B-132304, JUN. 27, 1957

B-132304: Jun 27, 1957

Additional Materials:

Contact:

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

 

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

MCCONNAUGHEY: REFERENCE IS MADE TO YOUR LETTER OF JUNE 24. THE BID WAS ACCOMPANIED BY THE REQUIRED BID DEPOSIT OF AT LEAST FIVE PERCENT OF THE BID PRICE. SIXTEEN OTHER BIDS WERE RECEIVED. PALMER WAS APPROXIMATELY $482. IT IS REPORTED BY THE PUBLIC HOUSING ADMINISTRATION THAT IMMEDIATELY FOLLOWING THE BID OPENING. PALMER WAS ACCEPTED BY LETTER OF MAY 24. THERE IS A SUBSTANTIAL QUESTION AS TO WHETHER THE GOVERNMENT'S ACCEPTANCE OF MR. PALMER'S BID WAS EFFECTIVE PRIOR TO NOTICE OF THE ALLEGED ERROR. FOR THE PURPOSES OF THIS DECISION THE QUESTION AS TO THE ALLEGED ERROR WILL BE CONSIDERED SOLELY ON THE BASIS OF ITS MERITS. IT IS AVERRED THAT THE BID OF LESTER E. PALMER WAS SUBMITTED ON HIS BEHALF AND SEVERAL OTHER PERSONS OF A GROUP WHO HAD BEEN INTERESTED IN PURCHASING PROPERTIES FROM THE GOVERNMENT.

B-132304, JUN. 27, 1957

TO SHEA, GREENMAN, GARDNER, AND MCCONNAUGHEY:

REFERENCE IS MADE TO YOUR LETTER OF JUNE 24, 1957, REQUESTING ON BEHALF OF LESTER E. PALMER, ., ET AL., CORRECTION OF A BID SUBMITTED TO THE PUBLIC HOUSING ADMINISTRATION FOR THE PURCHASE OF PROJECT PA 364343-5, KNOWN AS LACEY PARK, IN WARMINSTER TOWNSHIP,BUCKS COUNTY, PENNSYLVANIA.

ON APRIL 7, 1957, THE WASHINGTON REGIONAL OFFICE OF THE PUBLIC HOUSING ADMINISTRATION ADVERTISED FOR BIDS--- TO BE OPENED AT 2:00 P.M. E.S.T. ON MAY 23, 1957--- FOR THE SALE OF THE LACEY PARK PROJECT CONSISTING OF 1,169 LIVING UNITS CONSTRUCTED IN 1943 TO HOUSE WAR WORKERS. IN RESPONSE TO THE INVITATION, LESTER E. PALMER, JR., SUBMITTED A BID IN THE AMOUNT OF $3,063,111. THE BID WAS ACCOMPANIED BY THE REQUIRED BID DEPOSIT OF AT LEAST FIVE PERCENT OF THE BID PRICE. SIXTEEN OTHER BIDS WERE RECEIVED. THE BID OF LESTER E. PALMER WAS APPROXIMATELY $482,000 HIGHER THAN THE NEXT HIGHEST BID. IT IS REPORTED BY THE PUBLIC HOUSING ADMINISTRATION THAT IMMEDIATELY FOLLOWING THE BID OPENING, GOVERNMENT OFFICIALS DISCUSSED WITH MR. PALMER THE SETTLEMENT OF THE SALE, POINTING OUT THE DESIRE OF THE GOVERNMENT TO CLOSE AS OF JUNE 30. THE BID OF LESTER E. PALMER WAS ACCEPTED BY LETTER OF MAY 24, 1957.

THERE IS A SUBSTANTIAL QUESTION AS TO WHETHER THE GOVERNMENT'S ACCEPTANCE OF MR. PALMER'S BID WAS EFFECTIVE PRIOR TO NOTICE OF THE ALLEGED ERROR. HOWEVER, FOR THE PURPOSES OF THIS DECISION THE QUESTION AS TO THE ALLEGED ERROR WILL BE CONSIDERED SOLELY ON THE BASIS OF ITS MERITS.

