B-134336, JAN. 28, 1958

B-134336: Jan 28, 1958

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED NOVEMBER 5. N62583S -13230 WAS AWARDED. WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $1. WAS ACCEPTED AS TO ITEM 31 AND OTHER ITEMS. THE BID OF F AND M SALVAGE ON ITEM 31 WAS IN THE AMOUNT OF $52 EACH AND THE SEVEN OTHER BIDS ON THAT ITEM WERE IN AMOUNTS RANGING FROM $14.39 EACH TO $3 EACH. THE CONTRACTING OFFICER STATED THAT A THOROUGH INVESTIGATION OF THE CONDITION AND USEFULNESS OF THE MATERIAL UNDER ITEM 31 REVEALED THAT SOME RAILS COULD BE USED AS TRACKAGE BUT THAT IT WAS DOUBTFUL WHETHER THE TOTAL QUANTITY WAS USABLE. IT WAS HIS OPINION THAT THE AMOUNT OF $572 QUOTED BY THE COMPANY FOR ITEM 31 WAS EXCESSIVE IN AN AMOUNT SUFFICIENT TO INDICATE THAT A MISTAKE WAS MADE BY THE COMPANY.

B-134336, JAN. 28, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 5, 1957, WITH ENCLOSURES, FILE REFERENCE R11.2 L8/L8/NC7, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH F AND M SALVAGE, LONG BEACH, CALIFORNIA, ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT NO. N62583S -13230 WAS AWARDED.

THE U.S. NAVAL CONSTRUCTION BATTALION CENTER, PORT HUENEME, CALIFORNIA, BY INVITATION NO. B-8-58-62583, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS SURPLUS MATERIALS DESCRIBED UNDER ITEMS 1 TO 50, INCLUSIVE. IN RESPONSE F AND M SALVAGE SUBMITTED A BID DATED SEPTEMBER 5, 1957, IN PART AS FOLLOWS:

TABLE

DESCRIPTION QUANTITY TOTAL "ITEM AND LOCATION (NUMBER

UNIT OF PRICE BID PRICE BID

NO. OF PROPERTY OF UNITS) MEASURE PER UNIT DOLLARS CENTS

31. RAILS: TEE, 11 EACH

Y RAILWAY, MFR. $52.00 $ 572 00

APA N.A., 70 LBS. AS PRICE PER: EACH TOTAL

SURP. LISTED:

1 EA. RAIL - 15 FT. LONG F AND M SALVAGE

7 EA. RAIL - 33 FT. LONG

1 EA. RAIL - 29 FT. 10 IN. LONG

1 EA. RAIL - 31 FT. LONG

1 EA. RAIL - 30 FT. LONG

(0279411-L)

ACQUISITION COST: $705.00

USED - GOOD"

THE BID OF THE COMPANY, WHICH WAS ACCOMPANIED BY A BID GUARANTEE IN THE AMOUNT OF $1,320, WAS ACCEPTED AS TO ITEM 31 AND OTHER ITEMS, ON SEPTEMBER 10, 1957. ON SEPTEMBER 20, 1957, A REPRESENTATIVE OF F AND M SALVAGE ACCEPTED DELIVERY OF THE MATERIAL COVERED BY ITEM 31.

IN A LETTER DATED SEPTEMBER 25, 1957, THE COMPANY ADVISED THAT ITS BOOKKEEPER HAD ERRONEOUSLY COMPUTED ITS BID PRICE FOR ITEM 31 ON THE WEIGHT BASIS OF SEVENTY POUNDS PER FOOT INSTEAD OF SEVENTY POUNDS PER YARD OF RAIL, AND IT REQUESTED THAT THE CONTRACT PRICE OF THE RAILS BE ADJUSTED TO COMPENSATE IT FOR ITS ERROR. BY LETTER DATED OCTOBER 14, 1957, THE COMPANY REQUESTED THAT THE CONTRACT PRICE OF THE RAILS BE CORRECTED TO REFLECT ITS ALLEGED INTENDED TOTAL BID PRICE OF $190.51 AND IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS ORIGINAL ESTIMATE SHEET WHICH INDICATES THAT IT COMPUTED ITS BID PRICE FOR ITEM 31 ON THE WEIGHT BASIS OF SEVENTY POUNDS PER FOOT OF RAIL.

