B-127719, MAY 3, 1956

B-127719: May 3, 1956

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED APRIL 24. WAS BASED. BIDS WERE REQUESTED ON 52 ITEMS OF GOVERNMENT-OWNED SURPLUS PROPERTY. ITS OFFER WAS $0.451 PER POUND. THE BIDS WERE OPENED ON JANUARY 17. ITEM NO. 38 WAS AWARDED TO THE CORPORATION ON JANUARY 19. THE CORPORATION ADVISED THAT IT HAD MADE AN ERROR IN SUBMITTING A BID OF $0.451 PER POUND ON ITEM NO. 38 SINCE ITS INTENDED BID FOR THE ITEM WAS $0.0451 PER POUND. THE CONTRACTOR COMPLAINED THAT "THE GOODS ARE DECOMPOSED AND CANNOT BE MADE INTO A GARMENT.'. THE SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY AS TO. PROSPECTIVE BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING THEIR BIDS AND.

B-127719, MAY 3, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED APRIL 24, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS), RELATIVE TO AN ALLEGED ERROR ON ITEM NO. 38 OF AN UNDATED BID SUBMITTED BY IRVING RAINCOAT COMPANY, INC., ON WHICH UNNUMBERED CONTRACT OF SALE DATED JANUARY 19, 1956, WAS BASED.

BY INVITATION NO. 36-030-S-56-19 DATED DECEMBER 21, 1955, BIDS WERE REQUESTED ON 52 ITEMS OF GOVERNMENT-OWNED SURPLUS PROPERTY, INCLUDING ITEM NO. 38, WHICH COVERED 1,365 POUNDS OF MATERIAL DESCRIBED AS FOLLOWS:

"CLOTH, COTTON, SHEETING, SYNTHETIC RESIN COATED, OD-7, 48 INCH, (ROLLS WRAPPED IN BURLAP), (UNUSED) APPROX. 1,584 YDS. ACQ. COST $1,061.28.'

THE CORPORATION SUBMITTED A BID ON ITEM NO. 38 ONLY. ITS OFFER WAS $0.451 PER POUND, A TOTAL PRICE OF $615.62. THE BIDS WERE OPENED ON JANUARY 17, 1956, AND ITEM NO. 38 WAS AWARDED TO THE CORPORATION ON JANUARY 19, 1956. BY LETTER OF JANUARY 30, 1956, THE CORPORATION ADVISED THAT IT HAD MADE AN ERROR IN SUBMITTING A BID OF $0.451 PER POUND ON ITEM NO. 38 SINCE ITS INTENDED BID FOR THE ITEM WAS $0.0451 PER POUND. THEREFORE, IT REQUESTED THAT IT BE NOT REQUIRED TO ACCEPT DELIVERY OF THE ITEM AT ITS BID PRICE. BY LETTER OF FEBRUARY 14, 1956, THE CONTRACTOR COMPLAINED THAT "THE GOODS ARE DECOMPOSED AND CANNOT BE MADE INTO A GARMENT.' NO EVIDENCE HAS BEEN FURNISHED BY THE CORPORATION, HOWEVER, TO SUBSTANTIATE ITS ALLEGATION OF ERROR AND ITS ALLEGED INTENDED BID PRICE, ALTHOUGH THE CONTRACTING OFFICER BY LETTER OF FEBRUARY 2, 1956, SUGGESTED THE TYPE OF SUPPORTING EVIDENCE THAT SHOULD BE SUBMITTED.

THE SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY AS TO, AMONG OTHER THINGS, KIND, CHARACTER, QUALITY, OR ITS FITNESS FOR ANY USE OR PURPOSE. PROSPECTIVE BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING THEIR BIDS AND, IN PARAGRAPH 2 OF THE GENERAL SALES TERMS AND CONDITIONS, THEY WERE ADVISED 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 SALE WAS ON AN "AS IS" AND "WHERE IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY AS TO, AMONG OTHER THINGS, KIND, CHARACTER, QUALITY, OR ITS FITNESS FOR ANY USE OR PURPOSE. PROSPECTIVE BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING THEIR BIDS AND, IN PARAGRAPH 2 OF THE GENERAL SALES TERMS AND CONDITIONS, THEY WERE ADVISED 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.

AS TO THE ALLEGED ERROR IN PRICE, NO ERROR IS APPARENT ON THE FACE OF THE BID WHICH IS CLEAR AND UNAMBIGUOUS BOTH AS TO THE UNIT PRICE QUOTED AND THE EXTENSION. THERE IS NOTHING TO INDICATE THAT THE BID WAS NOT AS INTENDED. APPARENTLY, THE CONTRACTING OFFICER DID NOT NOTICE OR HAVE REASON TO SUSPECT ANY ERROR IN THE BID. HE STATES THAT, WHILE THIS WAS THE FIRST TIME THE DEPOT OFFERED FOR SALE MATERIAL OF THE PRECISE TYPE AS THAT FOR WHICH BIDS WERE REQUESTED UNDER ITEM NO. 38, THE CONTRACTOR'S BID WAS IN LINE WITH PRICES WHICH HAD BEEN RECEIVED BY THE DEPOT FOR THE SALE OF OTHER SIMILAR MATERIALS. THE ACQUISITION COST OF THE FABRIC HERE INVOLVED WAS SUBSTANTIALLY MORE THAN THE AMOUNT OF THE CONTRACTOR'S BID. WHILE THE DIFFERENCE BETWEEN THE CORPORATION'S BID OF $0.451PER POUND ON THE ITEM AND THE ONLY OTHER BID OF $0.013 PER POUND RECEIVED THEREON IS CONSIDERABLE, ORDINARILY NO FAIR COMPARISON WITH OTHER BIDS CAN BE MADE WHERE, AS IN THE PRESENT CASE, ONLY TWO WIDELY VARIANT BIDS ARE RECEIVED ON AN ITEM, THERE BEING NO MORE REASON FOR CONSIDERING THE HIGH BID TOO HIGH THAN FOR CONSIDERING THAT A MISTAKE WAS MADE IN THE LOWER BID. SEE 20 COMP. GEN. 286. MOREOVER, A MERE DIFFERENCE IN THE PRICES BID IN A SALE OF 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 THE 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 CORPORATION'S BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD.

THE ACCEPTANCE OF THE BID UNDER THESE 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. SINCE THE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON THE BIDDER AND SINCE IT IS EVIDENT THAT IF AN ERROR WAS MADE AS ALLEGED, SUCH ERROR WAS UNILATERAL, NOT MUTUAL, THE CONTRACTOR IS NOT ENTITLED TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 259; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, THE RECORD IN THIS CASE AFFORDS NO LEGAL BASIS FOR RELEASING THE CONTRACTOR FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT.