B-133455, AUG. 29, 1957

B-133455: Aug 29, 1957

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO LETTER DATED AUGUST 14. MAIL BIDS WERE TO REACH THE SALVAGE BRANCH OFFICE. BIDS OTHER THAN MAIL BIDS WERE TO BE RECEIVED THERE UNTIL 9:00 AM JANUARY 16. THEREAFTER TO THE TIME THE HIGH BID FOR THE ITEM WAS ANNOUNCED IN BUILDING NO. BIDS WERE TO BE SUBMITTED ON SPOT BID CARD. CAUTIONED BIDDERS TO INSPECT THE PROPERTY PRIOR TO SUBMITTING THEIR BIDS AS THE PROPERTY WAS BEING SOLD "AS IS". - "WHERE IS.'. NO BID DEPOSIT WAS REQUIRED FOR THIS SALE. IT WAS FURTHER PROVIDED THAT A PERIOD OF 20 CALENDAR DAYS FROM THE DATE OF THE NOTICE OF AWARD WAS ALLOWED FOR REMOVAL OF PROPERTY. PAYMENT THEREFOR WAS REQUIRED IN FULL PRIOR TO REMOVAL. EXCEPT WHEN AN EXTENSION WAS GRANTED IN WRITING BY THE CONTRACTING OFFICER.

B-133455, AUG. 29, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED AUGUST 14, 1957, WITH ENCLOSURES, FROM ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), SUBMITTING FOR CONSIDERATION A REQUEST BY MASONRY EQUIPMENT AND SUPPLY COMPANY, INC., 13 DELTA PLACE, N.E., ATLANTA, GEORGIA, FOR RESCISSION OF CONTRACT OI NO. 3181 ON THE GROUNDS OF AN ALLEGED MISTAKE IN THEIR BID, AND REQUESTING A DECISION IN THE MATTER.

INVITATION NO. 09-030-S-57-9, DATED DECEMBER 26, 1956, INVITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 177 ITEMS OF SURPLUS PROPERTY AT A SPOT BID SALE TO BE HELD AT THE SALVAGE BRANCH, ATLANTA GENERAL DEPOT, UNITED STATES ARMY, FOREST PARK, GEORGIA--- BIDS TO BE OPENED AT 10:00 AM EST, JANUARY 16, 1957, IN BUILDING NO. S-841. MAIL BIDS WERE TO REACH THE SALVAGE BRANCH OFFICE, BUILDING NO. 305-B, PRIOR TO 10:00 AM ON JANUARY 15, AND BIDS OTHER THAN MAIL BIDS WERE TO BE RECEIVED THERE UNTIL 9:00 AM JANUARY 16, AND THEREAFTER TO THE TIME THE HIGH BID FOR THE ITEM WAS ANNOUNCED IN BUILDING NO. S-841. BIDS WERE TO BE SUBMITTED ON SPOT BID CARD, GDAT FORM 538, IN THE UNIT SPECIFIED IN THE UNIT-OF-MEASURE COLUMN FOR THE DESIGNATED ITEM LISTED IN THE INVITATION. THE INVITATION AND INSTRUCTIONS TO BIDDERS CONTAINED THE USUAL DISCLAIMER OF WARRANTIES PROVISIONS, AND CAUTIONED BIDDERS TO INSPECT THE PROPERTY PRIOR TO SUBMITTING THEIR BIDS AS THE PROPERTY WAS BEING SOLD "AS IS"--- "WHERE IS.' NO BID DEPOSIT WAS REQUIRED FOR THIS SALE, BUT AT THE DISCRETION OF THE CONTRACTING OFFICER THE GOVERNMENT COULD REQUIRE A BID GUARANTEE IN THE FORM OF A 20 PERCENT DEPOSIT ON SUCCESSFUL BIDDERS WHO HAD PARTICIPATED ON PREVIOUS SALES WHEREIN NEGLIGENT ACTION RESULTED IN THEIR FAILURE TO COMPLY WITH THE GENERAL SALE TERMS AND CONDITIONS OF THE SALE. IT WAS FURTHER PROVIDED THAT A PERIOD OF 20 CALENDAR DAYS FROM THE DATE OF THE NOTICE OF AWARD WAS ALLOWED FOR REMOVAL OF PROPERTY, AND PAYMENT THEREFOR WAS REQUIRED IN FULL PRIOR TO REMOVAL. ALSO, PARAGRAPH NO. 20 OF THE SPECIAL CONDITIONS EMBODIED IN THE INVITATION PROVIDED THAT UNDER THE PROVISIONS OF GENERAL SALE TERMS AND CONDITIONS, CONDITION 7, PAGE 2 OF THE CONTRACT, A STORAGE CHARGE COULD BE INVOKED FOR ALL PROPERTY NOT REMOVED WITHIN THE FREE STORAGE PERIOD, EXCEPT WHEN AN EXTENSION WAS GRANTED IN WRITING BY THE CONTRACTING OFFICER.