THE BID OF F AND M SALVAGE ON ITEM 31 WAS IN THE AMOUNT OF $52 EACH AND THE SEVEN OTHER BIDS ON THAT ITEM WERE IN AMOUNTS RANGING FROM $14.39 EACH TO $3 EACH. ORDINARILY, A MERE DIFFERENCE IN THE PRICES QUOTED FOR THE SALE OF SURPLUS MATERIAL OR SALVAGE PROPERTY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; 28 ID. 261; ID. 550. HOWEVER, IN A SUPPLEMENTAL REPORT DATED JANUARY 9, 1958, IN WHICH HE RECOMMENDED THAT THERE BE REFUNDED TO THE COMPANY THE SUM OF $381.49--- THE DIFFERENCE BETWEEN THE COMPANY'S ORIGINAL TOTAL BID PRICE AND ITS INTENDED TOTAL BID PRICE, THE CONTRACTING OFFICER STATED THAT A THOROUGH INVESTIGATION OF THE CONDITION AND USEFULNESS OF THE MATERIAL UNDER ITEM 31 REVEALED THAT SOME RAILS COULD BE USED AS TRACKAGE BUT THAT IT WAS DOUBTFUL WHETHER THE TOTAL QUANTITY WAS USABLE; AND THAT AFTER A CAREFUL RECONSIDERATION AND EVALUATION OF THE MATERIAL UNDER ITEM 31, IT WAS HIS OPINION THAT THE AMOUNT OF $572 QUOTED BY THE COMPANY FOR ITEM 31 WAS EXCESSIVE IN AN AMOUNT SUFFICIENT TO INDICATE THAT A MISTAKE WAS MADE BY THE COMPANY. THE CONTRACTING OFFICER ALSO STATED THAT IT WAS HIS OPINION THAT THE DESCRIPTION OF ITEM 31 IN THE INVITATION WAS NOT TOO CLEAR IN THAT IT LISTS "70 LBS.' WITHOUT IDENTIFYING THE UNIT TO WHICH SUCH AMOUNT WAS TO BE APPLICABLE. THE CONTRACTING OFFICER IMPLIEDLY ADMITS THAT THE LISTED WEIGHT OF 70 POUNDS WAS THE WEIGHT OF ONE YARD OF RAIL ALTHOUGH THE ONLY UNIT OF MEASUREMENT USED IN THE DESCRIPTION OF THE RAILS WAS ON THE BASIS OF FEET. WE ARE OF THE OPINION THAT THE GOVERNMENT CONTRIBUTED TO THE MISTAKE MADE BY F AND M SALVAGE IN FAILING TO SPECIFY THE UNIT TO WHICH "70 LBS.' WAS TO BE APPLICABLE. ALSO, CONSIDERING THE CIRCUMSTANCES, INCLUDING THE FACT THAT MOST OF THE MATERIAL COVERED BY ITEM 31 APPEARS TO HAVE ONLY SCRAP VALUE, AND THAT THE AMOUNT QUOTED THEREON BY F AND M SALVAGE WAS MORE THAN THREE TIMES THE AMOUNT OF THE NEXT HIGHEST BID RECEIVED ON THAT ITEM AND MORE THAN 81 PERCENT OF ITS ORIGINAL ACQUISITION COST, WE ARE OF THE OPINION THAT RELIEF PROPERLY MAY BE GRANTED TO THE COMPANY. ACCORDINGLY, A REFUND OF THE AMOUNT OF $381.49 IS AUTHORIZED TO BE MADE TO F AND M SALVAGE, AS ADMINISTRATIVELY RECOMMENDED.