IT IS AVERRED THAT THE BID OF LESTER E. PALMER WAS SUBMITTED ON HIS BEHALF AND SEVERAL OTHER PERSONS OF A GROUP WHO HAD BEEN INTERESTED IN PURCHASING PROPERTIES FROM THE GOVERNMENT. IT IS ALLEGED THAT ONE OF THE MEMBERS OF THE GROUP, DR. GABRIEL ELIAS, HAD BEEN GIVEN AUTHORITY AND RESPONSIBILITY IN ALL CASES TO MAKE THE FINAL DETERMINATION FOR THE GROUP AS TO THE AMOUNT OF THE BID TO BE MADE FOR PARTICULAR PROPERTIES SOUGHT TO BE PURCHASED BY THE GROUP. WITH RESPECT TO THIS PARTICULAR PURCHASE, THE MEMBERS MET ON MAY 21, AND DISCUSSED VARIOUS PRICES RANGING BETWEEN $2,250,000 AND $3,000,000. IT WAS AGREED THAT DR. ELIAS WOULD DETERMINE THE AMOUNT OF THE BID TO BE MADE AFTER HE HAD GIVEN FURTHER CONSIDERATION TO VARIOUS PERTINENT FACTORS. BID PAPERS WERE FILLED OUT, EXCEPT FOR THE PRICE TO BE BID, AND A CERTIFIED CHECK FOR $150,000 WAS OBTAINED AS A BID DEPOSIT ON A BID UP TO $3,000,000. THE BID DOCUMENTS WERE CARRIED BY MR PALMER TO WASHINGTON, D.C., TO BE SUBMITTED IN PERSON. MR. PALMER WAS TO CHECK WITH DR. ELIAS BY TELEPHONE AS TO THE ACTUAL PRICE TO BE BID, WHICH HE WAS TO INSERT IN THE BID PRIOR TO ITS SUBMISSION.

IT IS ASSERTED THAT ON THE EVENING OF MAY 22, DR. ELIAS MADE VARIOUS COMPUTATIONS IN AN EFFORT TO EVALUATE THE PROPERTY AND ARRIVE AT AN APPROPRIATE AMOUNT TO BID AND THAT HIS COMPUTATIONS WERE SUMMARIZED IN HIS HANDWRITING ON AN 8 1/2 BY 11 INCH YELLOW PAPER CONSISTING OF FOUR PAGES, ENTITLED "LP FIGURES AND BID ESTIMATE--- 11 P.M., MAY 22, 1957," AND THAT DR. ELIAS ARRIVED AT A FIGURE OF $2,663,111. HOWEVER, THE NEXT MORNING, MAY 23, DR. ELIAS BECAME APPREHENSIVE OF THE AMOUNT DECIDED UPON THE NIGHT BEFORE AND DECIDED TO TAKE A FINAL LOOK AT THE SITUATION INVOLVED AT THE PROJECT. THEREUPON, DR. ELIAS ATTEMPTED WITHOUT SUCCESS TO TELEPHONE MR. PALMER AT HIS HOTEL IN WASHINGTON, D.C., AND ADVISE HIM OF THE PRICE ARRIVED AT AND WHICH HE SHOULD BID, UNLESS HE WAS LATER NOTIFIED OF A CHANGE. ALSO, DR. ELIAS ATTEMPTED TO CALL ANOTHER MEMBER OF THE GROUP TO ADVISE HIM OF THE FINAL DETERMINATION OF THE AMOUNT TO BE BID AND THAT HE WAS GOING TO VISIT THE PROJECT AGAIN BUT HIS TELEPHONE WAS BUSY AND HE FELT HE COULD NOT WAIT TO REACH HIM IF HE WERE TO GO FROM LONG ISLAND TO THE PROJECT FOR A LAST LOOK AT THE PROPERTY BEFORE THE BID WAS SUBMITTED. ACCORDINGLY, DR. ELIAS ADVISED HIS WIFE, ELMA, OF THE PROPOSED BID AND SHOWED HER IN THE PRESENCE OF HIS MOTHER, BELLA ANGEL, THE WORKSHEETS AND POINTED OUT THE PROPOSED BID ON PAGE 4 OF THE WORKSHEETS, ADVISING ELMA TO GIVE THAT FIGURE TO MR. PALMER WHEN MR. PALMER CALLED UNLESS BEFORE THAT TIME HE HAD TELEPHONED FROM THE PROJECT TO CHANGE THE BID. IT IS STATED THAT ELMA, WHO AT THAT TIME WAS ABOUT EIGHT MONTHS PREGNANT, IS A COLLEGE GRADUATE AND A VERY INTELLIGENT AND RELIABLE PERSON AND THAT DR. ELIAS HAD EVERY REASON TO EXPECT THAT SHE WOULD GIVE MR. PALMER THE CORRECT INFORMATION FROM HIS WORKSHEETS AND COULD INTERPRET THE COMPUTATIONS CORRECTLY IF ANY QUESTION SHOULD ARISE ABOUT THE BASIS FOR THE FIGURE. HOWEVER, AFTER DR. ELIAS LEFT, HIS WIFE, ELMA, DEVELOPED A TOOTHACHE AND WENT TO A DENTIST. DURING HER ABSENCE, MR. PALMER TELEPHONED TO ASCERTAIN THE AMOUNT TO BE BID AND BELLA ANGEL, DR. ELIAS' MOTHER, READ THE FIGURE AS $3,063,111. ALSO, THE OTHER MEMBER OF THE GROUP WHOM DR. ELIAS WAS UNABLE TO REACH PREVIOUSLY WAS ADVISED BY BELLA ANGEL THAT THE BID FIGURE WAS $3,063,111.

