B-143515, JUL. 22, 1960

B-143515, JUL. 22, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JULY 14, 1960, WITH ENCLOSURES, FROM THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING OUR DECISION AS TO WHETHER THERE PROPERLY MAY BE DENIED THE RELIEF SOUGHT BY THE WESTERN NON-FERROUS METALS CORPORATION, UNDER DEPARTMENT OF THE NAVY SALES CONTRACT NO. N228S-45058.

THE CONTRACT RESULTED WHEN THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, ACCEPTED A BID ON MAY 13, 1960, TOTALING $18,262.42, WHICH THE WESTERN NON -FERROUS METALS CORPORATION SUBMITTED ON VARIOUS ITEMS IN RESPONSE TO SPOT BID SALE INVITATION NO. 2-60-228. AFTER AWARD THE CORPORATION ADVISED THE DISPOSAL DEPARTMENT OF THE SUPPLY CENTER THAT IN ITS HASTE TO MAKE A LATE REVISION OF ITS BID, AN ERROR WAS MADE IN COMPUTING THE PRICE OF $0.1337 EACH FOR THE 10,075 MACHINE BOLTS COVERED BY ITEM NO. 17. THE CORPORATION REQUESTS THAT IT BE RELEASED FROM ITS BID FOR THIS ITEM SINCE IT ALLEGES THAT THE PRICE QUOTED EQUALS ABOUT $0.30 A POUND FOR NAVAL BRASS WHICH IS SOME $0.13 IN EXCESS OF THE TOP MARKET VALUE.

THE SOLE QUESTION FOR CONSIDERATION IN THIS TYPE OF CASE IS, OF COURSE, WHETHER THE GOVERNMENT CONTRACTING OFFICER MAY BE CHARGED WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID PRIOR TO AWARD. IN THIS REGARD, WHILE THERE WAS A SUBSTANTIAL DISPARITY BETWEEN THE HIGH BID OF $0.1337 EACH, SUBMITTED BY THE WESTERN NON-FERROUS METALS CORPORATION FOR ITEM NO. 17 AND THE 14 OTHER BIDS RECEIVED FOR THE ITEM, WHICH RANGED FROM $0.08 TO $0.0389 EACH, WE MAY NOT ACCEPT SUCH A DIFFERENTIAL, WITHOUT MORE, AS ESTABLISHING NOTICE OF PROBABILITY OF ERROR IN THE HIGH BID. OUR OFFICE CONSISTENTLY HAS HELD THAT IN VIEW OF THE WIDE RANGE IN PRICES ORDINARILY RECEIVED ON SALES OF WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICE BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY FROM THE GOVERNMENT AS WOULD A LIKE DIFFERENCE IN THE PRICE QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. IN VIEW OF THE FOREGOING, AND SINCE NO INDICATION OF THE ERROR WAS OTHERWISE SHOWN ON THE FACE OF THE BID, IT MAY NOT BE CONCLUDED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABLE ERROR IN THE BID OF THE WESTERN NON-FERROUS METALS CORPORATION PRIOR TO AWARD.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR CANCELING ITEM NO. 17 FROM THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACT AND RECOMMENDATION, ARE RETURNED HEREWITH.