B-125624, OCT. 10, 1955

B-125624, OCT. 10, 1955

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 27, 1955, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), RELATING TO AN ALLEGED MISTAKE IN BID, DISCOVERED AFTER AWARD, BY THE NEW ALBANY CITY SCHOOLS, NEW ALBANY, INDIANA, IN CONNECTION WITH INVITATION TO BID NO. 13-036-S-55- 90, ISSUED BY THE JEFFERSONVILLE QUARTERMASTER DEPOT, JEFFERSONVILLE, INDIANA, AND ACCEPTED AS TO ITEM NO. 19 ON JUNE 6, 1955. IN VIEW OF THE REQUEST OF THE CONTRACTOR FOR CANCELLATION OF THE AWARD, THE DEPUTY ASSISTANT SECRETARY REQUESTS OUR CONSIDERATION AND DECISION IN THE MATTER.

THE RECORD SHOWS THAT BY THE CITED INVITATION TO BID DATED MAY 3, 1955, THE PROPERTY DISPOSAL OFFICER AT THE JEFFERSONVILLE QUARTERMASTER DEPOT OFFERED FOR SALE VARIOUS ITEMS OF SURPLUS GOVERNMENT PROPERTY, THE BIDS TO BE OPENED ON MAY 19, 1955. IN RESPONSE THERETO, THE NEW ALBANY CITY SCHOOLS SUBMITTED A BID FOR SEVERAL OF THE ITEMS OF PROPERTY BEING OFFERED FOR SALE AND MORE PARTICULARLY, ITEM NO. 19, THE ITEM AS TO WHICH THE MISTAKE IN BID IS ALLEGED. THIS ITEM IS DESCRIBED IN THE INVITATION AS ROUND STEEL, ONE INCH, RANDOM LENGTHS, TOTAL PROCUREMENT COST $92.62 (UNUSED) (UNPACKED) - 1297 GR POUNDS, FOR WHICH THE SCHOOLS BID $0.072 PER POUND BUT INDICATED A TOTAL BID FOR THE ITEM OF $9.34, AN OBVIOUS ERROR.

THE PROPERTY DISPOSAL OFFICER REPORTS THAT AFTER OPENING THE BIDS THE ASSISTANT PROPERTY DISPOSAL OFFICER, NOTING THE DISCREPANCY BETWEEN THE UNIT PRICE AND THE TOTAL BID FOR ITEM NO. 19, SUSPECTED THAT A MISTAKE IN BID HAD BEEN MADE, AND REQUESTED THE SCHOOLS BY TELEPHONE TO VERIFY THE BID. IT APPEARS FROM THE RECORD THAT SOME UNIDENTIFIED PERSON DID CONFIRM THE UNIT PRICE BID OF $0.072 PER POUNDS, BUT THAT THE ASSISTANT PROPERTY OFFICER DID NOT MENTION THE DISCREPANCY BETWEEN THE UNIT PRICE BID AND THE TOTAL PRICE BID. ON JUNE 6, 1955, THE PROPERTY DISPOSAL OFFICER AWARDED ITEM NO. 19 ON THE BASIS OF $0.072 PER POUND OR A TOTAL PRICE OF $93.38, AND CHANGED THE EXTENDED AMOUNT OF THE INITIAL BID OF $9.34 ACCORDINGLY.

IN SUPPORT OF THE ALLEGED MISTAKE, THE VOCATIONAL DIRECTOR FOR CITY SCHOOLS, WHO SUBMITTED THE INITIAL BID, SUBMITTED HIS WORK COPY OF THE BID EVIDENCING AN INTENDED BID OF $0.0072 PER POUND FOR A TOTAL BID PRICE OF $9.34 FOR ITEM NO. 19. THE ABSTRACT OF BIDS SHOWS THAT TWO OTHER BIDS WERE RECEIVED FOR THIS ITEM IN THE AMOUNTS OF $0.013 AND $0.01125 PER POUND, EVIDENCING A WIDE DISPARITY IN THE BID PRICE OF THIS CONTRACTOR AND THE OTHER BIDDERS. ON THE BASIS OF THE FOREGOING FACTS, INCLUDING THE FACT THAT THE AWARD WAS IN EXCESS OF THE NEW COST OF THE PROPERTY AND OTHER EXTENUATING CIRCUMSTANCES, THE PROPERTY DISPOSAL OFFICER RECOMMENDED THAT HE BE GRANTED AUTHORITY TO CANCEL THE AWARD OF ITEM NO. 19 TO THE NEW ALBANY CITY SCHOOLS.

AS WAS POINTED OUT BY THE PROPERTY DISPOSAL OFFICER, IT IS THE GENERAL RULE THAT A BIDDER MAY NOT BE RELIEVED FROM THE CONSEQUENCES OF AN INCORRECT BID, ONCE HE HAS BEEN AFFORDED THE OPPORTUNITY OF CONFIRMING HIS ORIGINAL QUOTATION PRIOR TO AWARD. HOWEVER, THE FACTS IN THE INSTANT MATTER APPEAR TO MAKE THIS CASE AN EXCEPTION TO THE GENERAL RULE. IT IS NOTED THAT IN REQUESTING THE BIDDER TO VERIFY THE UNIT PRICE BID OF $0.072 PER POUND, THE ASSISTANT PROPERTY DISPOSAL OFFICER MADE NO MENTION OF THE DISCREPANCY BETWEEN THE UNIT PRICE BID AND THE TOTAL PRICE BID. IN OTHER WORDS, THE ENTIRE PICTURE WAS NOT BROUGHT TO THE BIDDER'S ATTENTION. SEEMS REASONABLE TO ASSUME THAT HAD THE ASSISTANT PROPERTY DISPOSAL OFFICER INVITED THE BIDDER'S ATTENTION TO THE DISCREPANCY BETWEEN THE UNIT PRICE BID AND THE TOTAL PRICE BID, THE BIDDER MIGHT HAVE ALLEGED THE ERROR PRIOR TO AWARD. ALSO, THE IDENTITY OF THE EMPLOYEE OF THE BIDDER WHO VERBALLY VERIFIED THE BID HAS NOT BEEN ESTABLISHED, NOR CAN IT BE SHOWN THAT SUCH EMPLOYEE HAD AUTHORITY TO MAKE SUCH VERIFICATION.

THE EVIDENCE PRESENTED APPEARS TO ESTABLISH THE EXISTENCE OF A MISTAKE IN BID. SINCE THE BIDDER APPEARS NOT TO HAVE BEEN GIVENAN OPPORTUNITY IN A "COMPLETE SENSE" TO VERIFY ITS BID, AND SUCH "VERIFICATION" AS WAS OBTAINED CANNOT LEGALLY BE RELIED ON, AND IN VIEW OF THE EXTENUATING CIRCUMSTANCES SET FORTH IN THE ADMINISTRATIVE REPORT AND RECOMMENDATION OF THE PROPERTY DISPOSAL OFFICER, THE BID AS TO ITEM NO. 19 SHOULD BE DISREGARDED AND THE CONTRACT CANCELLED.

THE PAPERS TRANSMITTED WITH THE LETTER OF SEPTEMBER 27, 1955, WITH THE EXCEPTION OF THE REPORT OF THE PROPERTY DISPOSAL OFFICER, ARE RETURNED HEREWITH.