MR. PALMER INSERTED THE FIGURE OF $3,063,111 IN THE BID AND OBTAINED A CHECK FOR THE ADDITIONAL AMOUNT NECESSARY FOR THE BID DEPOSIT. THE OTHER MEMBER OF THE GROUP WHO WAS ADVISED BY BELLA ANGEL OF THE FINAL BID FIGURE ALSO ARRANGED TO HAVE AN ADDITIONAL SUM TELEPHONED TO THE PUBLIC HOUSING ADMINISTRATION TO BE GIVEN TO MR. PALMER TO BE USED AS ADDITIONAL BID DEPOSIT.

DR. ELIAS ARRIVED AT THE PROJECT AND AFTER LOOKING THINGS OVER AND WITHOUT CONTACTING ANY OF THE OFFICIALS AT THE PROJECT, DECIDED THAT THE FIGURE OF $2,663.111 ARRIVED AT THE PREVIOUS NIGHT WAS SATISFACTORY AND, BELIEVING THAT SUCH FIGURE HAD BEEN COMMUNICATED TO MR. PALMER, DID NOT CALL HIM AND RETURNED HOME TO LONG ISLAND. AFTER THE BID OPENING, MR. PALMER TELEPHONED MRS. ELMA ELIAS AND GAVE HER THE AMOUNT HE HAD BID AND THE AMOUNTS OF THE OTHER BIDS. UPON DR. ELIAS' ARRIVAL HOME HE WAS ADVISED AS TO THE RESULTS OF THE BIDS AND LEARNED THAT HIS MOTHER HAD GIVEN A WRONG FIGURE OVER THE TELEPHONE. THEREAFTER, DR. ELIAS ADVISED OTHER MEMBERS OF THE GROUP WHAT HAD HAPPENED AND ARRANGEMENTS WERE MADE WITH ATTORNEYS TO EFFECT CORRECTION OF THE ALLEGED ERRONEOUS BID.

AS STATED IN YOUR MEMORANDUM, THE ESTABLISHED RULE IS THAT IN ORDER TO ALLOW THE CORRECTION OR WITHDRAWAL OF A BID AFTER THE BID OPENING, ON THE BASIS OF A MISTAKE THE EVIDENCE OF THE MISTAKE MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE WAS MADE, THAT IS, THERE MUST BE PRESENTED IMMEDIATELY SUCH CONVINCING PROOF OF THE EXISTENCE AND CHARACTER OF THE ERROR AS TO LEAVE NO ROOM FOR DOUBT THAT THERE WAS A BONA FIDE MISTAKE IN THE BID AND TO REMOVE ANY REASONABLE SUSPICION THAT THE CLAIM OF ERROR WAS FOR THE PURPOSE OF OBTAINING SOME UNDUE ADVANTAGE OR AVOIDING THE CONSEQUENCE OF AN ILL-ADVISED BID. SEE 16 COMP. GEN. 565.

