B-126108, JAN. 17, 1956

B-126108: Jan 17, 1956

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TO THE HONORABLE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 14. WAS AWARDED. NO CATALOG OR LIST WAS PREPARED. THE PROPERTY WAS DISPLAYED FOR INSPECTION AT THE STOCKTON ANNEX. THE BIDS OF THE CONTRACTOR WERE DETERMINED TO BE THE HIGHEST RECEIVED ON ITEMS NOS. 3. AWARD WAS MADE OF THOSE ITEMS ON AUGUST 8. IN THAT ITS BID FOR THIS ITEM SHOULD HAVE BEEN PLACED ON ITEM 6. A REFUND OF $505.05 REPRESENTING THE AMOUNT PAID FOR ITEM 3 WAS REQUESTED. HAS BEEN RECEIVED FROM THE CONTRACTOR WHICH STATES THAT THEY MADE AN OBVIOUS MISTAKE IN BIDDING $505.05 ON ITEM 3 SINCE IT WAS A SITE SALE AND THERE WAS NO CATALOG ON THESE ITEMS. THAT SINCE ITEM 3 AND ITEM 6 WERE OPPOSITE EACH OTHER THEY CONFUSED THE TWO ITEMS AND PLACED THEIR BID ON ITEM 3 INSTEAD OF ITEM 6.

B-126108, JAN. 17, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 14, 1955, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY (MATERIAL), REQUESTING A DECISION RELATIVE TO AN ERROR THE HILLCO INDUSTRIAL SUPPLY, OAKLAND, CALIFORNIA, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT N-228S-11416 DATED AUGUST 11, 1955, WAS AWARDED.

BY SITE SALES LETTER SSL-8-56 DATED JULY 4, 1955, THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF SURPLUS GOVERNMENT PROPERTY. NO CATALOG OR LIST WAS PREPARED, BUT THE PROPERTY WAS DISPLAYED FOR INSPECTION AT THE STOCKTON ANNEX, GROUPED IN 38 LOTS. THE HILLCO INDUSTRIAL SUPPLY SUBMITTED A BID DATED AUGUST 4, 1955, OFFERING TO PURCHASE, AMONG OTHERS, ITEM NO. 3 AT A PRICE OF $505.05. THE BIDS OF THE CONTRACTOR WERE DETERMINED TO BE THE HIGHEST RECEIVED ON ITEMS NOS. 3, 17, AND 35, AND AWARD WAS MADE OF THOSE ITEMS ON AUGUST 8, 1955.

BY LETTER OF AUGUST 24, 1955, CONFIRMING TELEPHONE CONVERSATION OF THE SAME DATE, THE CONTRACTOR CLAIMED AN ERROR IN BIDDING ON ITEM 3, IN THAT ITS BID FOR THIS ITEM SHOULD HAVE BEEN PLACED ON ITEM 6, AND A REFUND OF $505.05 REPRESENTING THE AMOUNT PAID FOR ITEM 3 WAS REQUESTED. IN THIS CONNECTION, A LETTER DATED DECEMBER 27, 1955, HAS BEEN RECEIVED FROM THE CONTRACTOR WHICH STATES THAT THEY MADE AN OBVIOUS MISTAKE IN BIDDING $505.05 ON ITEM 3 SINCE IT WAS A SITE SALE AND THERE WAS NO CATALOG ON THESE ITEMS, AND THAT SINCE ITEM 3 AND ITEM 6 WERE OPPOSITE EACH OTHER THEY CONFUSED THE TWO ITEMS AND PLACED THEIR BID ON ITEM 3 INSTEAD OF ITEM 6.

ELEVEN OTHER BIDS WERE RECEIVED FOR ITEM 3, RANGING FROM $51 TO $2; THE AVERAGE OF THE FIVE HIGHEST BEING APPROXIMATELY $37. HENCE, NOTWITHSTANDING THAT A WIDE RANGE OF BIDS GENERALLY MAY BE EXPECTED IN THE SALE OF GOVERNMENT SURPLUS PROPERTY, IN THIS INSTANCE THE BID OF HILLCO INDUSTRIAL SUPPLY OF $505.05 FOR ITEM 3, BEING ALMOST TEN TIMES THE AMOUNT OF THE NEXT HIGHEST BID, APPEARS TO BE EXCESSIVELY DISPROPORTIONATE. MOREOVER, THE COMPANY'S BID IS MUCH MORE NEARLY IN LINE WITH THE BIDS RECEIVED FOR ITEM 6, ON WHICH SIXTEEN BIDS WERE RECEIVED, SIX OF WHICH WERE IN EXCESS OF $200, THE HIGHEST BEING $403. IN VIEW OF THIS, THERE CAN BE LITTLE, IF ANY, DOUBT THAT AN ERROR WAS MADE AS ALLEGED IN THE CONTRACTOR'S BID ON ITEM 3, AND IT IS BELIEVED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF AN ERROR AND SHOULD HAVE AFFORDED THE HILLCO INDUSTRIAL SUPPLY AN OPPORTUNITY TO VERIFY ITS BID ON THIS ITEM PRIOR TO MAKING THE AWARD.

ACCORDINGLY, THIS OFFICE WILL NOT OBJECT TO A CANCELLATION OF ITEM 3 FROM CONTRACT N-288S-11416 WITH A CORRESPONDING ADJUSTMENT IN THE TOTAL CONTRACT PRICE.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT OR VOUCHERS COVERING PAYMENT.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF OCTOBER 11, 1955, AND CONTRACTOR'S LETTERS OF AUGUST 24, AND DECEMBER 27, 1955, ARE RETURNED.