B-128529, AUG. 1, 1956

B-128529: Aug 1, 1956

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED JULY 5. ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT N244S- 50432 IS BASED. " WAS AWARDED TO STATE LABS INC. THE PURCHASER ALLEGED THAT $58.32 WAS A TYPOGRAPHICAL ERROR AND THAT THE HANDWRITTEN MEMO FROM WHICH THE TYPIST PREPARED THE BID SHOWED $5.832 EACH. MARKET PRICES WERE CHECKED IN THE JUNE ISSUE OF ELECTRONIC ADVERTISER AND THE TUBE IN QUESTION WAS SELLING FOR $65 EACH. SINCE IT WAS SUBSTANTIALLY IN EXCESS OF THE GOVERNMENT'S ACQUISITION COST. IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF AN ERROR AND SHOULD HAVE REQUESTED STATE LABS INC. SINCE THERE IS SOME EVIDENCE THAT THE BIDDER DID.

B-128529, AUG. 1, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED JULY 5, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL), WHO REQUESTS A DECISION REGARDING AN ERROR STATE LABS INC. ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT N244S- 50432 IS BASED.

INVITATION NO. B-135-56 COVERED THE SALE OF UNUSED MOTION PICTURE PROJECTORS AND PARTS, AND ELECTRICAL AND ELECTRONIC MATERIAL, ALL IN GOOD CONDITION. ITEM 27, WHICH CONSISTED OF 23 "TUBE, VACUUM, ELECTRON, TYPE 1P25. ACQUISITION COST: $908.50," WAS AWARDED TO STATE LABS INC. AT THE BID PRICE OF $58.32 EACH, TOTALING $1,341.36. THE ABSTRACT OF BIDS SHOWS THAT THE OTHER EIGHT BIDS RANGED FROM $0.05 TO $11.54 EACH. BY LETTER OF JUNE 12, 1956, THE PURCHASER ALLEGED THAT $58.32 WAS A TYPOGRAPHICAL ERROR AND THAT THE HANDWRITTEN MEMO FROM WHICH THE TYPIST PREPARED THE BID SHOWED $5.832 EACH. THE CONTRACTING OFFICER RECOMMENDS RELIEF OF THE BIDDER FROM ITS OBLIGATION, BUT POINTS OUT THAT THE BID DID NOT APPEAR EXCESSIVE TO HIM AT THE TIME OF AWARD SINCE, BEFORE REVIEW OF THE BIDS, MARKET PRICES WERE CHECKED IN THE JUNE ISSUE OF ELECTRONIC ADVERTISER AND THE TUBE IN QUESTION WAS SELLING FOR $65 EACH.

NOTWITHSTANDING THIS FACT, HOWEVER, IN VIEW OF THE GROSS DISPARITY BETWEEN THE STATE LABS BID AND THE OTHER EIGHT BIDS RECEIVED, AND SINCE IT WAS SUBSTANTIALLY IN EXCESS OF THE GOVERNMENT'S ACQUISITION COST, IT APPEARS THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF AN ERROR AND SHOULD HAVE REQUESTED STATE LABS INC. TO VERIFY ITS BID PRIOR TO AWARD. UNDER THE CIRCUMSTANCES, AND SINCE THERE IS SOME EVIDENCE THAT THE BIDDER DID, IN FACT, MAKE AN ERROR IN ITS QUOTATION OF THE PRICE, IT MAY BE CONCLUDED THAT ACCEPTANCE OF THE BID DID NOT RESULT IN A BINDING AGREEMENT.

ACCORDINGLY, THE AWARD OF ITEM 27 TO STATE LABS INC. SHOULD BE CANCELLED.