B-136030, MAY 9, 1958

B-136030: May 9, 1958

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER OF MAY 2. TO HAVE BEEN MADE IN ITS BID OPENED FEBRUARY 13. THE BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF $525. THE COMPANY ADVISED THAT ON INSPECTION OF ITEM 35 IT FOUND THAT IT HAD WRITTEN ITS BID PRICE ON THE WRONG ITEM AND THAT THE CORRECT ITEM SHOULD HAVE BEEN 34 WHICH IS A MILLING MACHINE INSTEAD OF A DRILLING MACHINE AND THAT ITS BID PRICE WAS ALMOST TWICE THE ACQUISITION COST ($880). 626.56 ON ITEM 35 IS ENTIRELY OUT OF LINE WITH THE 20 OTHER BIDS ON ITEM 35. THE BID OF THE COMPANY ON ITEM 35 WAS APPROXIMATELY 12 TIMES GREATER THAN THE NEXT HIGH BID AND ALMOST DOUBLE THE ORIGINAL ACQUISITION COST OF THE ITEM. WE THINK THE PROBABILITY OF ERROR IN THE BID AS TO ITEM 35 WAS APPARENT AND THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

B-136030, MAY 9, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER OF MAY 2, 1958, WITH ENCLOSURES, R11.2 L8/L8/NT4-4, FROM THE DIRECTOR, PURCHASE OPERATIONS DIVISION, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION IN REGARD TO AN ERROR ALLEGED BY THE V. R. DENNIS CONSTRUCTION COMPANY, SAN DIEGO, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID OPENED FEBRUARY 13, 1958.

IN RESPONSE TO INVITATION TO BID NO. B-52-58-244, DATED JANUARY 22, 1958, THE V. R. DENNIS CONSTRUCTION COMPANY SUBMITTED ITS BID DATED FEBRUARY 11, 1958, OFFERING TO PURCHASE, AMONG OTHERS, ITEM 35 CONSISTING OF ONE (1) USED DRILLING MACHINE, TAPOR SPINDLE, 16 1/4 INCHES TABLE DIA., 4 SPEED BELT DRIVE AUTOMATIC GEAR FEED, FLOOR MOUNTED IN FAIR CONDITION, FOR THE PRICE OF $1,626.56. THE BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF $525.

BY LETTER DATED FEBRUARY 26, 1958, THE COMPANY ADVISED THAT ON INSPECTION OF ITEM 35 IT FOUND THAT IT HAD WRITTEN ITS BID PRICE ON THE WRONG ITEM AND THAT THE CORRECT ITEM SHOULD HAVE BEEN 34 WHICH IS A MILLING MACHINE INSTEAD OF A DRILLING MACHINE AND THAT ITS BID PRICE WAS ALMOST TWICE THE ACQUISITION COST ($880).

THE ABSTRACT OF BIDS SHOWS THAT 20 OTHER BIDS RECEIVED ON ITEM 35 RANGED FROM $5 TO $139 EACH. THUS, THE BID OF THE COMPANY OF $1,626.56 ON ITEM 35 IS ENTIRELY OUT OF LINE WITH THE 20 OTHER BIDS ON ITEM 35.

ORDINARILY, A MERE DIFFERENCE IN THE PRICE 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 THE PRICES QUOTED ON NEW EQUIPMENT TO BE FURNISHED THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; 28 ID. 261; ID. 550. IN THE INSTANT CASE, HOWEVER, THE BID OF THE COMPANY ON ITEM 35 WAS APPROXIMATELY 12 TIMES GREATER THAN THE NEXT HIGH BID AND ALMOST DOUBLE THE ORIGINAL ACQUISITION COST OF THE ITEM. IN THE CIRCUMSTANCES, WE THINK THE PROBABILITY OF ERROR IN THE BID AS TO ITEM 35 WAS APPARENT AND THE BID SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO ROOM FOR DOUBT THAT A BONA FIDE ERROR WAS MADE BY THE V. R. DENNIS CONSTRUCTION COMPANY IN THAT THE QUOTATION INTENDED FOR ITEM 34 ERRONEOUSLY WAS ENTERED OPPOSITE ITEM 35, NO BID ON THE LATTER ITEM HAVING BEEN INTENDED. ACCORDINGLY, THE AWARD TO THE V. R. DENNIS CONSTRUCTION COMPANY TO ITEM 35 MAY BE CANCELED AND ITS BID DEPOSIT REFUNDED.

THE PAPERS, WITH THE EXCEPTION OF THE BIDDER'S LETTER OF FEBRUARY 26, 1958, ARE RETURNED.