IN RESPONSE TO THE INVITATION, MASONRY EQUIPMENT AND SUPPLY COMPANY SUBMITTED A BID ON A SPOT BID CARD, DATED JANUARY 16, 1957, IN THE AMOUNT OF $426 ON ITEM NO. 73 FOR THE PURCHASE OF ONE ,GENERATOR SET, ELECTRIC PORTABLE SKID MTD, 120/208, 240/416 VOLT, 60 CYCLE 30 KV, INTERNATIONAL FREMONT, SER NO. 424-E-52.' THIS GENERATOR SET ALSO WAS DESCRIBED AS WEIGHING 3,500 POUNDS AND AS IN GOOD CONDITION. ITS ESTIMATED ACQUISITION COST WAS STATED TO BE $4,274.00 (C). NINE OTHER BIDS WERE RECEIVED ON ITEM NO. 73, RANGING FROM $18.21 TO $270.00. MASONRY EQUIPMENT AND SUPPLY COMPANY'S BID OF $46 WAS READ AS THE HIGH BID ON ITEM NO. 73 AND AWARD WAS MADE ACCORDINGLY. THE COMPANY WAS NOTIFIED OF THIS ACTION BY NOTICE OF AWARD AND SALES DOCUMENT OI NO. 3181, DATED JANUARY 24, 1957.

THE RECORD SHOWS THAT THE COMPANY DID NOT REMOVE THE PROPERTY WITHIN THE FREE STORAGE PERIOD AND THAT THEY DID NOT REQUEST AN EXTENSION OF TIME. THEREFORE, IN ACCORDANCE WITH THE TERMS OF THE CONTRACT THE COMPANY WAS NOTIFIED BY THE CONTRACTING OFFICER IN LETTER OF FEBRUARY 18, 1957, THAT STORAGE CHARGES WERE BEING INVOKED. IN REPLY BY LETTER DATED FEBRUARY 19, 1957, TO THE PROPERTY DISPOSAL OFFICER, THE COMPANY CLAIMED THAT THEY HAD MADE AN ERROR IN MARKING "ITEM NO. 73" ON THE BID CARD AS THEY HAD INTENDED TO BID ON "ITEM NO. 75" DESCRIBED IN THE INVITATION AS ONE "GENERATOR SET, PORTABLE, GASOLINE DRIVEN SKID MTD 60 KW 120/208 VOLTS 240/416 VOLTS 3 PHASE 60 CYCLE STEWART STEVENSON MODEL 132045 SER NO. 13204-2," ON WHICH THE ESTIMATED ACQUISITION COST WAS STATED TO BE $5,793.00 (C), THE WEIGHT WAS GIVEN AS 3,000 POUNDS AND ITS CONDITION GOOD, AND THE SUCCESSFUL BID WAS $889.90. AS AN APPARENT EXCUSE FOR MAKING THE ALLEGED ERROR, THE CONTRACTOR STATED THAT ON THE DAY MEMBERS OF THEIR FIRM VISITED THE SALVAGE YARD PRIOR TO BIDDING IT WAS RAINING, WINDY AND COLD. IN THEIR LETTER ASSERTING ERROR IN THEIR BID THE CONTRACTOR FURTHER STATED THAT AFTER THEY WERE ADVISED THAT THEIR BID WAS HIGH THEY VISITED THE SALVAGE YARD AND FOUND THAT "THIS PIECE OF EQUIPMENT IS COMPLETE JUNK. IN FACT, ITS APPEARANCE IS SUCH THAT IT WOULD APPEAR THAT IT HAD BEEN BROKEN ON PURPOSE," AND THAT THEY "COULD NOT PAY $426 FOR JUNK THAT WOULD NOT HAVE ANY REASONABLE SALVAGE VALUE.'

