B-128013, MAY 25, 1956

B-128013: May 25, 1956

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TO THE HONORABLE SECRETARY OF COMMERCE: REFERENCE IS MADE TO A LETTER DATED MAY 18. THE LETTER AND ITS ATTACHMENTS INDICATE THAT SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. WERE OPENED ON APRIL 26. STATEMENT AND CERTIFICATE OF AWARD OF THE CONTRACT TO FAY-BILL DISTRIBUTING COMPANY WAS EXECUTED BY THE CONTRACTING OFFICER ON MAY 1. NOTIFICATION OF AWARD WAS NOT MAILED BECAUSE THE CONTRACTING OFFICER RECEIVED ORAL ADVICE FROM THE HIGH BIDDER LATER THAT SAME DAY THAT HIS BID WAS SUBMITTED IN THE ERRONEOUS BELIEF HE WAS BIDDING ON NEW RATHER THAN USED ELECTRONIC TUBES. THE OWNER OF FAY-BILL DISTRIBUTING COMPANY ADVISED THE BID WAS COMPUTED IN HIS ABSENCE AND SIGNED BY HIM WITHOUT CLOSE EXAMINATION IN ORDER TO HAVE THE BID SUBMITTED PRIOR TO THE DATE SET FOR BID OPENING.

B-128013, MAY 25, 1956

TO THE HONORABLE SECRETARY OF COMMERCE:

REFERENCE IS MADE TO A LETTER DATED MAY 18, 1956, FROM YOUR ASSISTANT SECRETARY FOR ADMINISTRATION, RELATIVE TO A REQUEST FROM FAY BILL DISTRIBUTING COMPANY FOR WITHDRAWAL OF A BID FOR THE PURCHASE OF 5,255 USED ELECTRONIC TUBES SUBMITTED UNDER BUREAU OF THE CENSUS INVITATION FOR BIDS NO. 5626.

THE LETTER AND ITS ATTACHMENTS INDICATE THAT SEVEN BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION, WERE OPENED ON APRIL 26, 1956, AND CONSISTED OF THE HIGH BID SUBMITTED BY FAY-BILL DISTRIBUTING COMPANY IN THE AMOUNT OF $1,994.19 AND SIX OTHERS IN AMOUNTS RANGING FROM $110.38 TO $816.83. STATEMENT AND CERTIFICATE OF AWARD OF THE CONTRACT TO FAY-BILL DISTRIBUTING COMPANY WAS EXECUTED BY THE CONTRACTING OFFICER ON MAY 1, 1956; HOWEVER, NOTIFICATION OF AWARD WAS NOT MAILED BECAUSE THE CONTRACTING OFFICER RECEIVED ORAL ADVICE FROM THE HIGH BIDDER LATER THAT SAME DAY THAT HIS BID WAS SUBMITTED IN THE ERRONEOUS BELIEF HE WAS BIDDING ON NEW RATHER THAN USED ELECTRONIC TUBES. IN A WRITTEN REQUEST FOR WITHDRAWAL OF THE BID, DATED MAY 2, 1956, THE OWNER OF FAY-BILL DISTRIBUTING COMPANY ADVISED THE BID WAS COMPUTED IN HIS ABSENCE AND SIGNED BY HIM WITHOUT CLOSE EXAMINATION IN ORDER TO HAVE THE BID SUBMITTED PRIOR TO THE DATE SET FOR BID OPENING, AND HE REALIZED AFTER THE BID HAD BEEN MAILED THAT IT HAD BEEN COMPUTED WITHOUT CONSIDERATION OF THE FACT THAT THE TUBES OFFERED FOR SALE WERE USED ARTICLES.

ACCORDINGLY, OUR DECISION IS REQUESTED AS TO WHETHER THE BID SUBMITTED BY FAY-BILL DISTRIBUTING COMPANY MAY BE WITHDRAWN, AND ADVICE IS REQUESTED ON THE GENERAL QUESTION OF WHETHER A BIDDER MAY LEGALLY OBTAIN A WITHDRAWAL OF HIS BID ON A CLAIM OF ERROR UNDER ANY CIRCUMSTANCES AFTER EXECUTION OF ACCEPTANCE FOR THE GOVERNMENT HAS BEEN ACCOMPLISHED BUT PRIOR TO THE MAILING OF SUCH ACCEPTANCE TO THE SUCCESSFUL BIDDER.

