B-130968, MAR. 28, 1957

B-130968: Mar 28, 1957

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER OF MARCH 6. IN WHICH THERE IS SUBMITTED FOR OUR CONSIDERATION A MISTAKE IN BID ALLEGED BY PEDRO SALAZAR S. TO HAVE BEEN MADE IN CONNECTION WITH SALES CONTRACT N509-1149. INCLUDED AMONG THOSE ITEMS AND DESCRIBED AS ITEM 24 WAS A FOUR-WHEEL USED TRAILER. THE ABSTRACT OF BIDS SHOWS THAT ON ITEM 24 ELEVEN BIDS WERE RECEIVED. THE HIGH BID OF $185 WAS SUBMITTED BY PEDRO SALAZAR S. IT WILL BE NOTED THAT THE COMPLAINING BIDDER WAS BIDDING $135 MORE THAN THE SECOND HIGHEST BIDDER AND 85 PERCENT MORE THAN THE ESTIMATED ACQUISITION COST TO THE GOVERNMENT OF THE FOUR-WHEEL USED TRAILER. IT IS NOTED THAT 12 BIDS ON THIS ITEM WERE RECEIVED AND THE FOUR HIGHEST BIDS WERE IN THE AMOUNTS OF $333.

B-130968, MAR. 28, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER OF MARCH 6, 1957, WITH ENCLOSURES, FROM CAPTAIN D. C. MACKENZIE, ASSISTANT CHIEF, BUREAU OF SUPPLIES AND ACCOUNTS, IN WHICH THERE IS SUBMITTED FOR OUR CONSIDERATION A MISTAKE IN BID ALLEGED BY PEDRO SALAZAR S., BOX 1810, PANAMA, R.P., TO HAVE BEEN MADE IN CONNECTION WITH SALES CONTRACT N509-1149, (SALES CATALOG B 4-57) ENTERED INTO WITH THE U.S. NAVAL STATION, RODMAN, CANAL ZONE ON JANUARY 15, 1957.

IT APPEARS THAT BY INVITATION NO. B-4-57, ISSUED JANUARY 9, 1957, THE U.S. NAVAL STATION, RODMAN, CANAL ZONE, ADVERTISED FOR SALE A NUMBER OF ITEMS OF EXCESS PROPERTY. INCLUDED AMONG THOSE ITEMS AND DESCRIBED AS ITEM 24 WAS A FOUR-WHEEL USED TRAILER, WITH THE WOODWORK ROTTED, IN POOR CONDITION, WITH AN ESTIMATED ACQUISITION COST TO THE GOVERNMENT OF $100. ITEM 25 OF THE INVITATION OFFERED FOR SALE A USED ARC WELDER, IN POOR CONDITION, WITH AN ACQUISITION COST TO THE GOVERNMENT OF $1,500. APPEARS FURTHER THAT ON JANUARY 17, 1957, OR TWO DAYS AFTER AWARD OF ITEM 24, THE CONTRACTOR ADVISED THE DISPOSAL OFFICER THAT HE MADE AN ERROR IN HIS BID IN THAT HE INTENDED TO BID ON ITEM 25 INSTEAD OF ITEM 24. THE ABSTRACT OF BIDS SHOWS THAT ON ITEM 24 ELEVEN BIDS WERE RECEIVED. THE HIGH BID OF $185 WAS SUBMITTED BY PEDRO SALAZAR S. THE OTHER 10 BIDS RANGED FROM $6 TO $50. THUS, IT WILL BE NOTED THAT THE COMPLAINING BIDDER WAS BIDDING $135 MORE THAN THE SECOND HIGHEST BIDDER AND 85 PERCENT MORE THAN THE ESTIMATED ACQUISITION COST TO THE GOVERNMENT OF THE FOUR-WHEEL USED TRAILER. AS TO THE BIDS ON ITEM 25, IT IS NOTED THAT 12 BIDS ON THIS ITEM WERE RECEIVED AND THE FOUR HIGHEST BIDS WERE IN THE AMOUNTS OF $333, $289, $166.88 AND $139. THE CONTRACTOR'S INTENDED BID OF $185 ON THIS ITEM WOULD HAVE BEEN IN LINE WITH THE OTHER BIDS RECEIVED.

ORDINARILY WHEN A BID HAS BEEN ACCEPTED BY THE GOVERNMENT, THE BIDDER IS BOUND TO PERFORM THE CONTRACT SO CONSUMMATED AND MUST BEAR THE CONSEQUENCES OF ANY MISTAKE IN HIS BID. HOWEVER, IT IS WELL ESTABLISHED THAT WHERE THE PARTY RECEIVING THE OFFER OR BID, KNOWS OR HAS REASON TO KNOW, THAT THE BIDDER MADE A MISTAKE, THE OFFEREE WILL NOT BE PERMITTED TO TAKE ADVANTAGE OF THE ERROR. WHERE THERE IS A PRESUMPTION OF ERROR ON THE FACE OF THE BID EITHER BECAUSE OF A WIDE DISPARITY BETWEEN THE HIGH BID AND OTHER BIDS, OR, AS APPEARS TO BE THE CASE HERE, BECAUSE OF THE HIGH BID BEING CONSIDERABLY IN EXCESS OF THE ACQUISITION COST TO THE GOVERNMENT, AN AWARD BY A GOVERNMENT CONTRACTING OFFICER DOES NOT GIVE RISE TO A BINDING CONTRACT IF THE RECORD ESTABLISHES THAT A BONA FIDE ERROR WAS MADE. MASON COAL CO. V. UNITED STATES, 64 C.CLS. 533.

IT SEEMS CLEAR IN VIEW OF THE GREAT DISPARITY BETWEEN THE HIGH BID AND THE OTHER BIDS RECEIVED ON ITEM 24 AND THE FACT THAT PEDRO SALAZAR S. BID 85 PERCENT MORE THAN THE ACQUISITION COST TO THE GOVERNMENT OF THAT ITEM, THAT THE CONTRACTING OFFICER WAS ON NOTICE OF POSSIBLE ERROR, AND SHOULD HAVE REQUESTED CONFIRMATION OF THE BID BEFORE MAKING THE AWARD.

ACCORDINGLY, THE CONTRACT MAY BE CANCELLED, AND THE BID DEPOSIT REFUNDED TO THE PURCHASER.

THE PAPERS WHICH ACCOMPANIED THE LETTER OF MARCH 6, 1957, ARE RETURNED HEREWITH.