A-82112, DECEMBER 17, 1936, 16 COMP. GEN. 596

A-82112: Dec 17, 1936

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CONTRACTS - MISTAKES IN BIDS - PURCHASES OF GOVERNMENT SALVAGE MATERIAL LIABILITY OF CONTRACTOR WHERE A BIDDER ALLEGES A MISTAKE IN BID ON GOVERNMENT SALVAGE PROPERTY SOLD "AS IS" AND "WHERE IS. WHERE THE BID WAS CLEAR AND UNAMBIGUOUS. THE MISTAKE WAS NOT ALLEGED UNTIL AFTER AWARD AND RECEIPT OF THE BILL BY THE CONTRACTOR. A FAILURE TO PAY FOR THE PROPERTY MAY NOT BE EXCUSED BUT IS FOR ADJUSTMENT AS TO DAMAGES IN ACCORDANCE WITH THE TERMS OF THE CONTRACT. ON WHICH BIDS WERE TO BE OPENED JUNE 29. THE OTHER BIDS WERE 50 AT .67 AND .62 FOR BALANCE. STATES THAT "I HAVE MADE A GROSS ERROR. I INTENDED TOO (SIC) BID ONLY 26 CENTS ON THE LOCKERS BUT THROUGH SOME ERROR NO DOUBT OF MINE I PLACED THE ONE THERE BEFORE THE 26 WHICH I ASSURE YOU WAS AN ERROR.'.

A-82112, DECEMBER 17, 1936, 16 COMP. GEN. 596

CONTRACTS - MISTAKES IN BIDS - PURCHASES OF GOVERNMENT SALVAGE MATERIAL LIABILITY OF CONTRACTOR WHERE A BIDDER ALLEGES A MISTAKE IN BID ON GOVERNMENT SALVAGE PROPERTY SOLD "AS IS" AND "WHERE IS," A DIFFERENCE IN BID PRICES IN ITSELF WOULD NOT NECESSARILY BE CONSTRUCTIVE NOTICE TO THE CONTRACTING OFFICER OF A MISTAKE AS WOULD A LIKE DIFFERENCE IN PRICES FOR PERFORMANCE OF WORK, OR THE PURCHASE OF NEW EQUIPMENT, SUPPLIES, ETC., AND WHERE THE BID WAS CLEAR AND UNAMBIGUOUS, THE PRICES QUOTED NOT SUCH AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF ERROR, AND THE MISTAKE WAS NOT ALLEGED UNTIL AFTER AWARD AND RECEIPT OF THE BILL BY THE CONTRACTOR, A FAILURE TO PAY FOR THE PROPERTY MAY NOT BE EXCUSED BUT IS FOR ADJUSTMENT AS TO DAMAGES IN ACCORDANCE WITH THE TERMS OF THE CONTRACT.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF WAR, DECEMBER 17, 1936:

THERE HAS BEEN RECEIVED YOUR LETTER OF DECEMBER 2, 1936, AS FOLLOWS:

THE ATTACHED FILE WHICH CONSISTS OF (16) SIXTEEN SHEETS WITH COPY OF BID AND CIRCULAR PROPOSAL PERTAINS TO MISTAKE IN BID OFFERED BY THE BERRYHILL FURNITURE COMPANY, EL PASO, TEXAS.

ON MAY 29, 1936, THE QUARTERMASTER, FORT BLISS, TEXAS, ISSUED CIRCULAR PROPOSAL NO. 151-36-7 SALVAGE, ON WHICH BIDS WERE TO BE OPENED JUNE 29, 1936. ITEM NO. 31 OF THIS CIRCULAR LISTED LOCKERS, TRUNK, 114 EACH. THE BERRYHILL FURNITURE COMPANY SUBMITTED AN OFFER OF $1.26 EACH. THE OTHER BIDS WERE 50 AT .67 AND .62 FOR BALANCE, .55 FOR LOT, 50 AT .56 AND BALANCE AT .33, RESPECTIVELY.

THE QUARTERMASTER, FORT BLISS, TEXAS, ADVISED THE BERRYHILL FURNITURE COMPANY THAT AWARD ON ITEM 31 HAD BEEN MADE TO THEM.

LETTER FROM THE BERRYHILL FURNITURE COMPANY DATED JULY 6, 1936, STATES THAT "I HAVE MADE A GROSS ERROR. I INTENDED TOO (SIC) BID ONLY 26 CENTS ON THE LOCKERS BUT THROUGH SOME ERROR NO DOUBT OF MINE I PLACED THE ONE THERE BEFORE THE 26 WHICH I ASSURE YOU WAS AN ERROR.'

