B-135109, FEB. 26, 1958

B-135109, FEB. 26, 1958

TO THE SECRETARY OF THE NAVY:

THIS REFERS TO LETTER DATED JANUARY 31, 1958, FILE R11.2-L8/-L8/NT4 28, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION REGARDING AN ERROR ALLEGED BY ZIMM AND SONS, OAKLAND, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID WHICH FORMED THE BASIS OF SALES CONTRACT NO. N228S-21839.

IN SALES LETTER NO. SL-15-58-228, THE DISPOSAL DIVISION OF THE NAVAL SUPPLY CENTER IN OAKLAND, CALIFORNIA, OFFERED FOR SALE CERTAIN ELECTRONIC AND ELECTRICAL MATERIALS AND MISCELLANEOUS ENGINE PARTS. ONE OF THE ARTICLES OFFERED FOR SALE WAS DESCRIBED IN THE SALES LETTER AS AN "ANTENNA" AND WAS LISTED AS LOT 33. THE ORIGINAL PAPERS RECEIVED FROM THE MARINE CORPS SUPPLY FORWARDING ANNEX DESCRIBED THE "ANTENNA EQUIPMENT" AS APPARENTLY UNUSED, IN POOR TO GOOD CONDITION, IN VARIOUS TYPE CONTAINERS, ACQUISITION COST, $34,673.70.

ON DECEMBER 17, 1957, A HIGH BID OF $759.99 FOR LOT 33 WAS RECEIVED FROM ZIMM AND SONS AND AWARD WAS MADE ON DECEMBER 26, 1957. FIFTEEN OTHER BIDS WERE RECEIVED ON THIS ITEM RANGING FROM $18 TO $289.99. TWELVE OF THE FIFTEEN BIDS WERE IN EXCESS OF $100. ON JANUARY 3, 1958, MR. LOUIS ZIMMERMAN OF ZIMM AND SONS WROTE TO THE DISPOSAL OFFICER CLAIMING THAT HE HAD MADE AN ERROR IN HIS BID ON LOT 33 AND REQUESTED THAT THE BID BE CANCELED. HE STATED THAT HIS INTENDED BID WAS $359.99 INSTEAD OF $759.99 AND THAT THE ERROR HAD BEEN MADE IN COPYING THE BID FROM THE ORIGINAL WORKSHEET TO THE BID SHEET. THE CONTRACTING OFFICER INFORMED THE CONTRACTOR THAT THE BID COULD NOT BE DISREGARDED EXCEPT UPON A DETERMINATION BY THE PROPER AUTHORITIES IN WASHINGTON. IT WAS SUGGESTED THAT FURTHER EVIDENCE BE PRESENTED TO FURTHER SUBSTANTIATE THE CLAIM OF ERROR IN ORDER THAT THE REQUEST COULD BE PROCESSED TO A HIGHER LEVEL OF AUTHORITY. ON JANUARY 13, 1958, THE CONTRACTOR VERBALLY ADVISED THAT HE WISHED THE CLAIM TO BE PROCESSED ON THE BASIS OF HIS LETTER OF JANUARY 3, 1958.

ADMITTEDLY, THERE IS CONSIDERABLE VARIANCE BETWEEN THE BID OF ZIMM AND SONS AND THOSE BIDS SUBMITTED BY THE OTHER BIDDERS. A WIDE RANGE OF PRICES ORDINARILY MAY BE EXPECTED IN RESPONSE TO INVITATIONS FOR SALE OF SURPLUS PROPERTY AND THE MERE FACT THAT THE ACQUISITION COST OF $34,673.70 IS MANY TIMES MORE THAN ANY OF THE BIDS RECEIVED WOULD NOT NECESSARILY PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. 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. THUS, AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, 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. SUCH ERROR AS WAS MADE DOES NOT ENTITLE THE BIDDER TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505.

ON THE BASIS OF THE FACTS HERE PRESENTED AND THE LAW APPLICABLE TO THOSE FACTS, THERE DOES NOT APPEAR ANY LEGAL BASIS TO RELEASE ZIMM AND SONS FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT.