B-127540, APR. 23, 1956

B-127540: Apr 23, 1956

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SECRETARY OF THE NAVY: REFERENCE IS MADE TO YOUR LETTER OF APRIL 9. SMITH TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. WAS BASED. ITS PUBLISHED ACQUISITION COST WAS $125 AND ITS CONDITION WAS DESCRIBED AS "USED. SMITH'S BID THEREFOR WAS $31.25. THE BID WAS ACCEPTED ON NOVEMBER 28. STATING THAT HE WAS OBLIGED TO SPEND $26.56 TO REPAIR IT BEFORE IT COULD BE USED. AMONG THE NUMEROUS ARTICLES OF OFFICE EQUIPMENT OFFERED FOR SALE THERE WERE OVER 700 TYPEWRITERS. THEY WERE NEATLY DISPLAYED IN TIERS. PROSPECTIVE BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING THEIR BIDS AND THEY WERE WARNED THAT FAILURE TO INSPECT WOULD CONSTITUTE NO GROUND FOR A CLAIM.

B-127540, APR. 23, 1956

TO THE HONORABLE, SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF APRIL 9, 1956, WITH ENCLOSURES, RELATIVE TO AN ERROR ALLEGED BY RICHARD J. SMITH TO HAVE BEEN MADE IN HIS BID ON WHICH CONTRACT NO. N151S-3063A DATED NOVEMBER 28, 1955, WAS BASED.

MR. SMITH BID ONLY ON ITEM NO. 34 OF SALES INVITATION NO. B-38-56. THIS ITEM COVERED ONE SMITH-CORONA TYPEWRITER WITH AN 11-INCH CARRIAGE, SERIAL NO. 1363306-B-11. ITS PUBLISHED ACQUISITION COST WAS $125 AND ITS CONDITION WAS DESCRIBED AS "USED, FAIR.' MR. SMITH'S BID THEREFOR WAS $31.25. THE BID WAS ACCEPTED ON NOVEMBER 28, 1955. BY LETTER DATED JANUARY 4, 1956, THE CONTRACTOR ADVISED OF AN ERROR IN HIS BID, IN THAT HE APPARENTLY HAD BID ON THE WRONG ITEM, AND EXPRESSED HIS DISAPPOINTMENT WITH THE TYPEWRITER RECEIVED. STATING THAT HE WAS OBLIGED TO SPEND $26.56 TO REPAIR IT BEFORE IT COULD BE USED, HE FORWARDED A RECEIPTED REPAIR BILL FOR THAT AMOUNT AND REQUESTED AN ADJUSTMENT IN THE CONTRACT PRICE. LETTER OF MARCH 5, 1956, HE MADE CLAIM FOR A REDUCTION OF $15 IN THE CONTRACT PRICE.

AMONG THE NUMEROUS ARTICLES OF OFFICE EQUIPMENT OFFERED FOR SALE THERE WERE OVER 700 TYPEWRITERS, SOME OFFERED FOR SALE AS SINGLE UNITS, OTHERS, AS LOTS WITH A SPECIFIED NUMBER OF UNITS TO THE LOT. ACCORDING TO THE REPORT OF THE SELLING ACTIVITY, SUPPORTED BY A PHOTOGRAPH, THEY WERE NEATLY DISPLAYED IN TIERS, AND PROPERLY IDENTIFIED BY ITEM NUMBERS SYSTEMATICALLY PLACED ADJACENT TO THE INDIVIDUAL MACHINES OR LOTS. THE DESCRIPTION OF EACH TYPEWRITER INCLUDED ITS SERIAL NUMBER.

PROSPECTIVE BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING THEIR BIDS AND THEY WERE WARNED THAT FAILURE TO INSPECT WOULD CONSTITUTE NO GROUND FOR A CLAIM. THE SALE WAS ON AN "AS IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY AS TO THE CONDITION OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE. THE BIDDERS WERE ADVISED FURTHER, IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS, THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT, OR FOR RESCISSION OF THE SALE, BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED.

THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CONTRACTOR MADE AN ERROR IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT RESULTED FROM THE ACCEPTANCE THEREOF. APPARENTLY THE CONTRACTING OFFICER DID NOT SUSPECT THAT MR. SMITH HAD MADE AN ERROR EITHER IN HIS INSPECTION OF THE TYPEWRITER OR THE PLACEMENT OF HIS BID ON ITEM NO. 34. THERE WAS NOTHING APPEARING ON THE FACE OF THE BID TO INDICATE THAT IT WAS NOT AS INTENDED, OR TO JUSTIFY THE CONCLUSION, UNDER THE CIRCUMSTANCES, THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED ANY ERROR THEREIN. ALL ITEMS WERE PROPERLY DESCRIBED AND IDENTIFIED. THE CONTRACTOR'S BID WAS CLEAR AND UNAMBIGUOUS. WHILE THE AMOUNT THEREOF WAS CONSIDERABLY HIGHER THAN THE NINE OTHER BIDS, RANGING FROM $17 TO $1.01, RECEIVED FOR ITEM NO. 34, IT NEVERTHELESS WAS SUBSTANTIALLY LESS THAN THE PUBLISHED ACQUISITION COST OF THE TYPEWRITER INVOLVED AND, IN THE LIGHT OF THE WIDE RANGE OF THE OTHER BIDS, IT DOES NOT APPEAR TO BE OUT OF LINE. A MERE DIFFERENCE IN PRICES BID FOR SURPLUS PROPERTY, SUCH AS HERE INVOLVED, WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF ERROR AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; AND 28 ID. 550. THE CONCLUSION IS WARRANTED THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED PRIOR TO AWARD. UNDER THE CIRCUMSTANCES THE ACCEPTANCE OF THE BID 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. IF, AS THE PURCHASER STATES, HE BID ON A DIFFERENT TYPEWRITER THAN THE ONE HE INSPECTED, THE ERROR WAS DUE TO HIS OWN FAILURE TO EXERCISE PROPER CARE AND WAS NOT INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT. SUCH ERROR WAS UNILATERAL, NOT MUTUAL, AND THEREFORE CONSTITUTES NO LEGAL GROUND FOR RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; AND SALIGMAN ET AL. V. UNITED STATES, 59 F.SUPP. 505, 507.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR RELEASING RICHARD J. SMITH FROM HIS OBLIGATIONS UNDER THE TERMS OF THE CONTRACT OR FOR AUTHORIZING THE REQUESTED REDUCTION IN THE CONTRACT PRICE.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTOR'S LETTERS DATED JANUARY 4 AND MARCH 5, 1956, THE CONTRACTING OFFICER'S REPORT DATED MARCH 7, 1956, TO THIS OFFICE, AND A COPY OF THE REPORT DATED JANUARY 30, 1956, FROM THE COMMANDER, PHILADELPHIA NAVAL SHIPYARD TO THE CHIEF, BUREAU OF SUPPLIES AND ACCOUNTS, ARE RETURNED.