B-128051, JUN. 19, 1956

B-128051: Jun 19, 1956

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED MAY 21. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED IN THIS CASE AS RECOMMENDED BY THE CONTRACTING OFFICER. AWARD WAS MADE TO MR. ONLY ITEMS 7 AND 8 ARE BEING CONSIDERED HEREIN SINCE THE CONTRACTOR ALLEGED MISTAKE ONLY AS TO SUCH ITEMS. THE CONTRACTOR STATED THAT THE EXTENDED AMOUNT OR TOTAL BID PRICE AS TO ITEM 7 WAS AS INTENDED. THAT IS. THAT THE EXTENDED AMOUNT OR TOTAL BID PRICE AS TO ITEM 8 WAS AS INTENDED. THAT IS. THAT THE UNIT PRICE AS TO EACH OF THESE ITEMS WAS TYPED IN AS $0.025 WHEREAS IT SHOULD HAVE BEEN $0.0025. PAYNE SHOWED TOTAL AMOUNTS BID THAT WERE MATHEMATICALLY IN ERROR BASED ON THE UNIT PRICES INVOLVED.

B-128051, JUN. 19, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED MAY 21, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY (MATERIAL), RELATING TO A MISTAKE IN BID ALLEGED BY MR. JOHN H. PAYNE, PENSACOLA, FLORIDA, UNDER CONTRACT NO. N204S-31709, (SALES INVITATION NO. B-31-56) ISSUED BY THE U. S. NAVAL AIR STATION, PENSACOLA, FLORIDA. IN VIEW OF THE FACTS DISCLOSED IN THE ENCLOSURES TO THE LETTER OF MAY 21, 1956, A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED IN THIS CASE AS RECOMMENDED BY THE CONTRACTING OFFICER.

THE RECORD SHOWS THAT BY INVITATION NO. B-31-56, DATED JANUARY 16, 1956, THE U. S. NAVAL AIR STATION, PENSACOLA, FLORIDA, OFFERED FOR SALE CERTAIN MISCELLANEOUS SALVAGE MATERIALS, THE BIDS TO BE OPENED AT 10:15 A.M. ON FEBRUARY 7, 1956. ON THAT DAY MR. JOHN H. PAYNE SUBMITTED BIDS FOR SEVERAL OF THE ITEMS OF PROPERTY BEING OFFERED FOR SALE, AND UNDER DATE OF FEBRUARY 16, 1956, AWARD WAS MADE TO MR. PAYNE AS TO ITEMS 6, 7, 8, 13, 14, 15, 16, 29 AND 42, FOR A TOTAL BID PRICE OF $379.79. ONLY ITEMS 7 AND 8 ARE BEING CONSIDERED HEREIN SINCE THE CONTRACTOR ALLEGED MISTAKE ONLY AS TO SUCH ITEMS.

IN LETTER OF FEBRUARY 28, 1956, THE CONTRACTOR STATED THAT THE EXTENDED AMOUNT OR TOTAL BID PRICE AS TO ITEM 7 WAS AS INTENDED, THAT IS, $10.22, AND THAT THE EXTENDED AMOUNT OR TOTAL BID PRICE AS TO ITEM 8 WAS AS INTENDED, THAT IS, $24.50, BUT THAT THE UNIT PRICE AS TO EACH OF THESE ITEMS WAS TYPED IN AS $0.025 WHEREAS IT SHOULD HAVE BEEN $0.0025. IN HIS STATEMENT OF FACT AND RECOMMENDATION DATED MARCH 8, 1956, THE CONTRACTING OFFICER MADE NO REFERENCE TO THE FACT THAT THE EXTENDED BID PRICES SUBMITTED BY MR. PAYNE SHOWED TOTAL AMOUNTS BID THAT WERE MATHEMATICALLY IN ERROR BASED ON THE UNIT PRICES INVOLVED, IT BEING SIMPLY STATED BY THE CONTRACTING OFFICER THAT THE UNIT PRICES BID WERE NOT CONSIDERED TO BE FAR IN EXCESS OF THE NEXT HIGHEST BID OR OF THE TRUE VALUE OF THE MATERIAL.

WHILE, AS STATED BY THE CONTRACTING OFFICER, THE UNIT PRICES BID HEREIN MAY NOT HAVE BEEN IN EXCESS OF THE TRUE VALUE OF THE MATERIALS, IT IS NOTED THAT AS TO ITEM 7 THE UNIT PRICE BID WAS APPROXIMATELY TWICE THAT OF THE NEXT HIGHEST BID, AND THAT AS TO ITEM 8 THE UNIT PRICE BID WAS MORE THAN TWICE THAT OF THE NEXT HIGHEST BID. COUPLED WITH THE FACT--- OBVIOUS UPON SIMPLE MULTIPLICATION OF THE QUANTITIES INVOLVED BY THE UNIT PRICES BID--- THAT EITHER THE UNIT PRICES OR THE EXTENSIONS WERE IN ERROR, THE VARIATION APPEARS TO HAVE BEEN SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF PROBABLE ERROR AND TO REQUIRE VERIFICATION BEFORE AWARD. IN REACHING THIS CONCLUSION WE HAVE NOT OVERLOOKED THE PROVISION IN PARAGRAPH 3 OF THE GENERAL SALES TERMS AND CONDITIONS TO THE EFFECT THAT IN CASE OF ERROR IN THE EXTENSION OF PRICES IN THE BID, THE UNIT PRICES WILL GOVERN.

IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE ACCEPTANCE OF THE BIDS AS TO ITEMS 7 AND 8 DID NOT CREATE A CONTRACT BINDING UPON THE BIDDER, AND THE AWARD AS TO THOSE ITEMS SHOULD ACCORDINGLY BE CANCELLED.

THE PAPERS TRANSMITTED HERE, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACT, ARE RETURNED.