B-127112, MAR. 6, 1956

B-127112, MAR. 6, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 23, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY (MATERIAL), REQUESTING A DECISION AS TO THE PROPRIETY OF CANCELING A CONTRACT FOR THE SALE OF CERTAIN DENTAL OPERATING LAMPS TO THE JOHN MARCUS DENTAL SUPPLY COMPANY, MINNEAPOLIS, MINNESOTA.

BY INVITATION NO. B-78-56 DATED OCTOBER 10, 1955, THE UNITED STATES NAVAL SUPPLY DEPOT, SAN DIEGO, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF CERTAIN USABLE MISCELLANEOUS MATERIAL. THE INVITATION SPECIFIED THAT BIDS WOULD BE OPENED NOVEMBER 1, 1955, AND THAT EACH BID SHOULD BE ACCOMPANIED WITH A DEPOSIT OF 20 PERCENT OF THE TOTAL AMOUNT BID. THE RECORD DISCLOSES THAT OF THE VARIOUS ITEMS OF EQUIPMENT LISTED IN THE INVITATION, THE JOHN MARCUS DENTAL SUPPLY COMPANY OFFERED TO PURCHASE ITEM NO. 11 FOR $100 EACH, CONSISTING OF AND DESCRIBED AS THREE "LAMPS, DENTAL OPERATING, 110-120 VOLT, AC-DC MFGR. WILMOT CASTLE COMPANY, MODEL PAN-O-VISION NO. 4, TYPE REFLECTOR, MFGR. CATALOG NO. 5- 387-850. UNUSED, GOOD CONDITION.' NINETEEN OTHER BIDS WERE RECEIVED ON ITEM NO. 11 WHICH RANGED FROM $20.79 TO $0.60 EACH. THE HIGH BID OF THE JOHN MARCUS DENTAL SUPPLY COMPANY WAS ACCEPTED BY THE DISPOSAL OFFICER ON NOVEMBER 7, 1955, AND DESIGNATED CONTRACT N 2552-49574. THE BID FOR THE THREE LAMPS WAS ACCOMPANIED BY A DEPOSIT OF $60.

WHEN THE COMPANY RECEIVED THE SALES CONTRACT WITH A REQUEST FOR THE BALANCE OF THE PURCHASE PRICE IT REFUSED TO ACCEPT THE CONTRACT AND REQUESTED RETURN OF ITS DEPOSIT SINCE A LONG DISTANCE TELEPHONE CALL TO THE SUPERVISOR, DISPOSAL DIVISION, HAD ELICITED THE INFORMATION THAT THE LAMPS WERE NOT "MODEL PAN-O-VISION NO. 4" AS LISTED. THE DISPOSAL OFFICER REPORTS THAT THE LAMPS WERE INADVERTENTLY ERRONEOUSLY DESCRIBED AS THEY WERE OF THE "CASTLE TYPE," IN A USED, POOR CONDITION, AND REPAIRS AND PARTS WERE REQUIRED. IT IS FURTHER REPORTED THAT SIMILAR LAMPS HAVE BEEN SOLD FOR A PRICE OF $5.67 EACH, AND THAT, BASED ON THE BID PRICE, THE SALES PRICE OF SIMILAR ITEMS, AND THE FACT THAT THE PROPERTY WAS MISDESCRIBED AND THE CONTRACTOR PLACED HIS BID ON THE BASIS OF THE DESCRIPTION OFFERED, THE DISPOSAL OFFICER BELIEVES THAT THE CONTRACT SHOULD BE RESCINDED.

HAD THE BIDDER NOT RESCINDED THE CONTRACT BY ITS REFUSAL TO ACCEPT THE EQUIPMENT, BUT INSTEAD, TAKEN POSSESSION THEREOF WITHOUT PROTEST, THERE MIGHT BE SOME DOUBT AS TO ITS RIGHT TO THE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., INC. V. UNITED STATES, 52 F.2D 31. BUT WHERE, AS HERE, THE SALE HAS NOT BEEN CONSUMMATED BY DELIVERY OF THE PROPERTY, NOR PAYMENT MADE OF THE PURCHASE PRICE STIPULATED BECAUSE OF A GROSS MISREPRESENTATION 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.