B-134684, JAN. 2, 1958

B-134684: Jan 2, 1958

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED DECEMBER 16. ALLEGES HE MADE IN HIS BID ON WHICH SALES CONTRACT N61481S-1170 (SN-1218) IS BASED. IT IS BEING RENDERED TO YOU. WAS AWARDED TO ED SCHNEIDER AT THE BID PRICE OF $110. UPON A SUBSEQUENT EXAMINATION HE FOUND THAT ALL THE EQUIPMENT LISTED AS MISCELLANEOUS BAND TOOLS IN THE SALES LETTER WAS NOT INCLUDED IN THE LOT. THE CONTRACTING OFFICER HAS REPORTED THAT AN INVESTIGATION REVEALED THAT ALL THE LISTED ITEMS WERE ACTUALLY IN THE LOT. WHEN THIS WAS POINTED OUT TO MR. HE THEN CLAIMED THAT HE THOUGHT ALL THE MATERIAL WAS UNUSED. WHEN HE WAS SHOWN THAT THE SALES LETTER STATED SPECIFICALLY THAT THE MATERIAL WAS USED AND UNUSED.

B-134684, JAN. 2, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED DECEMBER 16, 1957, REFERENCE FR 10 (MK:RW) L6 (S), WITH ENCLOSURES, FROM THE SUPERVISOR, ACCOUNTS RECEIVABLE AND CLAIMS DIVISION, U.S. NAVY REGIONAL ACCOUNTS OFFICE, WASHINGTON, D.C., WHO REQUESTS A DECISION REGARDING AN ERROR ED SCHNEIDER, PORTLAND, OREGON, ALLEGES HE MADE IN HIS BID ON WHICH SALES CONTRACT N61481S-1170 (SN-1218) IS BASED.

SINCE THE CLAIM INVOLVES A DECISION AS TO WHETHER THE CONTRACT MAY BE CANCELED, IT IS BEING RENDERED TO YOU. SEE 26 COMP. GEN. 993.

SITE SALES LETTER NO. S61-9-58 APA AND NSA COVERED THE SALE OF MISCELLANEOUS USED AND UNUSED MATERIAL. ON NOVEMBER 7, 1957, ITEM 3, MISCELLANEOUS HAND TOOLS, LISTED IN FULL ON PAGE ONE OF THE SALES LETTER, WAS AWARDED TO ED SCHNEIDER AT THE BID PRICE OF $110. THE ABSTRACT OF BIDS SHOWS THAT THE OTHER TWELVE BIDS RANGED FROM $16.10 TO $53.

BY LETTER DATED NOVEMBER 13, 1957, MR. SCHNEIDER STATED THAT HE HAD NOT INSPECTED THE PROPERTY PRIOR TO SUBMITTING A BID, BUT UPON A SUBSEQUENT EXAMINATION HE FOUND THAT ALL THE EQUIPMENT LISTED AS MISCELLANEOUS BAND TOOLS IN THE SALES LETTER WAS NOT INCLUDED IN THE LOT. THE CONTRACTING OFFICER HAS REPORTED THAT AN INVESTIGATION REVEALED THAT ALL THE LISTED ITEMS WERE ACTUALLY IN THE LOT. WHEN THIS WAS POINTED OUT TO MR. SCHNEIDER, HE THEN CLAIMED THAT HE THOUGHT ALL THE MATERIAL WAS UNUSED. WHEN HE WAS SHOWN THAT THE SALES LETTER STATED SPECIFICALLY THAT THE MATERIAL WAS USED AND UNUSED, HE ADMITTED THAT HE WAS AT FAULT BECAUSE HE HAD BID WITHOUT INSPECTING ITEM 3.

THE MERE STATEMENT, WITHOUT ANYTHING ELSE, THAT A BIDDER IS INEXPERIENCED AND HAS NOT READ THE TERMS AND CONDITIONS OF THE SALE IS NOT SUFFICIENT TO CANCEL A CONTRACT.

THE SALES TERMS AND CONDITIONS PROVIDE THAT THE PROPERTY LISTED IS OFFERED FOR SALE "AS IS" AND "WHERE IS" AND THAT FAILURE TO INSPECT THE PROPERTY WOULD NEVER CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING. THE LAW IS CLEAR THAT A BIDDER WHO FAILS TO TAKE ADVANTAGE OF AN OPPORTUNITY TO INSPECT IS PRECLUDED BY THE SALE TERMS AND CONDITIONS FROM RECOVERING FOR THE DEFICIENCIES WHICH AN INSPECTION WOULD HAVE READILY DISCLOSED. SEE 4 COMP. GEN. 286; 18 ID. 594; 28 ID. 306; SACHS MERCANTILE COMPANY, INC. V. UNITED STATES, 78 C.CLS. 801; BRODY V. UNITED STATES, 64 ID. 538.

ALTHOUGH THERE IS A WIDE VARIANCE BETWEEN THE BID OF ED SCHNEIDER AND THE OTHER BIDDERS, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO WARRANT THE CONCLUSION THAT THE CONTRACTING OFFICER WAS PLACED ON NOTICE OF THE PROBABILITY OF ERROR IN HIS BID AND THAT HE SHOULD HAVE REQUESTED MR. SCHNEIDER TO VERIFY HIS BID. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON SALVAGE, WASTE AND SURPLUS PROPERTY, A MERE PRICE DIFFERENCE WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AS WOULD SIMILAR PRICE DIFFERENCES ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683, 689, CITING 16 COMP. GEN. 596; 17 ID. 388; AND ID. 601. THUS, SINCE NO ERROR WAS ALLEGED UNTIL AFTER AWARD, THE ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH AND 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.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE APPEARS NO LEGAL BASIS TO RELEASE ED SCHNEIDER FROM HIS OBLIGATION UNDER THE TERMS OF THE CONTRACT.