B-132823, SEP. 25, 1957

B-132823, SEP. 25, 1957

TO SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED JULY 31, 1957, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF OF PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, SUBMITTING FOR CONSIDERATION AND DECISION THE MATTER OF A MISTAKE IN BID ALLEGED BY KALCO SUPPLY COMPANY, DENVER, COLORADO, IN CONNECTION WITH CONTRACT NO. N60136S-3087.

BY INVITATION NO. S-5-57, DATED APRIL 23, 1957, THE NAVAL AMMUNITION DEPOT, HASTINGS, NEBRASKA, REQUESTED BIDS FOR THE PURCHASE AND REMOVAL OF VARIOUS ITEMS OF MISCELLANEOUS USABLE SURPLUS GOVERNMENT PROPERTY, INCLUDING ITEM NO. 43 CONSISTING OF ONE AIR HOSE 25 FEET CONDITION FAIR, TWO EACH BATTERY CABLE 14 INCHES CONDITION NEW, ONE CREEPER CONDITION USED, TWO EACH WATER PUMP, MFG. NA CONDITION POOR, AND STRAP, PIPE HANGER, APPROX. 60 FEET CONDITION FAIR, WITH A TOTAL ESTIMATED ACQUISITION COST OF $140. IN RESPONSE, KALCO SUPPLY COMPANY SUBMITTED A BID OF $173.73 FOR THE LOT OF MATERIAL COVERED BY ITEM NO. 43. THE BID OF THE COMPANY WAS ACCEPTED ON MAY 25, 1957, AS TO SEVERAL ITEMS, INCLUDING ITEM NO. 43.

UPON RECEIPT OF THE SALES CONTRACT, KALCO SUPPLY COMPANY ADVISED THE HASTINGS, NEBRASKA, NAVAL AMMUNITION DEPOT, BY TELEPHONE, THAT THEY HAD NOT SUBMITTED A BID ON ITEM NO. 43 AND THAT THEY HAD NO INTENTION OF BIDDING ON THIS ITEM, STATING THAT IT WAS THEIR IMPRESSION THAT THEY WERE PLACING BIDS ON ITEMS NOS. 44 AND 45. IN LETTER OF MAY 27, 1957, REFERRING TO THEIR TELEPHONE CONVERSATION, THE COMPANY STATED THAT APPARENTLY THERE WAS AN ERROR ON THEIR PART IN PLACING THE BID AMOUNT OF $173.73 OPPOSITE ITEM NO. 43 AS THEY HAD WISHED TO BID ON ONLY THE CONVEYOR ITEMS NOS. 44 AND 45, AND BASED THEIR CONTENTION OF ERROR ON THE POINT THAT THEY WOULD NOT HAVE BID A FIGURE OF $173.73 ON A LOT OF MATERIAL WITH AN ESTIMATED ACQUISITION COST OF $140. IN SUPPORT OF THEIR ALLEGATION OF ERROR, THE COMPANY SUBMITTED A PENNED MEMORANDUM WITH REFERENCE TO THEIR BID IN WHICH THE AMOUNT OF $173.73 APPEARS OPPOSITE "ITEM NO. 44.'

THE ABSTRACT OF BIDS SHOWS THAT FOUR OTHER BIDS WERE RECEIVED ON ITEM NO. 43, RANGING FROM $1 TO $5. BIDS RECORDED ON ITEM NO. 44 RANGED FROM $41 TO $127. IT IS REPORTED THAT THE PROPERTY IS STILL IN THE POSSESSION OF THE GOVERNMENT, AND THAT FULL PAYMENT THEREFOR HAS NOT BEEN MADE BY THE CONTRACTOR.

IN VIEW OF THE SUBSTANTIAL DIFFERENCE BETWEEN THE COMPANY'S BID OF $173.73 AND THE OTHER BIDS ON ITEM NO. 43, AND SINCE THE AMOUNT OF THE BID WAS GREATLY IN EXCESS OF THE ESTIMATED TOTAL ACQUISITION COST OF ITEM NO. 43, THE POSSIBILITY OF ERROR WAS APPARENT AND, IN THE CIRCUMSTANCES, THE BID OF KALCO SUPPLY COMPANY AS TO ITEM NO. 43 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT VERIFICATION.

ACCORDINGLY, SINCE THE ERROR WAS ALLEGED PROMPTLY UPON RECEIPT OF AWARD AND SINCE IT IS REPORTED THAT THE PROPERTY IS STILL IN THE POSSESSION OF THE GOVERNMENT, THE KALCO SUPPLY COMPANY MAY BE RELEASED FROM ITS OBLIGATIONS UNDER CONTRACT NO. N60136S-3087 AS TO ITEM NO. 43, AS RECOMMENDED BY THE CONTRACTING OFFICER.

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