B-121804, NOV 2, 1954

B-121804, NOV 2, 1954

PRECIS-UNAVAILABLE

SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER OF OCTOBER 15, 1954, WITH ENCLOSURES, FROM THE CONTRACTING OFFICER, SAN ANTONIO AIR MATERIEL AREA, KELLY AIR FORCE BASE, TEXAS, REQUESTING A DECISION RELATIVE TO AN ERROR ALLEGED BY MONTEREY IRON & METAL CO., TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO INVITATION NO. 41-608-S-55-9, DATED AUGUST 27, 1954.

SINCE AWARD HAS BEEN MADE, THE CONTRACTING OFFICER IS NOT ENTITLED TO A DECISION IN THE MATTER. SEE 26 COMP. GEN. 993, AND 28 ID. 401. HOWEVER, SINCE A DECISION APPEARS REQUIRED, THE DECISION IS BEING RENDERED TO YOU.

THE INVITATION REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS SALVAGE MATERIALS (SCRAP) DESCRIBED UNDER ITEMS 1 TO 60, INCLUSIVE. IN RESPONSE TO THE INVITATION, MONTEREY IRON & METAL CO. SUBMITTED A BID IN WHICH IT QUOTED A PRICE OF $0.077 PER POUND FOR ITEM 30, DESCRIBED AS 40,000 POUNDS OF "AIRCRAFT PARTS AND ACCESSORIES ***." THE COMPANY'S BID WAS ACCEPTED AS TO ITEM 30.

BY LETTER OF OCTOBER 13, 1954, AFTER RECEIPT OF NOTICE OF AWARD AND PAYMENT OF THE CONTRACT PRICE, MONTEREY IRON & METAL CO. ALLEGED ERROR IN ITS BID ON ITEM 30, IN THAT THE PRICE WAS ERRONEOUSLY ENTERED IN THE BID AS $0.077 PER POUND, WHEREAS IT INTENDED TO QUOTE A PRICE OF $0.0077 PER POUND. THE COMPANY FURNISHED ITS WORK COPY OF THE INVITATION, WHICH SHOWS THE PRICE OF ITEM 30 AS $0.0077 PER POUND, AND INVITED ATTENTION TO THE WIDE VARIANCE BETWEEN ITS BID PRICE AND THE FOUR OTHER BIDS ON THE ITEM WHICH RANGED FROM $0.0051 TO $0.014 PER POUND AS EVIDENCE IN SUPPORT OF THE ALLEGATION OF ERROR.

THE CONTRACTING OFFICER'S LETTER OF OCTOBER 15, 1954, INDICATES THAT HE DID NOT SUSPECT ERROR IN THE COMPANY'S BID PRIOR TO THE AWARD. FURTHERMORE, WHILE THE COMPANY'S BID ON ITEM 30 IS CONSIDERABLY HIGHER THAN THE OTHER BIDS THEREON, SUCH VARIATION WOULD NOT NECESSARILY PLACE THE CONTRACTING OFFICER ON NOTICE OF ERROR SINCE A WIDE RANGE IN THE PRICES QUOTED ON SALVAGE MATERIALS IS NOT UNUSUAL. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601, ID. 976; AND 28 ID. 550. ALTHOUGH, AFTER AWARD, THE COMPANY FURNISHED ITS WORK COPY OF THE INVITATION, WHICH SHOWS THE PRICE ENTERED OPPOSITE ITEM 30 AS $0.0077 PER POUND, IT DOES NOT APPEAR THAT, PRIOR TO THE AWARD, THE CONTRACTING OFFICER WAS AWARE OF THAT CIRCUMSTANCE. FURTHERMORE, SINCE THE COMPANY HAD IN EFFECT AN ANNUAL BID BOND, THERE WAS NO BASIS FOR DETECTING ERRORS IN THE COMPANY'S BID PRICES BY COMPARING THE TOTAL THEREOF WITH THE AMOUNT OF A BID DEPOSIT WHICH WAS REQUIRED TO BE 20 PERCENT OF THE TOTAL BID. THUS, THE PRESENT RECORD IS NOT SUCH AS TO REQUIRE THE CONCLUSION THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE ALLEGED ERROR IN THE BID OF MONTEREY IRON & METAL CO. UNDER SUCH CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE COMPANY'S BID ON ITEM 30 CONSUMMATED A VALID AND BINDING CONTRACT CONFERRING RIGHTS AND OBLIGATIONS UPON THE CONTRACTING PARTIES WHICH NEITHER THIS OFFICE NOR ANY OFFICER OF THE GOVERNMENT IS AUTHORIZED TO VARY TO THE DETRIMENT OF THE UNITED STATES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75; AND UNITED STATES V. AMERICAN SALES COMPANY, 27 F. 2D 389, AFFIRMED 32 F. 2D 141, AND CERTIORARI DENIED, 280 U.S. 574.

ACCORDINGLY, THE PRESENT RECORD AFFORDS NO LEGAL BASIS FOR CANCELLING THE AWARD OF ITEM 30 TO MONTEREY IRON & METAL CO. AT ITS BID PRICE OF $0.077 PER POUND.