THE GENERAL COUNSEL TO AN AMOUNT EQUAL TO, BUT NOT EXCEEDING, THE BID PRICES OF THE UNITED STATES STEEL CORPORATION. SEE 37 COMP. GEN. 685, AND CASES CITED THEREIN. A REFERENCE TO THE DECISION SHOULD BE MADE ON THE VOUCHER COVERING THE ADDITIONAL PAYMENT.

THE ENCLOSURES RECEIVED WITH THE LETTER OF NOVEMBER 7, 1967, ARE RETURNED HEREWITH AS REQUESTED.