B-124239, JUN. 23, 1955

B-124239: Jun 23, 1955

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TO THE HONORABLE SECRETARY OF THE NAVY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 6. WAS BASED. ITEM 58 WAS DESCRIBED AS: "PACKING. WAS MADE ON THE BID OF THE LEARNER COMPANY. ASSERTING THAT ITS BID PRICE WAS COMPUTED ON THE BASIS OF THE SALVAGE VALUE OF THE BRASS CONTAINED IN THE PACKING. THE COMPANY ALLEGED THAT ITS INTENDED BID PRICE WAS $0.02344 EACH. THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY THE LEARNER COMPANY TO INDICATE THAT IT WAS NOT AS INTENDED. ALTHOUGH THE PRICE QUOTED FOR ITEM 58 WAS CONSIDERABLY MORE THAN THE OTHER BIDS THEREON. SUCH DIFFERENCE IN PRICE WOULD NOT NECESSARILY INDICATE ERROR SINCE A WIDE RANGE IN THE PRICES QUOTED FOR SURPLUS MATERIALS AND EQUIPMENT IS NOT UNUSUAL.

B-124239, JUN. 23, 1955

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 6, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR WHICH THE LEARNER COMPANY ALLEGES IT MADE ON ITEM 58 OF ITS BID ON WHICH CONTRACT NO. N228S-9178, DATED APRIL 6, 1955, WAS BASED.

BY INVITATION NO. B-247-55, DATED MARCH 8, 1955, THE NAVAL SUPPLY CENTER, DISPOSAL DIVISION, OAKLAND, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS USABLE MATERIAL DESCRIBED UNDER THE NUMEROUS ITEMS THEREIN. ITEM 58 WAS DESCRIBED AS: "PACKING, WAC-66327/S/0 1148). ACQUISITION: $16,700.85. APPARENTLY UNUSED--- IN GOOD CONDITION.' IN RESPONSE TO THE INVITATION, THE LEARNER COMPANY SUBMITTED A BID IN WHICH IT QUOTED A UNIT PRICE OF $0.2344 EACH AND CORRECTLY EXTENDED THE TOTAL FOR THE 37,114 UNITS SPECIFIED AS $8,699.52. TABULATION OF BIDS ON ITEM 58 SHOWS THAT THE UNIT PRICES QUOTED BY THE SIX OTHER BIDDERS RANGED FROM $0.0421 TO $0.00125 EACH. AWARD OF ITEM 58, AMONG OTHERS, WAS MADE ON THE BID OF THE LEARNER COMPANY. UPON RECEIVING NOTICE OF AWARD, THE COMPANY MADE PAYMENT OF THE BALANCE OF THE CONTRACT PRICE IN EXCESS OF THE BID DEPOSIT AND REMOVED ALL MATERIALS AWARDED EXCEPT THAT COVERED BY ITEM 58.

BY LETTER OF APRIL 21, 1955, THE LEARNER COMPANY ALLEGED ERROR IN ITS BID ON ITEM 58. ASSERTING THAT ITS BID PRICE WAS COMPUTED ON THE BASIS OF THE SALVAGE VALUE OF THE BRASS CONTAINED IN THE PACKING, THE COMPANY ALLEGED THAT ITS INTENDED BID PRICE WAS $0.02344 EACH, RATHER THAN $0.2344 ACTUALLY QUOTED. REFERRING TO ITS RETAINED COPY OF THE INVITATION AS EVIDENCE IN SUPPORT OF THE ALLEGATION, THE COMPANY REQUESTED THAT THE AWARD OF ITEM 58 BE CANCELLED AND THE PRICE THEREOF RETURNED OR THAT THE CONTRACT BE AMENDED TO SHOW THE PRICE AS $0.0421 EACH, THE PRICE QUOTED BY THE NEXT HIGH BIDDER, AND THE EXCESS OF ITS PAYMENT REFUNDED.

THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY THE LEARNER COMPANY TO INDICATE THAT IT WAS NOT AS INTENDED. ALTHOUGH THE PRICE QUOTED FOR ITEM 58 WAS CONSIDERABLY MORE THAN THE OTHER BIDS THEREON, SUCH DIFFERENCE IN PRICE WOULD NOT NECESSARILY INDICATE ERROR SINCE A WIDE RANGE IN THE PRICES QUOTED FOR SURPLUS MATERIALS AND EQUIPMENT IS NOT UNUSUAL, THE PRICE QUOTED BEING DEPENDENT UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR THE BIDDER'S SPECULATION AS TO THE OPPORTUNITIES FOR RESALE. A MERE DIFFERENCE IN THE PRICES QUOTED WOULD NOT PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED FOR NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; AND 28 ID. 550. THUS, THE RECORD INDICATES THAT THE BID SUBMITTED BY THE LEARNER COMPANY WAS ACCEPTED IN GOOD FAITH, CONSUMMATING A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75. SUCH ACCEPTANCE VESTED IN THE GOVERNMENT THE RIGHT TO HAVE PERFORMANCE IN STRICT ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE ACCEPTED BID AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER ANY RIGHT VESTED IN THE GOVERNMENT OR ACQUIRED BY IT UNDER A CONTRACT. SEE UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED, 32 F.2D 141, AND CERTIORARI DENIED, 280 U.S. 574; BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 C.CLS. 584, CERTIORARI DENIED, 292 U.S. 645; AND PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C.CLS. 327, 335.

MOREOVER, THE INVITATION WAS CLEAR AND UNAMBIGUOUS AS TO THE PROPERTY OFFERED FOR SALE BY THE GOVERNMENT AND THE LEARNER COMPANY HAS ADMITTED THAT THE ALLEGED ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE. THUS, SUCH ERROR AS WAS MADE WAS UNILATERAL--- NOT MUTUAL -- AND DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259. FURTHERMORE, SINCE THE COMPANY'S BID PRICE IS APPROXIMATELY 50 PERCENT OF THE ACQUISITION COST AND SINCE THE MATERIAL IS DESCRIBED AS ,APPARENTLY UNUSED--- IN GOOD CONDITION," IT DOES NOT APPEAR THAT THE CONTRACT IS UNCONSCIONABLE.

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR RELEASING THE LEARNER COMPANY FROM THE TERMS OF CONTRACT NO. N228S-9178.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT AND RECOMMENDATION, ARE RETURNED HEREWITH.