B-144262, NOV. 15, 1960

B-144262, NOV. 15, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 13, 1960, WITH ENCLOSURES, FROM THE ACTING CHIEF, CONTRACTS BRANCH, PROCUREMENT DIVISION, OFFICE OF THE DEPUTY CHIEF OF STAFF FOR LOGISTICS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE WHITE CASTLE CO. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. DA-38-042-AIII-1115 IS BASED.

THE PURCHASING AND CONTRACTING OFFICER, FORT JACKSON, SOUTH CAROLINA, BY INVITATION NO. AJJPR 38-042-60-45 REQUESTED BIDS FOR FURNISHING THE NECESSARY SERVICES, MATERIALS AND EQUIPMENT TO PERFORM CERTAIN JANITORIAL SERVICES DURING THE PERIOD JULY 1, 1960, THROUGH JUNE 30,1961. RESPONSE THE WHITE CASTLE CO. SUBMITTED A BID DATED JUNE 14, 1960, OFFERING TO PERFORM THE SERVICES AT THE UNIT PRICES SET FORTH OPPOSITE EACH ITEM. IT IS REPORTED THAT ON THE BASIS OF THE UNIT PRICES SPECIFIED IN THE BID OF THE WHITE CASTLE CO., THE MONTHLY COST TO THE GOVERNMENT FOR THE SERVICES TO BE PERFORMED BY THE COMPANY WOULD BE $3,311.15. THE BID OF THE WHITE CASTLE CO. WAS ACCEPTED ON JUNE 22, 1960.

THE RECORD INDICATES THAT ON JULY 8, 1960, MR. PRICKETT OF THE WHITE CASTLE CO. VISITED THE CONTRACTING OFFICE AND REQUESTED A CLARIFICATION OF PARAGRAPH TP-7 OF THE TECHNICAL PROVISIONS OF THE CONTRACT PERTAINING TO THE REPLENISHMENT OF PAPER TOWELS, TOILET PAPER, AND SOAP; AND THAT MR. PRICKETT WAS INFORMED THAT UNDER THE PROVISIONS OF THE CONTRACT, IT WAS THE CONTRACTOR'S RESPONSIBILITY TO FURNISH THE REST ROOM SUPPLIES.

IN A LETTER DATED JULY 11, 1960, THE WHITE CASTLE CO. STATED THAT A VAST MAJORITY OF GOVERNMENT INVITATIONS COVERING JANITORIAL SERVICES DO NOT REQUIRE THE CONTRACTOR TO FURNISH SUCH SUPPLIES AS TOILET TISSUE, PAPER TOWELS AND HAND SOAP; THAT WHILE UNDER THE REFERRED-TO INVITATION THE CONTRACTOR IS REQUIRED TO REPLENISH SUCH SUPPLIES, THESE ITEMS ARE DRAWN FROM GOVERNMENT SUPPLY BY THE CONTRACTOR'S REPRESENTATIVE; AND THAT SINCE THE INVITATION IN QUESTION DID NOT SPECIFICALLY STATE THAT THE CONTRACTOR WOULD BE REQUIRED TO FURNISH REST ROOM SUPPLIES, IT WAS ITS OPINION THAT IT WAS NOT REQUIRED UNDER SUCH CONTRACT TO FURNISH THESE ITEMS. THE COMPANY ALSO STATED THAT IF THE GOVERNMENT PERSISTED IN ITS INTERPRETATION OF THE SPECIFICATIONS, IT WISHED TO FILE A "MISTAKE IN BID" CLAIM FOR AN INCREASE OF $0.001 PER SQUARE FOOT PER MONTH, OR $164.71 PER MONTH. SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED THE WORKSHEET USED IN COMPUTING ITS BID PRICE. THE WORKSHEET LISTS THE NAMES OF VARIOUS ITEMS OF EXPENSE, ONE OF WHICH IS "TOWELS AND TISSUE" AND FOR THAT ITEM NO AMOUNT IS SHOWN.

IT IS REPORTED THAT ON SEPTEMBER 6, 1960, MR. C. W. CHRISMAN OF THE WHITE CASTLE CO. WAS CONTACTED BY TELEPHONE AND REQUESTED TO FURNISH A BREAKDOWN OF "SUPPLIES EXPENSE 6.5 PERCENT $156.85" APPEARING ON HIS WORKSHEET. MR. CHRISMAN WAS ALSO REQUESTED TO EXPLAIN HOW HE ARRIVED AT THE FIGURE OF $0.001 PER SQUARE FOOT PER MONTH FOR FURNISHING REST ROOM SUPPLIES. IN A LETTER DATED SEPTEMBER 6, 1960, MR. CHRISMAN LISTED 25 MISCELLANEOUS ITEMS COVERED BY "SUPPLIES EXPENSE" APPEARING ON HIS WORKSHEET. NONE OF THE MISCELLANEOUS ITEMS COVER PAPER TOWELS, TOILET PAPER AND SOAP. EXPLANATION OF HOW HE ARRIVED AT THE FIGURE OF $156.85, MR. CHRISMAN STATED THAT THE COST OF THE MISCELLANEOUS ITEMS OF SUPPLIES RELATES MORE CLOSELY TO THE NUMBER OF MAN HOURS EXPENDED THAN ANY OTHER FACTOR AND THAT DURING THE PAST TWO-YEAR PERIOD HIS COST HAS BEEN APPROXIMATELY 6.5 PERCENT OF WAGES PAID; AND THAT THE WAGES ESTIMATED TO BE PAID IN PERFORMANCE OF THE SUBJECT CONTRACT ARE $2,413 PER MONTH, 6.5 PERCENT OF WHICH IS $156.85.

