B-126159, DEC. 15, 1955

B-126159: Dec 15, 1955

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TO THE HONORABLE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 21. BIDS WERE TO BE OPENED ON OCTOBER 26. AMENDMENT NO. 1 TO THE INVITATION FOR BIDS WAS ISSUED. SINCE IT WAS NOT ON THE BIDDER'S LIST AMENDMENT NO. 1 WAS NOT MAILED TO IT AND THEREFORE NO REFERENCE TO THE AMENDMENT WAS MADE IN THE COMPANY'S BID. THE COMPANY WAS NOTIFIED BY STATEMENT AND CERTIFICATE OF AWARD. WHERE THE SUBJECT BAGS WERE LOCATED. INFORMED THE COMPANY THAT IT WAS BOUND BY THE CONTRACT AND DEMANDED PAYMENT OF THE REMAINING $479.10 (TOTAL CONTRACT PRICE LESS DEPOSIT).

B-126159, DEC. 15, 1955

TO THE HONORABLE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 21, 1955, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE PROPRIETY OF RESCINDING A CONTRACT FOR THE SALE OF CERTAIN SURPLUS GOVERNMENT PROPERTY TO THE CALIFORNIA BAG COMPANY, 503 WEST SPOKANE STREET, SEATTLE 4, WASHINGTON.

BY INVITATION NO. AVI-45-171-S-55-3 DATED OCTOBER 11, 1954, THE PROPERTY DISPOSAL OFFICE, CAMP HANFORD, WASHINGTON, SENT INVITATIONS FOR BIDS ON THE PURCHASE AND REMOVAL OF 34 ITEMS OF GOVERNMENT-OWNED SURPLUS "SCRAP MATERIAL" TO 387 PROSPECTIVE BIDDERS. IN RESPONSE TO THE INVITATION THE CALIFORNIA BAG COMPANY SUBMITTED A BID WITH A DEPOSIT OF $350, OFFERING TO PURCHASE, AMONG OTHERS, LOT 34 COVERING APPROXIMATELY 173,452 POUNDS OF "BAGS, BURLAP, FIRE DAMAGED, PACKED IN BUNDLES (500 TO BNDL.)" AT A PRICE OF ?00478 PER POUND OR A TOTAL PRICE OF $829.10. BIDS WERE TO BE OPENED ON OCTOBER 26, 1954. ON OCTOBER 11, 1954, AMENDMENT NO. 1 TO THE INVITATION FOR BIDS WAS ISSUED, WHICH MODIFIED THE DESCRIPTION OF LOT 34 TO READ "* * * BAGS, BURLAP, FIRE DAMAGED. LOOSE (SCL NO. 121)," AND REQUIRED THAT THE AMENDMENT BE SIGNED AND SUBMITTED WITH THE BID OR IMMEDIATELY RETURNED IN EVENT THE BID HAD ALREADY BEEN FORWARDED. THE RECORD DISCLOSES THAT THE COMPANY RECEIVED THE INVITATION THROUGH A DISINTERESTED PARTY, AND SINCE IT WAS NOT ON THE BIDDER'S LIST AMENDMENT NO. 1 WAS NOT MAILED TO IT AND THEREFORE NO REFERENCE TO THE AMENDMENT WAS MADE IN THE COMPANY'S BID. NEVERTHELESS, THE COMPANY WAS NOTIFIED BY STATEMENT AND CERTIFICATE OF AWARD, DATED NOVEMBER 1, 1954, THAT ITS BID ON LOT NO. 34 AT .00478 PER POUND HAD BEEN ACCEPTED BY THE GOVERNMENT, AND A COPY OF AMENDMENT NO. 1, WITH ITS INSTRUCTIONS FOR SIGNATURE AND RETURN, ACCOMPANIED THIS NOTICE. ON NOVEMBER 8, 1954, THE COMPANY'S REPRESENTATIVE WENT TO THE ENGINEER DEPOT AT PASCO, WASHINGTON, WHERE THE SUBJECT BAGS WERE LOCATED, AND UPON REALIZING THE IMPOSSIBILITY OF DISPOSING OF THE MATERIAL UNDER THE REVISED DESCRIPTION--- I.E. BEING LOOSE, INSTEAD OF BALED 500 PER BALE--- REFUSED TO SIGN THE AMENDMENT AND ADVISED THE GOVERNMENT BY LETTER OF SAME DATE THAT THE COMPANY DID NOT CONSIDER ITSELF BOUND BY THE CONTRACT AND REQUESTED RETURN OF ITS DEPOSIT.

THE PROPERTY DISPOSAL OFFICER BY LETTER OF DECEMBER 22, 1954, INFORMED THE COMPANY THAT IT WAS BOUND BY THE CONTRACT AND DEMANDED PAYMENT OF THE REMAINING $479.10 (TOTAL CONTRACT PRICE LESS DEPOSIT). ON JANUARY 17, 1955, THE COMPANY FILED AN APPEAL FROM THIS ACTION WITH THE ARMED SERVICES BOARD OF CONTRACT APPEALS AND BY DECISION ASBCA NO. 2679, THE BOARD FOUND THAT A BINDING CONTRACT NEVER CAME INTO BEING AND DISMISSED THE APPEAL FOR LACK OF JURISDICTION.

UPON REVIEW OF THE RECORD, WE AGREE WITH THE BOARD'S CONCLUSION. HAD THE BIDDER NOT RESCINDED THE CONTRACT BY ITS REFUSAL TO ACCEPT THE BAGS, BUT TAKEN POSSESSION THEREOF WITHOUT PROTEST, THERE MIGHT BE SOME DOUBT AS TO ITS RIGHT TO THE RELIEF SOUGHT. BOARD OF TRUSTEES, ETC. V. O. D. WILSON CO., 133 F.2D 399; W. E. HEDGER CO. V. UNITED STATES, 52 F.2D 31. BUT WHERE, AS HERE, THE SALE HAS NOT BEEN CONSUMMATED BY DELIVERY OF THE PROPERTY, AND PAYMENT OF THE PURCHASE PRICE HAS BEEN REFUSED BECAUSE OF MISDESCRIPTION OF THE ARTICLE, WE FIND NO BASIS FOR HOLDING THE BIDDER TO BE BOUND BY AN ACCEPTANCE ON TERMS DIFFERENT FROM THOSE STATED IN THE BID, NOTWITHSTANDING THE DISCLAIMER OF WARRANTIES PROVISION. CF. AMERICAN ELASTICS V. UNITED STATES, 84 F.SUPP. 194, AFFIRMED 187 F.2D 109.

ACCORDINGLY, THE CONTRACT SHOULD BE CANCELED AND THE BID DEPOSIT REFUNDED.