THE EVIDENCE SUBMITTED IN THIS CASE CONSISTS SOLELY OF THE WORKSHEETS ALLEGED TO HAVE BEEN PREPARED BY DR. ELIAS AND TO REPRESENT HIS DETERMINATION OF THE AMOUNT WHICH HE INTENDED TO CONVEY TO OTHER MEMBERS OF THE GROUP TO BID, AND AFFIDAVITS BY VARIOUS MEMBERS OF THE GROUP OR THEIR IMMEDIATE FAMILIES. ALL STATEMENTS MADE THEREIN ARE SELF-SERVING AND ARE NOT SUPPORTED BY ANY OTHER EVIDENCE.

THE AMOUNT OF THE BID SUBMITTED WAS NOT MUCH IN EXCESS OF THE AMOUNT DECIDED UPON BY THE GROUP AT THE MEETING OF MAY 21, AS THE POSSIBLE AMOUNT TO BID. THREE MEMBERS OF THE GROUP WHO WERE PRESENT AT THE MEETING OF MAY 21, LEARNED OF THE PRICE GIVEN BY BELLA ANGEL AND NONE OF THEM WERE SUFFICIENTLY SURPRISED TO CHECK BACK WITH HER OR WITH MRS. ELMA ELIAS AFTER HER RETURN FROM THE DENTIST AT ABOUT NOON. RATHER, THEY ACCEPTED THE FIGURE GIVEN BY BELLA ANGEL AND PROCEEDED TO OBTAIN THE ADDITIONAL AMOUNT REQUIRED FOR THE BID DEPOSIT.

IT IS INCREDIBLE THAT A TRANSACTION INVOLVING THIS AMOUNT OF MONEY WOULD BE CONDUCTED IN SUCH A HAPHAZARD MANNER BY PERSONS WITH LONG AND EXTENSIVE EXPERIENCE IN THE FIELD. THERE ARE MANY FIGURES ON THE FOURTH PAGE OF THE WORKSHEETS AND IT WOULD APPEAR ONLY REASONABLE TO BELIEVE THAT WHEN DR. ELIAS SHOWED HIS WIFE. IN THE PRESENCE OF HIS MOTHER, THE FIGURE TO BE CONVEYED THAT HE MENTIONED THE FIGURE ITSELF IN ORDER THAT THERE WOULD BE NO MISUNDERSTANDING. ALSO, IF THERE WERE ANY DOUBT IN MRS. ELIAS' MIND AS TO THE ABILITY OF THE MOTHER TO CONVEY THE CORRECT FIGURE SHE WOULD HAVE MADE CERTAIN THAT THE MOTHER UNDERSTOOD THE FIGURE TO BE GIVEN BEFORE SHE LEFT FOR THE DENTIST OR WOULD HAVE ASCERTAINED THE FIGURE THE MOTHER GAVE TO MR. PALMER AND OTHERS AFTER SHE RETURNED FROM THE DENTIST.

ALTHOUGH IT WOULD APPEAR FROM THE FIGURES ON THE WORKSHEETS SUBMITTED THAT A FINAL FIGURE OF $2,663,111 WAS ARRIVED AT, THERE MAY WELL HAVE BEEN OTHER WORKSHEETS ARRIVING AT DIFFERENT FIGURES OR ASSUMING THAT THIS WAS THE ONLY WORKSHEET, THAT SOME OTHER FACTORS WERE NOT CONSIDERED AND IT WAS DECIDED THAT THE FIGURE SHOWN SHOULD BE INCREASED BY $400,000.

UNDER THE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE EVIDENCE SUBMITTED DOES NOT ESTABLISH CONCLUSIVELY THAT THE BID SUBMITTED WAS OTHER THAN INTENDED. ACCORDINGLY, REGARDLESS OF THE QUESTION AS TO WHETHER THE ERROR WAS ALLEGED PRIOR OR SUBSEQUENT TO THE EFFECTIVE ACCEPTANCE OF THE BID, THE CIRCUMSTANCES ARE NOT SUCH AS WOULD PERMIT THE CORRECTION OR WITHDRAWAL OF THE BID.