IT IS REPORTED THAT ON THE BASIS OF THE UNIT PRICES SPECIFIED BY THE FOUR OTHER BIDDERS IN THEIR BIDS, THEIR PRICES ON A MONTHLY BASIS WOULD BE IN THE AMOUNTS OF $3,560.78, $3,916.15, $4,117.63 AND $10,516.06. IT IS FURTHER REPORTED THAT AFTER THE WHITE CASTLE CO. ALLEGED ERROR IN ITS BID, THE TWO NEXT LOWEST BIDDERS WERE REQUESTED TO VERIFY THE BASIS ON WHICH THEIR BID PRICES WERE COMPUTED; AND THAT THEY REPLIED THAT IN COMPUTING THEIR BID PRICES THEY DID NOT CONSIDER THE FURNISHING OF REST ROOM SUPPLIES.

PARAGRAPH TP-7 OF THE TECHNICAL PROVISIONS OF THE CONTRACT PROVIDES, IN PERTINENT PART, AS FOLLOWS:

"* * * ALL REST ROOM SUPPLIES, TOILET TISSUE, HAND TOWELS, LIQUID HAND SOAP, ETC., WILL BE REPLENISHED AND PLACED IN THE APPROPRIATE RECEPTACLES PROVIDED.'

IN HIS REPORT THE CONTRACTING OFFICER STATES THAT HE AGREES WITH THE CONTRACTOR THAT GOVERNMENT INVITATIONS COVERING JANITORIAL SERVICES DO NOT ALWAYS REQUIRE THE CONTRACTOR TO PROVIDE REST ROOM SUPPLIES AND THAT UNDER LAST YEAR'S CONTRACT FOR FURNISHING JANITORIAL SERVICES AT THE INSTALLATION, THE GOVERNMENT FURNISHED THE REST ROOM SUPPLIES. THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE CONTRACT BE AMENDED TO PROVIDE FOR AN INCREASE OF $143.66 PER MONTH, WHICH AMOUNT, IT IS REPORTED, IS BASED ON A UNIT PRICE PER SQUARE FOOT PER MONTH OF $0.000872. IT IS FURTHER REPORTED THAT THE SUM OF $143.66 IS MADE UP OF THE AMOUNTS OF $119.72, THE AMOUNT PER MONTH IT WOULD COST THE GOVERNMENT IF IT PURCHASED THE REST ROOM SUPPLIES IN LARGE QUANTITIES, AND $23.94, THE ADDITIONAL AMOUNT THE CONTRACTOR WOULD HAVE TO PAY BECAUSE OF SMALLER QUANTITY PURCHASES.

WE ARE OF THE OPINION THAT THE SPECIFICATIONS IN THE PRESENT CASE WERE SUBJECT TO POSSIBLE MISINTERPRETATION AND EVIDENCE OF THIS IS INDICATED BY THE FAILURE OF THE TWO NEXT LOWEST BIDDERS TO INCLUDE AN AMOUNT IN THEIR BID PRICES TO COVER THE COST OF THE REST ROOM SUPPLIES. IN THE CIRCUMSTANCES, THE WHITE CASTLE CO. SHOULD NOT BE REQUIRED TO FURNISH THE REST ROOM SUPPLIES AT THE PRICES QUOTED IN ITS BID.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE IS LITTLE ROOM FOR DOUBT THAT THE WHITE CASTLE CO. MADE A BONA FIDE ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, THE WHITE CASTLE CO. MAY BE PAID AT THE MONTHLY RATE OF $143.66 FOR THE REST ROOM SUPPLIES FURNISHED BY IT AND THE COMPANY MAY BE RELIEVED OF THE OBLIGATION OF FURNISHING REST ROOM SUPPLIES DURING THE BALANCE OF THE CONTRACT PERIOD. IN THE EVENT IT IS NOT PRACTICABLE FOR THE GOVERNMENT TO FURNISH THE REST ROOM SUPPLIES, THE COMPANY SHOULD BE REQUESTED TO FURNISH THE SUPPLIES IN QUESTION AND IT MAY BE PAID THEREFOR AT THE MONTHLY RATE OF $143.66.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE VOUCHERS COVERING SUCH PAYMENTS.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENTS, ARE RETURNED.