B-127234, MAR. 19, 1956

B-127234: Mar 19, 1956

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TO THE HONORABLE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED MARCH 6. WAS BASED. BIDS WERE REQUESTED ON 65 ITEMS OF GOVERNMENT-OWNED SURPLUS PROPERTY. " FOR WHICH HIS BID WAS $291. WAS THE ONLY ITEM AWARDED TO HIM. ALLEGED THAT HIS BID ON ITEM NO. 57 WAS A MISTAKE IN THAT IN THE INSPECTION OF THE PROPERTY HE HAD NOT INSPECTED A STEAM CLEANER AND THAT HE HAD NO INTENTION AT ANY TIME OF OFFERING TO PURCHASE A STEAM CLEANER. FOR WHICH ITEM HIS BID OF $291 WAS INTENDED. THAT NO BID WAS INTENDED FOR ITEM NO. 57. THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CONTRACTOR MADE AN ERROR ON ITEM NO. 57 OF ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF.

B-127234, MAR. 19, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MARCH 6, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL) RELATIVE TO AN ALLEGED ERROR ON ITEM NO. 57 OF AN UNDATED BID SUBMITTED BY ROY C. JONES ON WHICH CONTRACT NO. N200S-913 DATED JULY 15, 1955, WAS BASED. YOU REQUEST A DECISION AS TO WHETHER THE RELIEF REQUESTED BY THE CONTRACTOR MAY BE GRANTED.

BY INVITATION NO. B-1-56 ISSUED AT THE NAVAL STATION, KEY WEST, FLORIDA, BIDS WERE REQUESTED ON 65 ITEMS OF GOVERNMENT-OWNED SURPLUS PROPERTY. ALTHOUGH MR. JONES SUBMITTED A BID ON SEVERAL OF THE ITEMS, ITEM NO. 57, WHICH COVERED A "STEAM CLEANER * * * CONDITION: VERY POOR, MAJOR REP. REQ. ACQUISITION COST: $2800.00," FOR WHICH HIS BID WAS $291, WAS THE ONLY ITEM AWARDED TO HIM.

UPON RECEIPT OF NOTICE OF THE AWARD THE CONTRACTOR, BY LETTERS OF JULY 25 AND AUGUST 4, 1955, ALLEGED THAT HIS BID ON ITEM NO. 57 WAS A MISTAKE IN THAT IN THE INSPECTION OF THE PROPERTY HE HAD NOT INSPECTED A STEAM CLEANER AND THAT HE HAD NO INTENTION AT ANY TIME OF OFFERING TO PURCHASE A STEAM CLEANER. UPON BEING REQUESTED IN LETTER OF JANUARY 30, 1956, TO ADVISE, IN VIEW OF HIS ALLEGATION OF ERROR, FOR WHICH ITEM HIS BID OF $291 WAS INTENDED, IF NOT INTENDED FOR ITEM NO. 57, THE CONTRACTOR REPLIED BY LETTER OF FEBRUARY 3, 1956, THAT HE HAD INSPECTED AND INTENDED TO BID $291 ON ITEM NO. 56 WHICH COVERED A WAREHOUSE TRACTOR, AND THAT NO BID WAS INTENDED FOR ITEM NO. 57.

THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CONTRACTOR MADE AN ERROR ON ITEM NO. 57 OF ITS BID BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THERE WAS NOTHING APPEARING ON THE FACE OF THE BID TO INDICATE THAT IT WAS NOT INTENDED AS SUBMITTED. WHILE THE CONTRACTING OFFICER STATES THAT THREE BIDS WERE RECEIVED ON ITEM NO. 57, THE ABSTRACT OF BIDS, TO WHICH HE REFERS, SHOWS ONLY TWO BIDS THEREON, THE CONTRACTOR'S BID OF $291 AND ONE OTHER BID OF $10. WHILE THERE IS A WIDE VARIANCE BETWEEN THESE TWO BIDS IT APPEARS THAT THE CONTRACTING OFFICER WAS NOT PLACED ON NOTICE OF ANY ERROR IN THE HIGHER BID BY REASON OF SUCH VARIANCE. THIS IS UNDERSTANDABLE SINCE THE PUBLISHED ACQUISITION COST OF THE STEAM CLEANER WAS $2,800 AND $291 IS ONLY SLIGHTLY OVER 10 PERCENT WHEREAS, IN THE SAME BID, MR. JONES OFFERED $351.95 OR 17 1/2 PERCENT OF THE PUBLISHED ACQUISITION COST OF ITEM NO. 2, WHICH COVERED ONE ,TRUCK, WRECKER * * * CONDITION: POOR, MAJOR REPAIRS REQ. ACQUISITION COST: $2000.00.' MOREOVER, MERE DIFFERENCE IN THE PRICES BID IN A SALE OF GOVERNMENT-OWNED SURPLUS PROPERTY GENERALLY WOULD NOT PLACE A CONTRACTING OFFICER ON NOTICE OF ERROR AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED FOR NEW EQUIPMENT, OR SUPPLIES, TO BE FURNISHED TO THE GOVERNMENT. IT IS REASONABLE TO ASSUME THAT THERE WOULD BE A WIDE RANGE IN PRICES OFFERED IN SUCH A SALE, SINCE THEY WOULD BE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY WAS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE 16 COMP. GEN. 596; 17 ID. 601; ID. 976; AND 28 ID. 550. THUS, SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID ON ITEM NO. 57 WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, IN THE CIRCUMSTANCES, CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

FURTHERMORE, BOTH THE INVITATION FOR BIDS AND THE CONTRACTOR'S BID ON ITEM NO. 57 THEREOF WERE CLEAR AND UNAMBIGUOUS. THE RESPONSIBILITY FOR THE PREPARATION AND SUBMISSION OF THE BID WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF THE CONTRACTOR MADE A MISTAKE AS ALLEGED, THE MISTAKE WAS DUE SOLELY TO THE LACK OF PROPER CARE ON THE BIDDER'S PART AND WAS NOT INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT, NOR WAS THERE ANY REASON TO SUSPECT THAT THE BID WAS NOT MADE AS INTENDED. SEE GRYMES V. SANDERS, ET L., 93 U.S. 55, 61. SUCH ERROR AS WAS MADE WAS UNILATERAL, NOT MUTUAL, AND THEREFORE DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

ACCORDINGLY, I FIND NO LEGAL BASIS FOR RELEASING THE CONTRACTOR FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT. IF DELIVERY OF THE ITEM IS NOT ACCEPTED WITHIN A REASONABLE TIME, THE GOVERNMENT SHOULD EXERCISE ITS RIGHT TO RETAIN THE PROPERTY AND TO RETAIN FROM THE PURCHASE PRICE LIQUIDATED DAMAGES AS PROVIDED IN PARAGRAPH 18 OF THE GENERAL TERMS AND CONDITIONS OF THE SALE. THE BALANCE OF THE PURCHASE PRICE, IF ANY, SHOULD BE RETURNED TO THE CONTRACTOR.