Government Contracts Monitor
Where’s the Beef? A Contractor Learns the Hard Way that Ground Beef Does Not Taste Like Chicken
February 19, 2013
A government contractor recently learned the hard way that it should quote the right price for the right product when it issues a quote to the government. In Lacey Newday Consulting, LLC (“Lacey”) v. Department of Justice, CBCA Nos. 2782, 2832 , the Bureau of Prisons issued an Request for Quotation to supply 10,000 pounds of ground beef (80/20 to be exact) for use at the United States Prison in Atwater, California (USP Atwater). Lacey submitted a quotation at a unit price of $0.60 per pound. Seven other quotations were presented in a range of $1.66/lb to $2.40/lb. On December 21, 2011, the BOP contracting officer had a telephone call with Lacey’s principal, and asked whether the price for the ground beef was good and Lacey confirmed the price. The BOP issued a written purchase order on January 11, 2012, and Lacey shipped the ground beef on January 17, 2012.
Alas, Lacey found out that they had mistakenly quoted the price for, remarkably, chicken legs rather than 80/20 ground beef. The Board’s analysis considered when the mistake was discovered, when it was communicated to the BOP, and its impact on the January 11, 2012 purchase order. Lacey claimed that the mistake was communicated to the BOP in December 2011, but the BOP contracting officer stated that she first learned of the issue on January 20, 2012 when she received an invoice with a higher unit price per pound ($2.20/lb). The contracting officer stated that she would not have allowed Lacey to perform at the higher price if she was presented with the information before issuing the purchase order. Because of the price difference, the contracting officer applied an administrative deduction of $14,621.81. Lacey appealed that decision.
The Board denied the appeal. The Board relied heavily on email communications, including an email chain from January 12, 2012, the day after the purchase order. There, after Lacey emailed the contracting officer and asked whether they could supply a better kind of ground beef (85/15), the contracting officer responded: “[f]or the same price of .60/lb?” Lacey then responded in the affirmative: “[s]ame price $.60!” Citing the FAR regarding the legal effect of quotations, the Board held that the January 11, 2012 purchase order was the government’s offer, and “the email correspondence on January 12, 2012, can only be viewed as Lacey Newday’s pre-delivery confirmation of the $0.60/lb unit price for the ground beef,” so that, “when delivery was made on January 17, 2012, it signified Lacey Newday’s clear and unequivocal acceptance of the offer to purchase 10,000 lbs. of ground beef at $0.60/lb.” As a result, the federal prisoners got to eat some high quality, but really inexpensive ground beef for dinner and lunch.
This case demonstrates that you should always check, double check, and triple check your emails before you send one to a contracting officer, especially if you are confirming a quote!
Brian Stolarz is the attorney responsible for the content of this article.