B-129257, OCT. 5, 1956

B-129257: Oct 5, 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 ARMY: REFERENCE IS MADE TO LETTER DATED SEPTEMBER 14. UPON WHICH CONTRACT O.I. 2585-S-56 WAS BASED. BIDS WERE REQUESTED ON 63 ITEMS OF SURPLUS GOVERNMENT PROPERTY AND THE CONTRACTOR WAS AWARDED ITEMS NUMBERED 35. CONTRACTOR ALSO BID FOR ITEM NO. 60 COVERING 27 CHESTS BUT WAS NOT AWARDED THAT ITEM. THE PRICES AND PRICE EXTENSIONS WERE CLEARLY ENTERED AND A REQUIRED BID DEPOSIT IN EXCESS OF THE 20 PERCENT DEPOSIT REQUIRED WAS INCLUDED WITH THE BID. THE PRICES QUOTED WERE NOT SUFFICIENTLY HIGHER THAN OTHER BIDS SUBMITTED TO AROUSE SUSPICION AS TO THEIR PROPRIETY. THE CONTRACTOR BY LETTER OF SAME DATE ALLEGED MISTAKE IN THAT IT WAS NOT ITS INTENTION TO BID ON THE SUBJECT ITEMS NOTWITHSTANDING THAT THE BID FORM WAS DULY EXECUTED AND PROPERLY SIGNED.

B-129257, OCT. 5, 1956

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 14, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) REQUESTING OUR DECISION IN THE MATTER OF AN ALLEGED ERROR IN THE BID SUBMITTED ON JUNE 18, 1956, BY PENNSYLVANIA TRUCK SALES CORPORATION OF PHILADELPHIA, PENNSYLVANIA, PURSUANT TO BID INVITATION 28-009-S-56-66 DATED MAY 29, 1956, ISSUED AT THE ARMY BELLE MEAD GENERAL DEPOT, SOMERVILLE, NEW JERSEY, UPON WHICH CONTRACT O.I. 2585-S-56 WAS BASED.

BIDS WERE REQUESTED ON 63 ITEMS OF SURPLUS GOVERNMENT PROPERTY AND THE CONTRACTOR WAS AWARDED ITEMS NUMBERED 35, 36, 37, AND 38, EACH COVERING 50 WAREHOUSE TRAILERS HAVING A TOTAL ACQUISITION COST OF $8,000.00. CONTRACTOR ALSO BID FOR ITEM NO. 60 COVERING 27 CHESTS BUT WAS NOT AWARDED THAT ITEM.

A REVIEW OF THE CONTRACTOR'S BID DOES NOT DISCLOSE ANY APPARENT ERROR. THE PRICES AND PRICE EXTENSIONS WERE CLEARLY ENTERED AND A REQUIRED BID DEPOSIT IN EXCESS OF THE 20 PERCENT DEPOSIT REQUIRED WAS INCLUDED WITH THE BID. THE PRICES QUOTED WERE NOT SUFFICIENTLY HIGHER THAN OTHER BIDS SUBMITTED TO AROUSE SUSPICION AS TO THEIR PROPRIETY.

UPON RECEIPT OF NOTICE OF AWARD DATED JUNE 22, 1956, THE CONTRACTOR BY LETTER OF SAME DATE ALLEGED MISTAKE IN THAT IT WAS NOT ITS INTENTION TO BID ON THE SUBJECT ITEMS NOTWITHSTANDING THAT THE BID FORM WAS DULY EXECUTED AND PROPERLY SIGNED. A STATEMENT DATED JULY 12, 1956, SIGNED BY MORRIS SHNEER, PRESIDENT OF THE CONTRACTOR FIRM, AND SUBMITTED IN RESPONSE TO LETTER DATED JUNE 29, 1956, FROM THE PROPERTY DISPOSAL OFFICER, ALLEGES THAT ON JUNE 18, 1956, MR. SHNEER FULLY EXECUTED TWO BIDS UNDER THE SUBJECT INVITATION, THE ONE RECEIVED AND ANOTHER, WHICH PURPORTEDLY SHOULD HAVE BEEN RECEIVED INSTEAD, CONTAINING A BID ON ITEM NO. 60 ONLY. BOTH EXECUTED BIDS WERE LEFT ON MR. SHNEER'S DESK IN A MANNER INDICATING THEIR READINESS FOR MAILING. ON THE SAME DAY AND JUST PRIOR TO LEAVING PHILADELPHIA, MR. SHNEER INSTRUCTED HIS SECRETARY TO MAIL ONLY THE BID QUOTING A PRICE ON ITEM NO. 60. THROUGH ERROR, THE WRONG BID WAS MAILED AFTER MR. SHNEER HAD LEFT FOR CAMP LEJEUNE.

THE BASIC QUESTION FOR DETERMINATION HERE IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ACCEPTANCE OF A BID, PROPER ON ITS FACE, WHICH WAS MISTAKENLY MAILED BY A SECRETARY CONTRARY TO THE INSTRUCTIONS OF HER SUPERVISOR.

THE BID AS SUBMITTED WAS CLEAR AND UNAMBIGUOUS AND WAS UNQUESTIONABLY ACCEPTED IN GOOD FAITH. THE CONTRACTING OFFICER HAD NO REASON TO QUESTION THE CORRECTNESS OF THE BID, NOR ANY KNOWLEDGE THAT IT HAD BEEN UNINTENTIONALLY SUBMITTED. WHEN THE BID WAS ACCEPTED, IT CONSTITUTED A CONTRACT BINDING UPON THE GOVERNMENT AND THE PENNSYLVANIA TRUCK SALES CORPORATION IN STRICT ACCORDANCE WITH ITS TERMS.

IT IS WELL SETTLED THAT A CORPORATION, THE SAME AS A NATURAL PERSON, AS A GENERAL RULE IS BOUND BY ALL ACTS, CONTRACTS, AND DECLARATIONS OF ITS OFFICERS AND AGENTS WHICH ARE DONE OR MADE WITHIN THE GENERAL SCOPE OF THEIR AUTHORITY. 19 C.J.S. 995.

MR. SHNEER, AS PRESIDENT OF THE PENNSYLVANIA TRUCK SALES CORPORATION, WAS OBVIOUSLY ACTING WITHIN THE SCOPE OF HIS AUTHORITY IN PREPARING AND EXECUTING THE SUBJECT BID. ANY MISTAKE OR ERROR ON THE PART OF MR. SHNEER OR HIS SECRETARY WAS A UNILATERAL MISTAKE DUE EITHER TO HIS OR HER OR THEIR COMBINED NEGLIGENCE, AND AFFORDS NO GROUND FOR RELIEF. 17 COMP. GEN. 1110, 1113.

THE PENNSYLVANIA TRUCK SALES CORPORATION SHOULD BE CALLED UPON TO MAKE PAYMENT OF THE BALANCE OF THE PURCHASE PRICE AND TO REMOVE THE PROPERTY FROM THE GOVERNMENT SITE, IN DEFAULT OF WHICH THE PROPERTY SHOULD BE READVERTISED IN ACCORDANCE WITH THE PROVISIONS OF PARAGRAPH 5 OF THE GENERAL SALES TERMS AND CONDITIONS.