B-136260, JUN. 4, 1958

B-136260: Jun 4, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED MAY 21. K. WAS ACCEPTED ON OCTOBER 25. THE CONTRACTING OFFICER RECEIVED A LETTER FROM THE CONTRACTOR IN WHICH IT WAS STATED THAT A MISTAKE HAD BEEN MADE IN ITS BID DUE TO A MISUNDERSTANDING OR MISINTERPRETATION OF THE UNIT OF MEASURE "SHORT TON.'. THE CONTRACTOR CONTENDS THAT IT WAS UDNER THE IMPRESSION THAT THE PROPERTY WHICH WAS BEING SOLD WOULD BE DELIVERED BY AN UNSPECIFIED UNIT OF MEASURE WHICH IS 200 POUNDS PER UNIT MORE THAN A SHORT TON. THE OVER-ALL AVERAGE PRICE RECEIVED FOR HEAVY IRON AND STEEL SCRAP SOLD BY THE ARMY WAS 22. 241.03 INDICATES A RETURN OF 4.2 PERCENT WHICH IS NOT CONSIDERED AN EXCESSIVELY HIGH BID FOR THE MATERIAL OFFERED AT THE TIME THE BID WAS RECORDED.

B-136260, JUN. 4, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MAY 21, 1958, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), SUBMITTING A REQUEST BY SANYO SHOJI KABUSHIKI KAISHA, TOKYO, JAPAN, FOR RESCISSION OF CONTRACT NO. DA/S/92-557 -FEC-18705 ON THE GROUND THAT IT MISUNDERSTOOD THE UNIT OF MEASURE ,SHORT TON" AS BEING 2,200 POUNDS.

THE ARMY QUARTERMASTER CENTER, TOKYO, JAPAN, BY INVITATION NO. 92 577-S- 58-496 DATED SEPTEMBER 23, 1957, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 110 SHORT TONS OF MISCELLANEOUS HEAVY UNPREPARED IRON AND STEEL SCRAP AS DESCRIBED UNDER ITEM 5. IN RESPONSE THE CONTRACTOR SUBMITTED ITS BID DATED OCTOBER 1, 1957, OFFERING TO PURCHASE THIS IRON AND STEEL SCRAP FOR THE PRICE OF 22,900 YEN PER TON. THREE OTHER BIDS RECEIVED FOR ITEM 5 RANGED FROM 18,750 YEN TO 22,570 YEN. THE HIGH BID OF SANYO SHOJI K. K. WAS ACCEPTED ON OCTOBER 25, 1957.

ON DECEMBER 3, 1957, THE CONTRACTING OFFICER RECEIVED A LETTER FROM THE CONTRACTOR IN WHICH IT WAS STATED THAT A MISTAKE HAD BEEN MADE IN ITS BID DUE TO A MISUNDERSTANDING OR MISINTERPRETATION OF THE UNIT OF MEASURE "SHORT TON.' THE CONTRACTOR CONTENDS THAT IT WAS UDNER THE IMPRESSION THAT THE PROPERTY WHICH WAS BEING SOLD WOULD BE DELIVERED BY AN UNSPECIFIED UNIT OF MEASURE WHICH IS 200 POUNDS PER UNIT MORE THAN A SHORT TON. IN VIEW OF THIS ALLEGED MISINTERPRETATION THE CONTRACTOR HAS REQUESTED TO BE RELIEVED OF ITS OBLIGATION UNDER THE CONTRACT.

THE CONTRACTING OFFICER HAS REPORTED THAT AT THE TIME OF AWARD OF THE CONTRACT, THE OVER-ALL AVERAGE PRICE RECEIVED FOR HEAVY IRON AND STEEL SCRAP SOLD BY THE ARMY WAS 22,766.32 YEN PER SHORT TON; AND THAT A COMPARISON OF THE BID OF 22,900 YEN PER TON WITH THE ACQUISITION COST OF $165,241.03 INDICATES A RETURN OF 4.2 PERCENT WHICH IS NOT CONSIDERED AN EXCESSIVELY HIGH BID FOR THE MATERIAL OFFERED AT THE TIME THE BID WAS RECORDED. AN EXAMINATION OF THE ABSTRACT OF BIDS WITH REGARD TO THE RANGE OF BIDS RECEIVED DOES NOT INDICATE THE PRESENCE OF ANY OBVIOUS ERROR IN BIDDING.

THE TERM "SHORT TON" IS A STANDARD PHRASE USED ONLY TO DESCRIBE THE TON OF 2,000 POUNDS AVOIRDUPOIS AND IS CLEAR AND UNAMBIGUOUS. IT IS REPORTED BY YOUR DEPARTMENT THAT A CONVERSION TABLE HAS BEEN PUBLISHED AS A SUPPLEMENT TO "JAPANESE ECONOMIC STATISTICS" BY THE JAPANESE GOVERNMENT, CLEARLY SHOWING THE SHORT TON AS BEING 2,000 POUNDS AVOIRDUPOIS, WHICH WOULD INDICATE THAT JAPANESE FIRMS DEALING WITH FOREIGN WEIGHTS AND MEASURES ARE GENERALLY FAMILIAR WITH THE TERM "SHORT TON.'

THERE IS NOTHING IN THIS CASE TO INDICATE THAT THE GOVERNMENT EITHER KNEW OR HAD REASON TO KNOW THAT THE CONTRACTOR HAD MADE A MISTAKE. THERE WAS NO CONCEALMENT OR ANY ACTION ON THE PART OF THE GOVERNMENT WHICH CAN BE CONSIDERED AS HAVING MISLED THE CONTRACTOR. UNDER THESE CIRCUMSTANCES THE CONTRACTOR MUST BEAR THE CONSEQUENCES OF ITS MISTAKE. UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683.

ACCORDINGLY, THE REQUEST FOR RESCISSION OF THE CONTRACT MUST BE DENIED.