B-135310, MAR. 25, 1958

B-135310: Mar 25, 1958

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 21. IS BASED. ONE OF THE ITEMS WAS ITEM 3. 158 INCHES LONG 39 EA CONDITION UNUSED ACQ COST $250.00 42 EA" TEN BIDS WERE RECEIVED ON THIS ITEM WHICH RANGE FROM THE COMPANY'S HIGH BID OF $462 TO A LOW OF $4.20. THE SECOND AND THIRD HIGHEST BIDS WERE $70.14 AND $28.14. WAS FOUND TO BE THE HIGH BIDDER ON ITEMS 3 AND 43. THE AWARD OF ITEMS 3 AND 43 WAS THEREAFTER MADE TO THE COMPANY AND THE COMPANY SO NOTIFIED TO THAT EFFECT BY LETTER DATED MARCH 27. THE CONTRACTOR ADVISED THE DISPOSAL OFFICER THAT HE HAD MADE AN ERROR IN HIS BID ON ITEM 3 AND THAT HIS BID OF $11 EACH WAS FOR THE FOLLOWING: "2 PIECES 5/8 INCH CABLE 15 FT.

B-135310, MAR. 25, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 21, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WABASH TRUCK PARTS COMPANY, INC., ALLEGES IT MADE ON ITEM 3 OF ITS BID ON WHICH SALES CONTRACT NO. 20-089-57-106 (S), DATED MARCH 27, 1957, IS BASED.

BY INVITATION NO. 20-089-S-57-15, DATED FEBRUARY 25, 1957, THE DEPARTMENT OF THE ARMY, DETROIT ARSENAL, CENTER LINE, MICHIGAN, REQUESTED BIDS--- TO BE OPENED MARCH 19, 1957--- FOR THE PURCHASE OF GOVERNMENT SURPLUS PROPERTY. ONE OF THE ITEMS WAS ITEM 3, DESCRIBED AS FOLLOWS:

TABLE

"CABLE, WIRE, ROPE, TOWING AND LIFTING CONSISTING OF:

A. CABLE, TOWING WIRE ROPE, 5/8 INCH DIAM

15 FEET LONG

2 EA

B. CABLE, TOWING, WIRE ROPE, 5/8 INCH DIAM BY 60 INCHES LONG W/YOKE ONE END THIMBLE

1 EA

C. CABLE, WIRE ROPE 5/8 INCH DIAM 6 BY 19, 158 INCHES LONG

39 EA

CONDITION UNUSED

ACQ COST $250.00 42 EA"

TEN BIDS WERE RECEIVED ON THIS ITEM WHICH RANGE FROM THE COMPANY'S HIGH BID OF $462 TO A LOW OF $4.20. THE SECOND AND THIRD HIGHEST BIDS WERE $70.14 AND $28.14. AFTER RECORDING ALL BIDS ON THE ABSTRACT, THE WABASH TRUCK PARTS COMPANY, INC., WAS FOUND TO BE THE HIGH BIDDER ON ITEMS 3 AND 43. THE CONTRACTING OFFICER IN HIS STATEMENT OF MAY 1, 1957, STATED THAT SINCE THE COMPANY'S BID ON ITEM 3 APPEARED EXCESSIVE IN VIEW OF THE OTHER BIDS RECEIVED ON THIS ITEM, THE PROPERTY DISPOSAL OFFICER BEFORE AWARD OF BIDS, TELEPHONED THE HIGH BIDDER ON MARCH 21, 1957, REQUESTING A VERIFICATION OF THE BID ON ITEMS 3 AND 43. THE PERSON WHO SIGNED THE BID INVOLVED CONFIRMED THE BID PRICES ON BOTH ITEMS 3 AND 43. THE AWARD OF ITEMS 3 AND 43 WAS THEREAFTER MADE TO THE COMPANY AND THE COMPANY SO NOTIFIED TO THAT EFFECT BY LETTER DATED MARCH 27, 1957.

BY LETTER DATED APRIL 12, 1957, THE CONTRACTOR ADVISED THE DISPOSAL OFFICER THAT HE HAD MADE AN ERROR IN HIS BID ON ITEM 3 AND THAT HIS BID OF $11 EACH WAS FOR THE FOLLOWING:

"2 PIECES 5/8 INCH CABLE 15 FT. LONG

1 PIECE 5/8 INCH DO. 5 FT. LONG

39 PIECES 5/8 INCH DO. 158 FT. LONG"

ALSO, THE CONTRACTOR STATED THAT---

"NOW, SHORT LENGTHS OF CABLE ARE OF NO USE TO US AT ALL AND SINCE YOU CAN READILY SEE BY THE BID PRICE EACH THAT WE ARE BIDDING ON CABLE BY THE FOOT AND NOT BY INCHES--- AS THE REGULAR PRICE IS MUCH CHEAPER. WE HAVE BOUGHT A LOT OF CABLE IN THE PAST AND NEVER BEFORE HAS CABLE BEEN REFERRED TO IN INCHES INSTEAD OF FEET. WHEN YOU CALLED TO VERIFY THE BID, I EXPLAINED THAT I EXPECTED TO GET 3 SHORT PIECES AND 39 PIECES 158 FT. LONG. INASMUCH AS THERE HAS BEEN A MISUNDERSTANDING, WE WILL PREPAY THE FREIGHT ON THE MERCHANDISE BACK TO CENTER LINE IF THAT IS SATISFACTORY TO YOU; AND IT CAN BE READVERTISED AND OUR MONEY RETURNED. PLEASE ADVISE.'

THE CONTRACTING OFFICER'S REPORT OF MAY 1, 1957, REFERS TO THE LETTER OF APRIL 12, 1957, FROM THE CONTRACTING OFFICER AND DOES NOT DENY THE ALLEGATION IN THE CONTRACTOR'S LETTER OF APRIL 12 THAT HE EXPECTED TO GET THREE SHORT PIECES OF CABLE AND 39 PIECES 158 FEET LONG INSTEAD OF 158 INCHES AS INDICATED IN THE INVITATION. IN FACT, THE CONTRACTING OFFICER'S REPLY OF APRIL 18, 1957, IN WHICH HE DENIED THE CONTRACTOR'S REQUEST OF APRIL 12 FOR THE RETURN OF THE PURCHASE PRICE INDICATES THAT HE MAY HAVE BEEN AWARE OF THE NATURE OF THE CONTRACTOR'S ERROR SINCE HE EMPHASIZES THE MATTER OF LENGTH OF THE CABLE IN HIS STATEMENT THAT "THE DESCRIPTION OF ITEM NO. 3 CLEARLY INDICATED THAT THE LENGTH OF THE CABLE FOR SALE WAS 158 INCHES LONG AND THAT THE ACQUISITION COST WAS $250.00.'

IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT THERE IS CONSIDERABLE DOUBT THAT IT CAN BE SAID, AS A MATTER OF LAW, THAT THE ACCEPTANCE CONSUMMATED A VALID CONTRACT, PARTICULARLY SINCE THE CONTRACTOR'S BID FOR THE PURCHASE OF THE CABLE WAS NEARLY TWICE THE AMOUNT OF THE ACQUISITION COST.

ACCORDINGLY, ITEM 3 OF THE CONTRACT MAY BE CANCELLED AND THE PURCHASE PRICE REFUNDED TO THE CONTRACTOR, AFTER HE HAS RETURNED THE CABLE FREIGHT PREPAID, AS OFFERED BY HIM IN HIS LETTER OF APRIL 12, 1957.

A REFERENCE TO THIS DECISION SHOULD BE MADE ON THE CONTRACT INVOLVED.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF MAY 1, 1957, ARE RETURNED.