B-148631, MAY 10, 1962

B-148631, MAY 10, 1962

TO HIMPE GEORGES:

REFERENCE IS MADE TO YOUR LETTER DATED MARCH 20, 1962, REQUESTING REVIEW OF OUR SETTLEMENT DATED DECEMBER 1, 1961, WHICH DISALLOWED YOUR CLAIM FOR REFUND OF $403 REPRESENTING THE AMOUNT PAID BY YOU FOR ITEM NO. 50 ON SALES CONTRACT NO. (61-745/S-61-420.

IN RESPONSE TO BID INVITATION NO. 61-745-5-61-15 ISSUED BY CONTRACT SALES BRANCH, BURTONWOOD SUBSISTENCE DEPOT (USAF), RAF STATION BURTONWOOD, MR. WARRINGTON, LANCASHIRE, ENGLAND, OFFERING FOR SALE CERTAIN GOVERNMENT SURPLUS PROPERTY, AS LISTED AND DESCRIBED THEREIN, YOU SUBMITTED A BID WITH PRICE QUOTATIONS ON A NUMBER OF THE ADVERTISED ITEMS, INCLUDING ITEM NO. 50 HERE INVOLVED. FOUR BIDS IN THE RESPECTIVE AMOUNTS OF $403, $99.75, $73.06, AND $56.20 WERE RECEIVED ON ITEM NO. 50. YOUR BID OF $403, BEING THE HIGHEST, WAS ACCEPTED AND AWARD OF THE "TRAILER, CARGO, 2 WHEELED" ADVERTISED UNDER THAT ITEM WAS MADE TO YOU WITH OTHER ITEMS ON CONTRACT NO. (61-745/S-61-420 AT A TOTAL CONTRACT PRICE OF $14,999. SUBSEQUENT TO THE AWARD OF THE CONTRACT YOU ADVISED THE CONTRACTING OFFICER ON APRIL 4, 1961, BY TELEPHONE--- CONFIRMED BY LETTER OF THE SAME DATE--- THAT YOU HAD MADE AN ERROR IN YOUR BID, EXPLAINING THAT YOU HAD INTENDED TO PLACE YOUR BID OF $403 ON ITEM NO. 51 FOR A "TRAILER-SEMI, REFUELLING" BUT IN THE PREPARATION OF YOUR BID "$403" WAS ERRONEOUSLY PLACED OPPOSITE ITEM NO. 50 AS APPEARS ON YOUR BID, AND YOU REQUESTED THAT ITEM NO. 50 BE CANCELED FROM THE CONTRACT. IN SUPPORT OF YOUR ALLEGATION OF ERROR IN YOUR BID YOU FORWARDED A COPY OF THE SALES ADVERTISEMENT AS REPRESENTING YOUR WORKSHEET USED IN THE PREPARATION OF YOUR BID, WHICH SHOWS ON PAGE 24 THEREOF AN ENTRY IN PEN OF "$403" OPPOSITE ITEM NO. 51 AND NOTHING OPPOSITE ITEM NO. 50. THE CONTRACTING OFFICER IN LETTER DATED APRIL 12, 1961, ADVISED YOU TO FORWARD PAYMENT OF THE FULL BALANCE DUE UNDER THE CONTRACT, UPON RECEIPT OF WHICH HE WOULD FORWARD YOUR CLAIM TO HIGHER AUTHORITY FOR CONSIDERATION AS TO DELETION OF ITEM NO. 50 FROM THE CONTRACT. THE RECORD SHOWS THAT ON APRIL 24, 1961, THE CONTRACTING OFFICER RECEIVED FROM YOU A BANK DRAFT IN THE AMOUNT OF $14,999 IN FULL PAYMENT OF ALL PROPERTY SOLD TO YOU UNDER CONTRACT NO. (61-745/S-61-420, INCLUDING $403 FOR ITEM NO. 50. YOUR CLAIM FOR CANCELLATION OF ITEM NO. 50 FROM THE CONTRACT WAS THEN FORWARDED TO HIGHER AUTHORITY FOR CONSIDERATION. HOWEVER, ON APRIL 26, 1961, THE "TRAILER, CARGO, 2 WHEELED" UNDER ITEM NO. 50 OF THE CONTRACT WAS REMOVED FROM THE BASE BY YOUR AGENT ON YOUR SPECIFIC INSTRUCTIONS IN WRITING (LETTER UNDATED), AND THE CONTRACTING OFFICER THEN ADVISED THE HIGHER AUTHORITY TO SUSPEND CONSIDERATION OF YOUR CLAIM. THE RECORD SHOWS THAT YOU LATER RETURNED THE PROPERTY TO THE DISPOSAL BASE AND AGAIN REQUESTED CANCELLATION OF ITEM NO. 50 FROM THE CONTRACT. YOUR CLAIM WAS THEREAFTER FORWARDED ON AUGUST 24, 1961, TO OUR CLAIMS DIVISION FOR DIRECT SETTLEMENT AND, FOR THE REASONS STATED IN OUR CERTIFICATE OF SETTLEMENT DATED DECEMBER 1, 1961, THE CLAIM WAS DISALLOWED.

IN YOUR LETTER OF MARCH 20, REQUESTING REVIEW OF OUR DISALLOWANCE ACTION, YOU CONTEND THAT BECAUSE OF THE WIDE DIFFERENCE BETWEEN YOUR BID OF $403 AND THE THREE OTHER BIDS RECEIVED ON ITEM NO. 50, THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF AN ERROR IN YOUR BID.

THE CONTRACTING OFFICER IN HIS STATEMENT OF FACTS AS TO THE SALES TRANSACTION HAS STATED THAT AT THE TIME OF EVALUATING THE BIDS RECEIVED ON ITEM NO. 50, HE HAD NO KNOWLEDGE EITHER ACTUAL OR CONSTRUCTIVE OF ANY ERROR IN YOUR BID, THAT HE DID NOT SUSPECT ERROR IN YOUR BID AS TO ITEM NO. 50 SINCE THIS WAS A SALE OF SURPLUS PROPERTY AND IT WAS CONSIDERED POSSIBLE THAT YOU HAD A SPECIAL REQUIREMENT FOR THAT ITEM AND HAD PLACED A HIGH OFFER FOR THIS REASON.

THE ESTABLISHED RULE IS THAT, WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES OF THE ERROR UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER WAS CHARGEABLE WITH CONSTRUCTIVE NOTICE OF SUCH ERROR SO AS TO MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249.

IT IS CLEAR FROM THE RECORD THAT THE ERROR, AS ALLEGED, WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO NEGLIGENCE OR OVERSIGHT IN THE PREPARATION OF THE BID. SUCH ERROR WAS UNILATERAL--- NOT MUTUAL--- AND WOULD NOT ENTITLE YOU TO ANY RELIEF. THE QUESTION THEN FOR CONSIDERATION IS WHETHER THE ACCEPTANCE OF YOUR BID AS TO ITEM NO. 50 BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT.

WITH RESPECT TO THE QUESTION OF NOTICE OF ERROR, YOU DID NOT ALLEGE ERROR IN YOUR BID UNTIL AFTER ACCEPTANCE OF THE BID AND AWARD OF THE CONTRACT. YOUR BID WAS CLEAR AND UNAMBIGUOUS AND THERE WAS NOTHING THEREON TO INDICATE THAT YOUR BID ON ITEM NO. 50 WAS NOT INTENDED FOR THAT ITEM. WHILE YOUR BID ON ITEM NO. 50 WAS CONSIDERABLY HIGHER THAN THE OTHER THREE BIDS RECEIVED ON THAT ITEM, THE CONTRACTING OFFICER CANNOT BE CHARGED WITH NOTICE OF THE ERROR SINCE THIS WAS A SALE OF SURPLUS GOVERNMENT PROPERTY AND IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON SUCH PROPERTY A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683. IN THAT CASE THE PRICE DISPARITY IN THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30.

THE COURT, AT PAGE 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD * * *. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO * * * ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF YOUR BID BY THE CONTRACTING OFFICER, WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR THEREIN, WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO.

ACCORDINGLY, THE AWARD OF ITEM NO. 50 ON SALES CONTRACT NO. (61 745/S-61- 420 MAY NOT BE ..END :