B-126308, DEC. 22, 1955

B-126308: Dec 22, 1955

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE HONORABLE SECRETARY OF THE NAVY: REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 7. WAS BASED. ADVISED THAT A CLERICAL ERROR HAD BEEN MADE ON ITEM NO. 111 IN THAT HIS INTENDED TOTAL BID PRICE OF $11.61 FOR THAT ITEM INADVERTENTLY WAS SHOWN AS THE UNIT PRICE AND EXTENDED ON THAT BASIS TO THE "TOTAL PRICE BID" COLUMN FOR THE ITEM. PURPORTEDLY WAS 42 TIMES HIGHER THAN INTENDED. ALTHOUGH 145 ITEMS WERE OFFERED FOR SALE. ALL OF WHICH WERE AWARDED TO HIM. THE RECORD DISCLOSES THAT INFORMATION AVAILABLE TO THE CONTRACTING OFFICER INDICATED THAT NO INSPECTION OF THE PROPERTY WAS MADE BY THE BIDDER. ALL THE OTHER BIDS WERE SUBSTANTIALLY LESS THAN THE GOVERNMENT'S ADVERTISED ACQUISITION COST OF $210.

B-126308, DEC. 22, 1955

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF DECEMBER 7, 1955, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ALLEGED ERROR ON ITEM NO. 111 OF A BID DATED OCTOBER 3, 1955, SUBMITTED BY J. H. FURROW IN RESPONSE TO INVITATION NO. B-12-56 ON WHICH CONTRACT NO. N -407S-1740 DATED OCTOBER 14, 1955, WAS BASED.

UPON RECEIPT OF NOTICE THAT EIGHT ITEMS, INCLUDING ITEM NO. 111 AT THE BID PRICE OF $487.62, HAD BEEN AWARDED TO HIM IN THE SALE OF SURPLUS PROPERTY LOCATED AT THE NAVAL SUPPLY DEPOT MECHANICSBURG, PENNSYLVANIA, THE CONTRACTOR BY LETTER OF OCTOBER 17, 1955, ADVISED THAT A CLERICAL ERROR HAD BEEN MADE ON ITEM NO. 111 IN THAT HIS INTENDED TOTAL BID PRICE OF $11.61 FOR THAT ITEM INADVERTENTLY WAS SHOWN AS THE UNIT PRICE AND EXTENDED ON THAT BASIS TO THE "TOTAL PRICE BID" COLUMN FOR THE ITEM, WHICH CONSISTED OF 42 C CLAMPS. SINCE AS A RESULT OF THE ALLEGED ERROR HIS BID, AS SUBMITTED, PURPORTEDLY WAS 42 TIMES HIGHER THAN INTENDED, HE REQUESTED THAT THE BID AS TO ITEM NO. 111 BE DISREGARDED.

ALTHOUGH 145 ITEMS WERE OFFERED FOR SALE, MR. FURROW SUBMITTED A BID ON ONLY EIGHT ITEMS, ALL OF WHICH WERE AWARDED TO HIM. THE RECORD DISCLOSES THAT INFORMATION AVAILABLE TO THE CONTRACTING OFFICER INDICATED THAT NO INSPECTION OF THE PROPERTY WAS MADE BY THE BIDDER. THE ABSTRACT OF BIDS SHOWS THAT THE 24 OTHER BIDS RECEIVED ON ITEM NO. 111 RANGED FROM $2.10 TO $168. THUS, ALL THE OTHER BIDS WERE SUBSTANTIALLY LESS THAN THE GOVERNMENT'S ADVERTISED ACQUISITION COST OF $210. ONLY SIX OF THEM EXCEEDED 50 PERCENT, WHEREAS NINE OF THEM WERE LESS THAN 5 PERCENT, OF THE PUBLISHED ACQUISITION COST. IT IS MOST UNUSUAL FOR A BIDDER, IN A SALE OF GOVERNMENT-OWNED, USED, SURPLUS PROPERTY, TO OFFER A PURCHASE PRICE IN EXCESS OF THE KNOWN ACQUISITION COST TO THE GOVERNMENT. IN HIS REPORT OF NOVEMBER 28, 1955, THE CONTRACTING OFFICER STATED THAT THE CONTRACTOR'S BID PRICES ON MOST OF THE EIGHT ITEMS AWARDED TO HIM WERE SUBSTANTIALLY HIGHER THAN THE OTHER BIDS RECEIVED THEREON AND YET THE CONTRACTOR'S PRICES ON SEVEN OF THE EIGHT ITEMS RANGED FROM A LOW OF ONLY 6 1/2 PERCENT TO A HIGH OF 11 1/2 PERCENT OF THE PUBLISHED ACQUISITION COST. IN VIEW THEREOF AND SINCE MR. FURROW'S "TOTAL PRICE BID" OF $487.60 ON ITEM NO. 111 WAS 232 PERCENT OF, OR 2 1/3 TIMES, THE PUBLISHED ACQUISITION COST, THE CONCLUSION IS WARRANTED THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THERE WAS AN ERROR IN THE BID AND THAT, THEREFORE, MR. FURROW SHOULD HAVE BEEN AFFORDED AN OPPORTUNITY TO VERIFY HIS BID PRICE ON THAT ITEM BEFORE IT WAS ACCEPTED.

ACCORDINGLY, THE AWARD AS TO ITEM NO. 111 SHOULD BE CANCELLED AND THE CONTRACT PRICE ADJUSTED SO AS TO BE COMMENSURATE WITH THE AWARD AS TO THE REMAINING SEVEN ITEMS.