A-92305, FEBRUARY 17, 1938, 17 COMP. GEN. 662

A-92305: Feb 17, 1938

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WAS ACCEPTED BEFORE ALLEGATION OF MISTAKE. THERE IS NO LEGAL BASIS ON WHICH WITHDRAWAL OF THE BID MAY BE PERMITTED. NOTWITHSTANDING ONLY A PART OF THE PROPERTY WAS LISTED AS "JUNK" AND THE BIDDER'S ALLEGATION THAT "MOST OF IT IS WORSE THAN JUNK. " THERE HAVING BEEN NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY OTHER THAN THAT A PART WAS "JUNK. THERE BEING NOTHING IN THE BID TO PUT THE CONTRACTING OFFICER ON NOTICE THAT IT WAS NOT AS INTENDED. ACCEPTANCE WAS MADE ON ITEM 70 OF MR. WHICH IS A LUMP SUM QUOTATION OF $165.00 FOR THE ENTIRE LOT. "I DID NOT HAVE AN OPPORTUNITY TO INSPECT THIS EQUIPMENT BEFORE I PLACED BID. HAVING IN MIND THAT THIS EQUIPMENT BEING SOLD BY THE GOVERNMENT WAS RELIABLE IN SO FAR AS THE DESCRIPTION WAS CONCERNED.

A-92305, FEBRUARY 17, 1938, 17 COMP. GEN. 662

SALES - MISTAKES - BIDS - BIDDER'S FAILURE OF INSPECTION WHERE BIDDER FOR SURPLUS GOVERNMENT PROPERTY FAILED TO AVAIL HIMSELF OF THE OPPORTUNITY OFFERED FOR INSPECTION, AND HIS BID, ALTHOUGH CONSIDERABLY HIGHER THAN THAT OF ANY OTHER BIDDER, WAS ACCEPTED BEFORE ALLEGATION OF MISTAKE, THERE IS NO LEGAL BASIS ON WHICH WITHDRAWAL OF THE BID MAY BE PERMITTED, NOTWITHSTANDING ONLY A PART OF THE PROPERTY WAS LISTED AS "JUNK" AND THE BIDDER'S ALLEGATION THAT "MOST OF IT IS WORSE THAN JUNK," THERE HAVING BEEN NO REPRESENTATION AS TO THE CONDITION OF THE PROPERTY OTHER THAN THAT A PART WAS "JUNK; " THE PROPERTY BEING OF A CHARACTER SUSCEPTIBLE TO WIDE VARIATION IN PRICE DEPENDING ON THE INTENDED USE; AND THERE BEING NOTHING IN THE BID TO PUT THE CONTRACTING OFFICER ON NOTICE THAT IT WAS NOT AS INTENDED.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, FEBRUARY 17, 1938:

THERE HAS BEEN RECEIVED YOUR LETTER OF JANUARY 31, 1938, AS FOLLOWS:

ON NOVEMBER 8, 1937, THE REGIONAL OFFICE OF THE SOIL CONSERVATION SERVICE AT SALINA, KANSAS, ENTERED INTO A CONTRACT WITH H. J. ROBERTS, 950 SOUTH 11TH STREET, SALINA, KANSAS, IN ACCEPTANCE OF HIS BID SUBMITTED IN RESPONSE TO INVITATION TO BID NUMBERED SCS-7-1292, UNDER WHICH BIDS OPENED AT SALINA, KANSAS, ON NOVEMBER 8, 1937.

THE INVITATION TO BID OFFERED FOR SALE SIXTY-NINE ITEMS OF USED EQUIPMENT AND JUNK, LOCATED AT CCC CAMP SCS-16, SENECA, KANSAS. ACCEPTANCE WAS MADE ON ITEM 70 OF MR. ROBERTS' BID, WHICH IS A LUMP SUM QUOTATION OF $165.00 FOR THE ENTIRE LOT. UPON NOTIFICATION OF THE AWARD, MR. ROBERTS THEN INSPECTED THE MATERIALS AND ON NOVEMBER 18, 1937, ADDRESSED THE FOLLOWING LETTER TO THE REGIONAL PROCUREMENT OFFICER AT SALINA, KANSAS:

"AM WRITING IN REGARD TO THE INVITATION BID OF GOVERNMENT SUPPLIES CONSISTING OF TIRES, TUBES, AND MISCELLANEOUS EQUIPMENT LOCATED AT CCC CAMP SCS-16 AT SENECA, KANSAS.