THE CONTRACTING OFFICER STATES THAT HE BELIEVES THE STATEMENT OF THE COMPANY TO BE CORRECT AS TO THE WEATHER CONDITIONS ON THE DAY OF THEIR INSPECTION AS THE WEATHER WAS INCLEMENT ON SEVERAL DAYS OF THE INSPECTION PERIOD. HE ALSO STATES THAT NO PAYMENT HAS BEEN RECEIVED FROM THE COMPANY FOR THE PROPERTY WHICH IS STILL IN THE CUSTODY OF THE PROPERTY DISPOSAL OFFICER, THAT THE CONTRACTOR DID NOT INDICATE TO HIM THAT AN ERROR HAD BEEN MADE UNTIL AFTER THE FREE STORAGE PERIOD HAD EXPIRED, AND THAT IT IS HIS OPINION THAT THE EVIDENCE DOES NOT PROVE THE EXISTENCE OF A MISTAKE. HE RECOMMENDS AGAINST FAVORABLE CONSIDERATION OF THE CONTRACTOR'S REQUEST TO BE RELIEVED OF THE RESPONSIBILITY OF TAKING THE PROPERTY IN ITEM NO. 73 SOLD TO THEM UNDER THE CONTRACT.

THE BASIC QUESTION IN THIS CASE IS NOT WHETHER THE COMPANY MADE A MISTAKE IN ENTERING THEIR BID ON ITEM NO. 73 ON THE BID CARD, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE COMPANY'S BID THEREON. IT IS WELL ESTABLISHED THAT THE ACCEPTANCE OF A BID CONSUMMATES A VALID AND BINDING CONTRACT UNLESS THE OFFICER ACCEPTING IT WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE 28 COMP. GEN. 550, 551.

MASONRY EQUIPMENT AND SUPPLY COMPANY DID NOT ALLEGE ERROR IN THEIR BID UNTIL AFTER AWARD TO THEM OF THE CONTRACT. THERE WAS NOTHING ON THE FACE OF THEIR BID TO INDICATE THAT THE $426 PRICE QUOTATION ON ITEM NO. 73 WAS NOT INTENDED FOR THAT ITEM. THE PROPERTY WAS SOLD "AS IS" AND ,WHERE IS" AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. THE COMPANY'S BID OF $426 DOES NOT APPEAR OUT OF LINE WITH THE NINE OTHER BIDS RECEIVED ON ITEM NO. 73 CONSIDERING THE ESTIMATED ACQUISITION COST OF $4,274. THE COMPANY ADMITS THAT THE ALLEGED ERROR WAS THEIR ERROR AND THEY DO NOT IMPUTE ANY RESPONSIBILITY THEREFOR TO THE CONTRACTING OFFICER OR OTHER GOVERNMENT OFFICIAL.

SINCE, UNDER THESE CIRCUMSTANCES, IT DOES NOT APPEAR THAT THE 50 PERCENT OF HIS AVERAGE MONTHLY LIVING EXPENSES, THE PARENT MAY NOT INTENDED AS SHOWN OR THAT HE HAD ANY INFORMATION TO PUT HIM ON NOTICE OF ANY PROBABILITY OF ERROR, IT MUST BE CONCLUDED THAT THE CONTRACTING OFFICER ACCEPTED THE COMPANY'S BID ON ITEM NO. 73 IN GOOD FAITH AND WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ERROR, AND SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE RESPONSIBILITY FOR PREPARING THE BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. ANY ERROR THAT MAY HAVE BEEN MADE IN THIS CASE WAS DUE SOLELY TO THE BIDDER'S OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR WAS UNILATERAL--- NOT MUTUAL--- AND WOULD NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

IN VIEW OF THE ABOVE, WE ARE UNABLE TO FIND ANY LEGAL BASIS FOR RELIEVING MASONRY EQUIPMENT AND SUPPLY COMPANY FROM ITS OBLIGATIONS UNDER CONTRACT OI NO. 3181.

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