B-117254, MAR 2, 1954

B-117254, MAR 2, 1954

PRECIS-UNAVAILABLE

THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED JANUARY 27, 1954, WITH ENCLOSURES, FROM THE DEPUTY DIRECTOR OF FINANCE, FURNISHING THE REPORT REQUESTED IN OFFICE LETTER OF OCTOBER 7, 1953, RELATIVE TO AN ERROR ALLEGED BY HARMO TIRE AND RUBBER CORPORATION TO HAVE BEEN MADE ON ITEM NO. 24 OF ITS BID ON WHICH CONTRACT NO. (33-602S-54-3 DATED AUGUST 31, 1953, FOR THE SALE OF ITEMS NOS. 23 AND 24 OF SALVAGE PROPERTY, IS BASED.

THE RECORD SHOWS THAT FOR THE 4,752 INNER TUBES IN SALVAGE ITEM NO. 24 - EACH WEIGHING APPROXIMATELY ONE-HALF POUND - THE CORPORATION'S ACCEPTED BID OF $0.435 PER TUBE IS EQUIVALENT TO $0.866 PER POUND, WHEREAS ITS ACCEPTED BID OF ONLY $0.095 PER TUBE ($0.0034 PER POUND) WAS THE HIGHEST OF THE THREE BIDS RECEIVED ON ITEM NO. 23 FOR A LOT OF INNER TUBES WEIGHING 28 POUNDS EACH; AND FOR A LOT OF LIGHT WEIGHT INNER TUBES OF 1 1/2 POUNDS EACH UNDER ITEM NO. 25, THE CORPORATION QUOTED A PRICE OF ONLY $0.035 PER TUBE, OR $0.02 1/3 PER POUND.

ORDINARILY, A MERE DIFFERENCE IN THE PRICES QUOTED BY BIDDERS IN A SALE OF SURPLUS MATERIAL OR SALVAGE PROPERTY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. HOWEVER, IN THE PRESENT CASE, SINCE THE ABSTRACT OF BIDS DISCLOSES THAT THE CORPORATION'S BID ON ITEM NO. 24 IS OVER THIRTY TIMES HIGHER THAN ANY OF THE FIVE OTHER BIDS RANGING DOWNWARD FROM $0.0138 TO $0.005 PER TUBE RECEIVED THEREON AND SINCE, CONSIDERED ON THE PER POUND BASIS, IT IS ALSO OVER THIRTY TIMES HIGHER THAN THE PRICES QUOTED BY THE CORPORATION FOR ANY OF THE OTHER SEVEN INNER TUBE ITEMS IT BID UPON, IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE TAKEN NOTICE OF THE PROBABILITY OF ERROR IN THE BID AND THAT, THEREFORE, THE CORPORATION SHOULD HAVE BEEN OFFERED AN OPPORTUNITY TO VERIFY ITS BID ON ITEM NO. 24 BEFORE ACCEPTANCE.

ACCORDINGLY, SINCE THERE APPEARS NO DOUBT THAT A BONA FIDE ERROR WAS MADE ON ITEM NO. 24 AND SINCE THE ERROR WAS ALLEGED AND EXPLAINED BY THE CORPORATION UPON RECEIPT OF THE NOTICE OF AWARD, THE AWARD AS TO ITEM NO. 24 SHOULD BE CANCELLED AND THE BID DEPOSIT APPLICABLE TO THAT ITEM REFUNDED TO THE CORPORATION, UNLESS DELIVERY UNDER THE ITEM HAS BEEN EFFECTED IN WHICH EVENT THE CONTRACTOR'S BID PRICE SHOULD BE CORRECTED TO HIS INTENDED PRICE.

THE PAPERS SUBMITTED WITH THE LETTER OF JANUARY 27, 1954, EXCEPT THE COMPLETE SET OF PHOTOSTATS, ARE FORWARDED HEREWITH.