"I DID NOT HAVE AN OPPORTUNITY TO INSPECT THIS EQUIPMENT BEFORE I PLACED BID, HAVING IN MIND THAT THIS EQUIPMENT BEING SOLD BY THE GOVERNMENT WAS RELIABLE IN SO FAR AS THE DESCRIPTION WAS CONCERNED,AND ASSUMED THAT ARTICLES LISTED, EXCEPT THAT LISTED UNDER CAPTION "JUNK," WHICH IT WAS EXPECTED WOULD BE WORN AND OBSOLETE, WERE REPAIRABLE AND USABLE EQUIPMENT, PARTICULARLY IN VIEW OF THE FACT THAT PART OF THE ITEMS WERE LISTED AS JUNK AND THE REST LISTED AS REGULAR ITEMS.

"HOWEVER, SINCE PLACING THE BID I HAVE INSPECTED THIS EQUIPMENT AND FIND THAT MOST OF IT IS WORSE THAN JUNK; IN FACT, ITEMS LISTED AS SAWS WERE NOTHING MORE THAN HANDLES; PART OF THE SHOVELS LISTED AS SHOVELS WERE NOTHING MORE THAN PART OF A BLADE OF WHAT HAD BEEN A SHOVEL. THE ITEM LISTED AS CENTRIFUGAL PUMP WITH MOTOR WAS ONLY PART OF THE GEARS AND FRAMEWORK OF WHAT HAD BEEN A PUMP AND MOTOR. THE ITEMS LISTED AS LEVELS WERE ONLY A PART OF THE WOOD FRAME PORTION OF THE LEVEL AND THE LEVEL ITSELF WAS ENTIRELY GONE. MANY OTHER ITEMS OF LIKE NATURE WERE ABSOLUTELY BEYOND REPAIR AND IT WOULD SEEM ABSURD TO LIST SUCH ITEMS AS AN OBJECT UNDER ITS ORIGINAL NAME AS ADVERTISED, WHICH IS CERTAINLY MISLEADING.

"IN VIEW OF THE ABOVE, I DESIRE TO WITHDRAW MY BID. THANKING YOU FOR YOUR CONSIDERATION, I AM"

QUOTATIONS WERE RECEIVED FROM THREE OTHER CONCERNS, AND ALL THREE OF THESE BIDDERS INSPECTED THE EQUIPMENT AND MATERIALS OFFERED FOR SALE PRIOR TO SUBMITTING THEIR BIDS. IT WILL BE NOTED THAT PACKS REBUILT TIRE COMPANY, KANSAS CITY, KANSAS, OFFERED $43.80 FOR ITEMS 1 THROUGH 11 AND ITEM 43; GEORGE H. GILLASPIE, SENECA, KANSAS, OFFERED $28.46 FOR THE LOT; AND FRED WAGOR, NORWAY, KANSAS, OFFERED $27.50 FOR THE LOT.

WHILE THE OFFER OF $165.00 MADE BY H. J. ROBERTS IS EXCEPTIONALLY HIGH, THE PROCUREMENT OFFICER, IN MAKING AN AWARD TO HIM, ASSUMED THAT THE MATERIALS AND EQUIPMENT HAD BEEN INSPECTED PRIOR TO THE SUBMISSION OF HIS BID, AND THAT THE OFFER REPRESENTED THE FAIR VALUE TO HIM. THE BIDDERS' INTENDED USE OF THE USED EQUIPMENT AND MATERIALS IS OBVIOUSLY REFLECTED IN THE PRICES QUOTED, AS FOR EXAMPLE, ONE BIDDER MAY PROPOSE TO JUNK THE EQUIPMENT, ANOTHER MAY LOOK FOR SPARE PARTS AND JUNK, WHILE ANOTHER MAY INTEND TO REPAIR OR CONTINUE THE USE OF THE EQUIPMENT. ILLUSTRATIVE OF THIS POINT IS THE FACT THAT ON ITEMS 1 THROUGH 11, COVERING 94 USED TIRES AND TUBES, ONE BIDDER OFFERED $1.19, WHILE ANOTHER, APPARENTLY DESIRING THE TIRES FOR RETREADING PURPOSES, OFFERED $41.80. ON ITEM 43, COVERING AUTO JACKS, ONE BIDDER OFFERED $2.00, WHILE ANOTHER OFFERED ?06. INASMUCH AS THE INTENDED USE IS SO REFLECTED IN THE PRICES QUOTED, THE DIFFICULTY IN DETECTING AN ERRONEOUS QUOTATION BECOMES APPARENT.

