B-133732, SEP. 18, 1957

B-133732, SEP. 18, 1957

TO SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED SEPTEMBER 10, 1957, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), WITH ENCLOSURES, REQUESTING OUR DECISION IN THE MATTER OF AN ALLEGED MISTAKE IN BID SUBMITTED ON MAY 14, 1957, BY S AND M SALES OF PORTLAND, OREGON, PURSUANT TO BID INVITATION NO. 41-187-S- 57-13 DATED APRIL 24, 1957, ISSUED BY THE FORT WORTH GENERAL DEPOT, UPON WHICH CONTRACT NO. DA/S/41-187-AIV-1324 WAS BASED.

BIDS WERE REQUESTED ON 80 ITEMS OF SURPLUS GOVERNMENT PROPERTY AND THE CONTRACTOR WAS AWARDED ITEM NO. 43 COVERING 75 GASOLINE ENGINES, THE ORIGINAL ACQUISITION COST OF WHICH WAS $2,625.

A REVIEW OF THE CONTRACTOR'S BID OF $11.13 EACH, OR A TOTAL OF $834.75, FOR THE 75 ENGINES DOES NOT DISCLOSE ANY APPARENT ERROR. THE PRICE AND EXTENTION THEREOF WERE CLEARLY ENTERED AND A BID DEPOSIT IN EXCESS OF THE REQUIRED 20 PERCENT WAS INCLUDED IN THE BID. ALTHOUGH THE BID PRICE QUOTED BY S AND M SALES WAS CONSIDERABLY HIGHER THAN OTHER BIDS SUBMITTED, THE PROPERTY DISPOSAL OFFICER STATED IN THIS REPORT OF JULY 3, 1957, THAT HE DID NOT, IN FACT, SUSPECT THAT A MISTAKE IN BID HAD BEEN MADE.

SUBSEQUENT TO AWARD AND PAYMENT OF TE BALANCE DUE UNDER THE CONTRACT,

SUBSEQUENT TO AWARD AND PAYMENT OF THE BALANCE DUE UNDER THE CONTRACT, THE CONTRACTOR ORALLY, AND LATER BY LETTER DATED MAY 31, 1957, REQUESTED THAT IT BE RELEASED FROM ITS CONTRACTUAL LIABILITY IN VIEW OF AN OBVIOUS ERROR IN BID. A NOTARIZED LETTER DATED JUNE 14, 1957, AND SIGNED BY DAVE SALTMAN, PARTNER, S AND M SALES, ALLEGED THAT AN INSPECTION OF THE ENGINES WAS REQUESTED OF AN ACQUAINTANCE IN FORT WORTH; THAT IN ANTICIPATION OF HIS DEPARTURE FOR ALASKA, A BID WAS PREPARED, TOGETHER WITH A CERTIFIED CHECK COVERING THE BID DEPOSIT, FOR SUBMISSION IN THE EVENT THE INSPECTION REPORT WAS SATISFACTORY; AND THAT THIS BID WAS INADVERTENTLY MAILED EVEN THOUGH AN INSPECTION REPORT WAS NEVER RECEIVED. IT WAS FURTHER ALLEGED THAT AWARD WAS MADE IN MR. SALTMAN'S ABSENCE AND THAT HIS PARTNER, MR. MILLER, BEING UNAWARE OF THE CIRCUMSTANCES, FORWARDED FINAL PAYMENT UNDER THE CONTRACT AND SHIPPING INSTRUCTIONS IN ORDER TO AVOID DELINQUENCY.

THE BASIC QUESTION FOR DETERMINATION HERE IS WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY ACCEPTANCE OF THE BID. THE BID AS SUBMITTED WAS CLEAR AND UNAMBIGUOUS AND WAS UNQUESTIONABLY ACCEPTED IN GOOD FAITH. THE PROPERTY DISPOSAL OFFICER HAD NO REASON TO QUESTION THE CORRECTNESS OF THE BID, NOR DID HE HAVE ANY KNOWLEDGE THAT IT WAS UNINTENTIONALLY SUBMITTED. WHEN THE BID WAS ACCEPTED, IT CONSTITUTED A CONTRACT BINDING UPON THE GOVERNMENT AND S AND M SALES IN STRICT ACCORDANCE WITH ITS TERMS. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683.

FURTHERMORE, THE ACTIONS OF BOTH MR. SALTMAN AND MR. MILLER, AS PARTIES IN THE FIRM, MUST BE CONSIDERED AS LEGALLY BINDING S AND M SALES INSOFAR AS THE TERMS OF THIS CONTRACT ARE CONCERNED, NOTWITHSTANDING THAT SUCH ACTIONS MAY HAVE BEEN TAKEN WITHOUT THE KNOWLEDGE OR CONSENT OF THE OTHER. SEE 68 C.J.S., PARTNERSHIP, 137.

ACCORDINGLY, NO LEGAL BASIS EXISTS FOR REFUNDING TO S AND M SALES THE AMOUNT OF ITS BID PRICE, LESS ITS BID DEPOSIT.

THE PAPERS TRANSMITTED WITH THE LETTER OF SEPTEMBER 10, 1957, WITH THE EXCEPTION OF THE STATEMENT OF THE PROPERTY DISPOSAL OFFICER, ARE RETURNED HEREWITH.