THE FACT THAT THE PRICE INCLUDED IN BERRYHILL FURNITURE COMPANY'S PROPOSAL UNDER ITEM 31 WAS APPROXIMATELY DOUBLE THAT OF THE NEXT HIGHEST BID AND EXCEEDS BY EVEN A GREATER PERCENTAGE THE AVERAGE PRICE RECEIVED ON OTHER SALES OF SALVAGE LOCKERS, LENDS SUPPORT TO THE BIDDER'S CLAIM OF MISTAKE. THE DEPOSIT MADE BY THIS BIDDER WAS IN A ROUND SUM APPROXIMATING, BUT SLIGHTLY EXCEEDING, THE 20 PERCENT REQUIRED (ACTUAL DEPOSIT $30, DEPOSIT REQUIRED $28.78) FOR A BID INCLUDING THE PRICE OF $0.26 FOR TRUNK LOCKERS, BUT FELL FAR BELOW THE AMOUNT ($51.54) REQUIRED BY THE INVITATION ON THE TOTAL SUM OF THE BID PRICES AS ACTUALLY ENTERED BY THE BIDDER, INCLUDING TRUNK LOCKERS AT $1.26.

IT IS RECOMMENDED THAT THE QUARTERMASTER, FORT BLISS, BE AUTHORIZED TO REJECT THE BID OF THE BERRYHILL FURNITURE COMPANY, REFUND DEPOSIT TO BIDDER, AND MAKE AWARD TO THE NEXT HIGHEST BIDDER.

THE BIDS HERE IN QUESTION WERE ON WASTE MATERIAL AND SALVAGE PROPERTY SOLD "AS IS" AND "WHERE IS" AS DISTINGUISHED FROM BIDS FOR THE PERFORMANCE OF WORK OR THE FURNISHING OF SUPPLIES, EQUIPMENT, ETC. CONSEQUENTLY THERE MIGHT BE EXPECTED A WIDE RANGE IN THE BIDS WHICH WOULD BE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY WAS TO BE PUT BY THE PARTICULAR BIDDER OR THE CHANCE OF RESALE THEREOF. THE MERE DIFFERENCE IN THE PRICES BID FOR SUCH PROPERTY WOULD NOT NECESSARILY PUT THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED.

THE FACTS OF RECORD DISCLOSE THAT THE BID OF THE BERRYHILL FURNITURE CO. AS RECEIVED, CANVASSED, AND ABSTRACTED WAS CLEAR AND UNAMBIGUOUS; THE PRICE QUOTED ON ITEM 31, WHEN COMPARED WITH THE OTHER PRICES QUOTED ON SAID ITEM, WAS NOT SUCH AS TO PUT THE CONTRACTING OFFICER ON NOTICE OF ANY ERROR THEREIN; AND THAT ALTHOUGH THE BIDS WERE OPENED JUNE 29, 1936, NO MISTAKE WAS ALLEGED BY THE SAID BIDDER UNTIL JULY 6, AFTER AWARD OF THE CONTRACT AND RECEIPT OF THE BILL FOR THE LOCKER TRUNKS.

ACCORDINGLY, THE BID HAVING BEEN ACCEPTED IN GOOD FAITH WITHOUT NOTICE OF ANY MISTAKE THEREIN THE BIDDER MUST BEAR THE CONSEQUENCES OF ITS MISTAKE.

THE BID IN THIS INSTANCE WAS ACCOMPANIED BY A DEPOSIT OF $30. PARAGRAPH 7 OF THE TERMS AND CONDITIONS OF THE BID PROVIDES THAT IN CASE AN AWARD BE GIVEN THE AMOUNT SO DEPOSITED SHALL BE WITHHELD FOR APPLICATION AS A GUARANTEE PERFORMANCE, AND THAT IN THE EVENT OF FAILURE TO COMPLY WITH THE TERMS AND CONDITIONS OF THE PURCHASE "AN AMOUNT EQUAL TO 20 PERCENT OF THE PURCHASE PRICE OF EACH AND ALL ITEMS TO WHICH SUCH FAILURE APPLIES SHALL BE RETAINED AS LIQUIDATED DAMAGES, AND NOT AS A PENALTY.' ALSO, PARAGRAPH 8 OF SAID TERMS AND CONDITIONS PROVIDES:

PAYMENT IN FULL FOR ALL PROPERTY PURCHASED MUST BE MADE WITHIN TEN (10) DAYS AFTER THE DATE OF AWARD; AND IN THE EVENT THE PURCHASER FAILS TO PAY WITHIN SUCH PERIOD, THE UNITED STATES MAY RESCIND THE SALE AND APPLY THE AMOUNT INCLOSED WITH THE PROPOSAL AS LIQUIDATED DAMAGES, AS PROVIDED IN PARAGRAPH 7. * * *

UPON THE FACTS OF RECORD IT MUST BE HELD THAT THERE IS NO LEGAL BASIS TO RELIEVE THE BERRYHILL FURNITURE CO. FROM ITS ACCEPTED BID, AND IN EVENT OF FAILURE TO PAY FOR THE PROPERTY SO PURCHASED THE MATTER SHOULD BE ADJUSTED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPHS 7 AND 8 OF THE TERMS AND CONDITIONS, SET FORTH, SUPRA. ..END :