THE STATEMENT IS MADE IN MR. ROBERTS' LETTER DATED NOVEMBER 18, 1937, THAT MANY OF THE ITEMS ARE JUNK OR ONLY PARTS OF A COMPLETE UNIT. AFTER RECEIPT OF MR. ROBERTS' LETTER, THE REGIONAL PROCUREMENT OFFICER MADE FURTHER INVESTIGATION AS TO THE CONDITION OF THE EQUIPMENT AND MATERIALS, AND IT DEVELOPS THAT THERE ARE A NUMBER OF ITEMS WHICH SHOULD PROPERLY BE CLASSIFIED AS JUNK OR AT LEAST AS USED PARTS. IN ADDITION, THIS PARTICULAR ADVERTISEMENT DOES NOT CONTAIN THE CLAUSE, GENERALLY EMPLOYED BY THE SOIL CONSERVATION SERVICE, CAUTIONING BIDDERS TO INSPECT ALL EQUIPMENT BEFORE THE SUBMISSION OF BIDS.

THE OFFER OF $165.00 MADE BY H. J. ROBERTS GREATLY EXCEEDS THE FAIR MARKET VALUES OF THE ITEMS LISTED, AND IT WOULD SEEM THAT THE CONTRACTOR SHOULD BE RELIEVED OF HIS OBLIGATION UNDER THIS CONTRACT AND THAT A READVERTISEMENT BE MADE RECLASSIFYING THE VARIOUS ITEMS AS USED EQUIPMENT, PARTS, AND JUNK.

ENCLOSED ARE THE CONTRACT ENTERED INTO WITH H. J. ROBERTS, ALL REJECTED BIDS, AN ABSTRACT THEREOF, AND MR. ROBERTS' LETTER DATED NOVEMBER 18, 1937.

IT IS REQUESTED THAT THE FACTS PRESENTED, HEREIN, BE CONSIDERED AND, WITH THE RETURN OF ALL PAPERS, THE DEPARTMENT BE ADVISED AS TO THE PROPER ACTION TO FOLLOW.

THE INVITATION IN THIS CASE MERELY LISTED VARIOUS ARTICLES OF SURPLUS GOVERNMENT PROPERTY AND NO REPRESENTATIONS WHATEVER WERE MADE THEREIN AS TO THE CONDITION OF SAID PROPERTY OTHER THAN TO LIST PART OF SAME AS "JUNK.' WHILE, AS YOU STATE, THE ADVERTISEMENT DID NOT CONTAIN THE USUAL CLAUSE CAUTIONING BIDDERS TO INSPECT THE MATERIAL BEFORE SUBMISSION OF BIDS, THE INVITATION DID ADVISE BIDDERS AS FOLLOWS:

AWARD WILL BE MADE TO HIGHEST BIDDER AND THE ITEMS AS LISTED MAY BE INSPECTED AT THE POINTS SPECIFIED HEREIN.

THUS THE MATERIAL WAS AVAILABLE FOR INSPECTION BY PROSPECTIVE BIDDERS AND THE FAILURE OF THE BIDDER IN THIS CASE TO EXAMINE SAME BEFORE SUBMITTING HIS BID WAS HIS OWN RESPONSIBILITY.

THE MERE FACT THAT THE BID OF H. J. ROBERTS IS CONSIDERABLY HIGHER THAN THE OTHER BIDS RECEIVED, OR THAT HIS BID MAY BE IN EXCESS OF THE FAIR MARKET VALUE OF THE PROPERTY, HAS NO BEARING ON THE MATTER. MATERIAL OF THE CHARACTER HERE INVOLVED IS SUSCEPTIBLE OF A WIDE VARIATION IN PRICE, DEPENDENT MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER. THE USE TO BE MADE OF THE PROPERTY AFTER PURCHASE WAS, OF COURSE, NOT WITHIN THE KNOWLEDGE OF THE CONTRACTING OFFICER. HOWEVER THAT MAY BE, THE BID OF ROBERTS WAS CLEAR AND SPECIFIC, THERE BEING NOTHING THEREIN TO PUT THE CONTRACTING OFFICER ON NOTICE THAT THE BID WAS NOT AS INTENDED AT THE TIME IT WAS ACCEPTED ON NOVEMBER 8, 1937, AND THE REQUEST FOR WITHDRAWAL OF THE BID WAS NOT MADE UNTIL NOVEMBER 18, 1937.

ACCORDINGLY, YOU ARE ADVISED THAT UPON THE FACTS OF RECORD IT MUST BE HELD THAT THERE IS NO LEGAL BASIS TO RELIEVE H. J. ROBERTS FROM HIS ACCEPTED BID. SEE UNITED STATES V. NEW YORK AND PORTO RICO STEAMSHIP COMPANY, 239 U.S. 88; LIPSHITZ AND COHEN V. UNITED STATES, 269 U.S. 90; AND SCOTT V. UNITED STATES, 44 CT.CLS. 524. SEE ALSO, 16 COMP. GEN. 596.