B-144023, MAR. 6, 1961

B-144023, MAR. 6, 1961

TO AMERICAN CORD AND WEBBING CO., INC.:

REFERENCE IS MADE TO YOUR LETTER DATED FEBRUARY 6, 1961, REQUESTING RECONSIDERATION OF OUR DECISIONS DATED OCTOBER 12, 1960, AND JANUARY 25, 1961, DENYING RELIEF TO YOU UNDER DEPARTMENT OF THE NAVY SALE CONTRACT NO. N665A-49702.

IN OUR DECISION DATED JANUARY 25, 1961, TO YOU, THERE WAS SPECIFICALLY POINTED OUT THE FACT THAT GENERALLY THE SOLE ISSUE IN ERRONEOUS BID CASES INVOLVING GOVERNMENT SALES OF SURPLUS PROPERTY, SUCH AS THIS, IS WHETHER THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID AT THE TIME OF ITS ACCEPTANCE. WHILE YOUR LETTER OF FEBRUARY 6, 1961, APPEARS TO RECOGNIZE THAT A LEGAL DETERMINATION OF SUCH AN ISSUE IS CONTROLLING IN A SALE OF THIS KIND, IT ALSO APPEARS YOU TAKE THE POSITION PRIMARILY THAT HERE THE CONTRACTING OFFICER RECOGNIZED THE ERROR IMMEDIATELY AFTER THERE WAS CALLED TO HIS ATTENTION THE FACT THAT YOUR BID WAS MORE THAN DOUBLE THAT OF THE NEXT HIGH BID. HENCE, YOU STATE THAT BY REASON OF THIS PRICE COMPARISON THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABLE ERROR PRIOR TO MAKING THE AWARD. YOU ALSO REQUEST ADVICE AS TO WHETHER A CONTRACTING OFFICER IS CHARGED WITH THE DUTY OF NOTICING AN ERROR IN A BID PRIOR TO ITS BEING CALLED TO HIS ATTENTION.

A GOVERNMENT CONTRACTING OFFICER OWES THE DUTY TO THOROUGHLY EVALUATE ALL BIDS RECEIVED IN RESPONSE TO INVITATIONS BEFORE MAKING AN AWARD. IF AN ERROR IS APPARENT FROM THE FACTS AVAILABLE TO HIM HE IS REQUIRED TO VERIFY THE BID BEFORE MAKING AN AWARD OF A CONTRACT. IN THIS CASE THERE IS NOTHING IN THE RECORD BEFORE US TO INDICATE THAT THE CONTRACTING OFFICER WAS, OR SHOULD HAVE BEEN, ON NOTICE OF PROBABLE ERROR IN YOUR BID BEFORE HE MADE THE AWARD TO YOU. ALTHOUGH THE PRICE BID BY YOU WAS CONSIDERABLY HIGHER THAN THE NEXT HIGH BID, AS WAS PREVIOUSLY STATED IN OUR DECISION OF OCTOBER 12, 1960, TO THE SECRETARY OF THE NAVY, OUR OFFICE CONSISTENTLY HAS HELD THAT IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS 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 FROM THE GOVERNMENT AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. OUR DETERMINATION IN THIS REGARD IS BASED ON THE PREMISE THAT THE INTENDED USE OF THE MATERIAL FOR SALE BY THE BIDDER OR THE PROSPECTIVE RESALE THEREOF, MAY VERY DEFINITELY AFFECT THE AMOUNT OF THE BID AND THIS REASONING IS COMPLETELY SUPPORTED IN UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, HERETOFORE BROUGHT TO YOUR ATTENTION. THUS, SINCE THE TRANSACTION COVERED A SALE OF SURPLUS PROPERTY, THE FACT THAT YOUR BID MIGHT HAVE BEEN 109 PERCENT HIGHER THAN THE NEXT HIGHEST BID, OR MORE THAN DOUBLE, MAY NOT BE ACCEPTED AS THE BASIS FOR CHARGING THE CONTRACTING OFFICER WITH NOTICE OF PROBABLE ERROR IN YOUR BID.

IN VIEW OF THE FOREGOING, OUR PREVIOUS DECISION IN THE MATTER AGAIN MUST BE AFFIRMED.