WITH RESPECT TO THE LATTER QUESTION, IT IS WELL ESTABLISHED THAT THE "TIME OF ACCEPTANCE" BY THE GOVERNMENT OF A BIDDER'S OFFER MAY NOT, UNLESS EXPRESSLY PROVIDED OTHERWISE, PRECEDE THE TIME AT WHICH THE ACCEPTANCE IS MAILED TO THE BIDDER. BURTON V. UNITED STATES, 202 U.S. 344, 384; STEBEL V. UNITED STATES, 108 C.CLS. 35; 35 COMP. GEN. 272. AS STATED AT PAGE 44 IN THE STEBEL CASE CITED ABOVE:

"THE TYPING OF THE LETTER ON APRIL 10 DID NOT CONSTITUTE THE AWARD, ALTHOUGH IT MAY HAVE BEEN TYPED AT THE DIRECTION OF THE CONTRACTING OFFICER. UNTIL THAT OFFICIAL HAD AFFIXED HIS SIGNATURE TO THE LETTER AND MAILED IT, IT WAS STILL WITHIN HIS PROVINCE TO CHANGE HIS DECISION AS TO WHOM THE AWARD SHOULD BE MADE.'

CF. RHODE ISLAND TOOL CO. V. UNITED STATES, 130 C.CLS. 698.

ACCORDINGLY, YOU ARE ADVISED THAT WHERE A BIDDER ALLEGES ERROR AFTER THE ACCEPTANCE HAS BEEN EXECUTED BY THE CONTRACTING OFFICER, BUT PRIOR TO THE TIME AT WHICH THE ACCEPTANCE IS MAILED TO THE BIDDER, AND SUPPORTS SUCH ALLEGATION WITH CLEAR AND CONVINCING EVIDENCE THAT A MISTAKE HAS BEEN MADE, IT IS LEGALLY PERMISSIBLE FOR THE BID TO BE WITHDRAWN. B-123577, MAY 24, 1955. IT FOLLOWS THAT THE ALLEGATION OF ERROR BY THE HIGH BIDDER IN THE INSTANT CASE WAS SUBMITTED PRIOR TO THE AWARD OF A CONTRACT AND HIS REQUEST FOR WITHDRAWAL BASED ON SUCH ALLEGED ERROR MUST BE CONSIDERED ON THAT BASIS.

THE RULE IS WELL ESTABLISHED THAT IN ORDER TO AUTHORIZE THE WITHDRAWAL OF A BID ON THE BASIS OF A MISTAKE ALLEGED AFTER OPENING AND PRIOR TO AWARD THE EVIDENCE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A BONA FIDE MISTAKE RESULTED IN THE SUBMISSION OF A BID PRICE OTHER THAN INTENDED, AND SUCH EVIDENCE MUST LEAVE NO ROOM FOR SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR AVOIDING THE CONSEQUENCES OF AN ILL-ADVISED BID. SEE 9 COMP. GEN. 339; 14 ID. 78, 15 ID. 565. THE PRESENT CASE, THE HIGH BIDDER HAS FAILED TO OFFER ANY EXPLANATION OF HIS FAILURE TO REQUEST WITHDRAWAL OF HIS BID PRIOR TO RECEIPT OF ADVICE THAT HE WAS THE SUCCESSFUL BIDDER. NOR HAS HE OFFERED ANY EVIDENCE IN SUPPORT OF HIS ALLEGATION THAT HIS BID PRICE WAS NOT BASED ON A FAIR AND REASONABLE VALUATION OF USED ARTICLES OF THE TYPES OFFERED FOR SALE. THE FACT THAT HIS BID PRICE WAS MORE THAN DOUBLE THE AMOUNT OF THE SECOND-HIGH BID MAY NOT BE REGARDED AS ESTABLISHING AN ERROR SINCE A WIDE RANGE IN THE PRICES BID FOR SURPLUS PROPERTY IS NOT UNUSUAL. SUPPORT FOR SUCH CONCLUSION IN THIS CASE IS TO BE DERIVED FROM THE FACT THAT THE SECOND- HIGH BID WAS SUBMITTED IN AN AMOUNT MORE THAN SEVEN TIMES GREATER THAN THE LOW BID PRICE, AND UNIT BID PRICES ON WHICH THE HIGH BID WAS COMPUTED WERE IN SEVERAL INSTANCES LOWER THAN THOSE SUBMITTED BY THE UNSUCCESSFUL BIDDERS AND APPRECIABLY LOWER THAN THE COST TO YOUR DEPARTMENT OF NEW TUBES AT WHOLESALE PRICES.

IN THE CIRCUMSTANCES, IT MUST BE CONCLUDED THAT THE EVIDENCE OF RECORD IS INSUFFICIENT TO SUPPORT AN ALLEGATION THAT THE BID SUBMITTED BY FAY-BILL DISTRIBUTING COMPANY WAS BASED ON AN ERRONEOUS ASSUMPTION THAT THE ARTICLES OFFERED FOR SALE WERE IN NEW CONDITION. IN THE ABSENCE OF ..END