B-217233, MAR. 14, 1956

B-217233, MAR. 14, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MARCH 1, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL), RELATIVE TO AN ALLEGED ERROR IN A BID DATED DECEMBER 8, 1955, SUBMITTED BY ASSOCIATED INDUSTRIES ON WHICH SALES CONTRACT NO. N138S-5928 WAS BASED. YOU REQUEST A DECISION AS TO WHETHER THE RELIEF REQUESTED BY THE CONTRACTOR MAY BE GRANTED.

BY INVITATION NO. B-46-56 DATED NOVEMBER 16, 1955, THE NAVAL SUPPLY DEPOT AT BAYONNE, NEW JERSEY, REQUESTED BIDS FOR 36 ITEMS OF GOVERNMENT-OWNED PROPERTY. IN ITS BID, THE ASSOCIATED INDUSTRIES OFFERED TO PURCHASE ONLY ITEM NO. 27, WHICH COVERED 80 CABLE ASSEMBLIES. ITS BID OF $26.80 EACH WAS PROMPTLY ACCEPTED. THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDS RECEIVED ON ITEM NO. 27 RANGED FROM $1.05 TO $0.037 EACH.

UPON RECEIPT OF THE NOTICE OF AWARD, THE CONTRACTOR IMMEDIATELY ADVISED THAT IT WAS AT FIRST CONFUSED, SINCE IT DID NOT RECALL SUBMITTING ANY BID ON 80 CABLE ASSEMBLIES, BUT THAT, AFTER CHECKING UP, IT DISCOVERED THAT AN ERROR HAD BEEN MADE IN THE BID, PARTLY ATTRIBUTABLE TO THE FACT THAT INVITATION NO. B-46-56 DATED NOVEMBER 16, 1955, HAD BEEN RECEIVED IN THE SAME ENVELOPE WITH INVITATION NO. B 46-56, DATED NOVEMBER 9, 1955. EXPLAINED THAT THE BID OF $26.80 EACH WAS INTENDED FOR ITEM NO. 27 OF INVITATION NO. B-27-56 WHICH COVERED 2 RADIO RECEIVERS; THAT THERE WAS NO INTENTION OF SUBMITTING ANY BID WHATSOEVER IN RESPONSE TO INVITATION NO. B -46-56; BUT THAT ITS BOOKKEEPER, WHO HAD BEEN GIVEN A MEMORANDUM TO BID $26.80 EACH ON ITEM NO. 27 OF INVITATION NO. B-47-56 AND WHO TYPED, SIGNED AND FILED THE BID, INADVERTENTLY INSERTED THE BID ON ITEM NO. 27 OF INVITATION AND BID FORM NO. B-46-56. THE BID WAS EXTENDED TO THE TOTAL PRICE BID COLUMN AS $2,144 ON THE BASIS OF THE 80 UNITS CALLED FOR UNDER THAT ITEM. HOWEVER, IT WAS ALLEGED FURTHER THAT THE RETAINED COPY OF THE BID WAS ENTERED ON ITEM NO. 27 OF INVITATION AND BID FORM NO. B-47-56 WHERE, OF COURSE, THE EXTENDED AMOUNT OF $2,144 WAS SUBSEQUENTLY FOUND TO BE IRRECONCILABLE WITH THE UNIT PRICE OF $26.80 SINCE THE QUANTITY THERE INVOLVED WAS ONLY TWO UNITS. A COPY OF THE RETAINED BID ON FORM NO. B-47- 56, THE REFERRED-TO INFORMAL MEMORANDUM, AND AN EXPLANATORY STATEMENT FROM THE BOOKKEEPER, WHO ALLEGEDLY MADE THE MISTAKE, WAS SUBMITTED IN SUBSTANTIATION OF THE ALLEGATION OF ERROR.

ON THE EVIDENCE OF RECORD IN THIS CASE THERE IS NO DOUBT THAT THE CONTRACTOR MADE A BONA FIDE ERROR IN ITS BID AS ALLEGED. GENERALLY A MERE DIFFERENCE IN PRICES QUOTED FOR GOVERNMENT-OWNED SURPLUS PROPERTY IS NOT REGARDED AS SUFFICIENT GROUND FOR THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD TAKE NOTICE OF THE PROBABILITY OF ERROR IN ANY BID. HOWEVER, IN VIEW OF THE CONSISTENTLY LOW GENERAL TREND OF THE FOUR OTHER BIDS ON ITEM NO. 27 OF INVITATION NO, B-46-56, AND SINCE THE BID OF ASSOCIATED INDUSTRIES WAS 25 TIMES GREATER THAN THE NEXT HIGHEST BID RECEIVED ON THE ITEM, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE PROBABILITY OF ERROR IN THE BID SUBMITTED BY THE CONTRACTOR AND THAT, THEREFORE, HE SHOULD HAVE REQUESTED A VERIFICATION OF ITS BID ON THE ITEM PRIOR TO THE AWARD. SINCE THIS WAS NOT DONE, THE AWARD OF ITEM NO. 27 MAY BE CANCELED AND THE AMOUNT OF $428.80, AND BALANCE OF THE CONTRACTOR'S BID DEPOSIT, WHICH, UNDER PARAGRAPH 18 OF THE TERMS AND CONDITIONS OF THE CONTRACT, WAS RETAINED AS ..END :