B-163898, JUN. 6, 1968

B-163898, JUN. 6, 1968

TO MR. SECRETARY:

REFERENCE IS MADE TO A LETTER DATED APRIL 30, 1968, WITH ENCLOSURES, FROM THE CHIEF, PAY AND TRAVEL DIVISION, OFFICE, CHIEF OF FINANCE AND ACCOUNTING, OFFICE OF THE COMPTROLLER OF THE ARMY, RELATING TO A CLAIM OF $722.70 BY THE KEARNEY COMPANY, ST. LOUIS, MISSOURI, ALLEGED TO BE DUE UNDER PURCHASE ORDER NO. 66-9912.

ACCORDING TO THE RECORD, ON MARCH 10, 1966, THE KEARNEY COMPANY (KEARNEY) FURNISHED A WRITTEN QUOTATION OF ?73 PER BOX FOR 10 BOXES OF CLAMPS, LACIT, 100 PER BOX KEARNEY CO. NO. 19234, FOR A TOTAL OF $7.30. PURSUANT TO THE QUOTATION PURCHASE ORDER NO. 66-9912 WAS ISSUED ON MARCH 17, 1966, AND THE ITEMS WERE DELIVERED ON APRIL 11, 1966. PRIOR TO DELIVERY BY INVOICE NO. 45838 DATED MARCH 31, 1966, KEARNEY BILLED THE FINANCE AND ACCOUNTING OFFICE AT FORT GORDON, GEORGIA, FOR $730.00 AND ON MAY 12, 1966, KEARNEY WAS SENT A CHECK IN THE AMOUNT OF $7.30 BY LETTER OF MAY 31, 1966, KEARNEY ADVISED THE FINANCE AND ACCOUNTING OFFICE THAT IT HAD MADE A MISTAKE ON ITS MARCH 10 QUOTATION AND THAT INSTEAD OF ?73 PER BOX OF 100, THE QUOTATION SHOULD HAVE BEEN ?73 PER CLAMP FOR A TOTAL OF $73.00 PER BOX.

IT IS NOTED THAT ON THE FACE OF THE REQUEST FOR QUOTATIONS (STANDARD FORM 18) THERE IS A STATEMENT THAT "THIS IS A REQUEST FOR INFORMATION AND QUOTATIONS FURNISHED ARE NOT OFFERS.' THIS LANGUAGE IS IN CONFORMITY WITH THE APPLICABLE REGULATIONS, WHICH STATE THAT STANDARD FORM 18 IS TO BE USED FOR THE PURPOSE OF OBTAINING PRICE, DELIVERY AND RELATED INFORMATION AND QUOTATIONS SUBMITTED ON STANDARD FORM 18 ARE NOT TO BE CONSTRUED AS OFFERS. CONSEQUENTLY, THE ISSUANCE OF A PURCHASE ORDER BY THE GOVERNMENT PURSUANT TO THESE QUOTATIONS DOES NOT CREATE A BINDING CONTRACT, THE PURCHASE ORDER AMOUNTING TO NOTHING MORE THAN AN OFFER WHICH MUST BE ACCEPTED, EITHER IN WRITING OR BY PERFORMANCE, BEFORE A BINDING CONTRACT COMES INTO EXISTENCE. SEE ARMED SERVICES PROCUREMENT REGULATION (ASPR) 16 -102.1 AND FEDERAL PROCUREMENT REGULATIONS (FPR) 1-16.201-1 AND 1-16.201- 4, WHICH WOULD ALSO BE APPLICABLE TO THIS PROCUREMENT SINCE A STANDARD GOVERNMENT FORM IS INVOLVED. ALSO SEE B-134926, FEBRUARY 12, 1958, AND 37 COMP. GEN. 258. IN THE PRESENT CASE THERE IS NO EVIDENCE OF A WRITTEN ACCEPTANCE AND THE ONLY EVIDENCE OF PERFORMANCE IS DELIVERY ON APRIL 11, 1966. THUS, IT WOULD APPEAR THAT THE PROCURING ACTIVITY WAS IN POSSESSION OF THE ORIGINAL INVOICE FOR $730.00 PRIOR TO THE TIME THAT A BINDING CONTRACT CAME INTO EXISTENCE. SEE B-138123, FEBRUARY 3, 1959. EVEN ASSUMING THAT THE QUOTATION OF ?73 PER BOX FOR AN ITEM THAT SELLS FOR APPROXIMATELY 100 TIMES THAT AMOUNT DID NOT PUT THE ACTIVITY ON NOTICE THAT THE PRICE WAS OUT OF LINE, CERTAINLY WHEN KEARNEY'S INVOICE WAS RECEIVED BY THE ACTIVITY AND COMPARED WITH ITS QUOTATION, THE ACTIVITY SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR. UNDER THESE CIRCUMSTANCES A BINDING CONTRACT WOULD NOT RESULT AND THIS OFFICE WOULD GRANT RELIEF. ALTHOUGH WE RECOGNIZE THE FACT THAT THE OFFICER WHO ACCEPTED THE QUOTATION AND SENT OUT THE PURCHASE ORDER MIGHT NOT HAVE KNOWN WHAT THE ITEMS IN QUESTION SHOULD SELL FOR, WE FEEL THAT SUFFICIENT JUSTIFICATION EXISTS FOR IMPUTING NOTICE IN VIEW OF THE GROSS DISPARITY BETWEEN THE QUOTATION AND THE INTENDED PRICE OF THE ITEM, AS SUPPORTED BY ITS NET PRICE SCHEDULE. IN ANY EVENT, THE RECORD LEAVES LITTLE DOUBT AS TO THE PRICE KEARNEY INTENDED TO QUOTE AND TO REQUIRE KEARNEY TO FURNISH THESE ITEMS FOR A TOTAL PRICE WHICH IS CONSIDERABLY LESS THAN THEIR ACQUISITION COST WOULD BE UNCONSCIONABLE UNDER THE CIRCUMSTANCES. SEE B- 146413, AUGUST 1, 1961, AND B-162043, JULY 26, 1967.

ACCORDINGLY, KEARNEY MAY BE PAID THE AMOUNT OF $722.70, AS RECOMMENDED BY THE CONTRACTING OFFICER.