B-136661, JUL. 18, 1958

B-136661: Jul 18, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 27. AFTER AWARD OF THE CONTRACT FULL PAYMENT FOR THE CABS WAS MADE BY THE PURCHASER. HIS REASON FOR THE REQUEST WOULD APPEAR TO BE THAT WHEN HE INSPECTED THE PROPERTY FOR SALE ON TWO SEPARATE OCCASIONS HE WAS ACCOMPANIED BY A GOVERNMENT CHECKER WHOM HE IMPLIES MISLED HIM AS TO THE IDENTITY OF ITEM NO. 5 AND. THE PURCHASER HAS FAILED TO SUBSTANTIATE THAT AN ERROR IN ANY FORM WAS. THAT IS PREDICATED. WAS FOR THE PROPERTY COVERED BY ITEM NO. 223. SUCH AN ERROR WOULD APPEAR TO HAVE BEEN ENTIRELY OF A UNILATERAL NATURE SINCE IT IS NOT SHOWN THAT THE GOVERNMENT CONTRIBUTED TO THE ERROR IN ANY WAY. IT IS REPORTED THAT THE PROPERTY WAS CLEARLY MARKED.

B-136661, JUL. 18, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 27, 1958, WITH ENCLOSURES, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY FOR LOGISTICS, SUBMITTING FOR OUR CONSIDERATION A REQUEST FROM YOSHIMURA SHOKAI, YOKOHAMA, JAPAN, FOR THE RESCISSION OF DEPARTMENT OF THE ARMY CONTRACT NO. DA (S/92-557-FEC- 20843, DATED FEBRUARY 15, 1958.

IN RESPONSE TO INVITATION NO. 92-557-S-58-944, ISSUED ON DECEMBER 20, 1957, BY THE U.S. ARMY QUARTERMASTER CENTER AT TOKYO, YOSHIMURA SHOKAI SUBMITTED A BID OFFERING TO PURCHASE ITEM NO. 5, COVERING NINE UNUSED ARMORED CABS FOR CATERPILLAR TRACTORS AT 612,000 YEN. AFTER AWARD OF THE CONTRACT FULL PAYMENT FOR THE CABS WAS MADE BY THE PURCHASER; HOWEVER, BY A SUBSEQUENT LETTER DATED MARCH 7, 1958, MR. YOSHIMURA REQUESTED THAT THE CONTRACT BE CANCELLED. HIS REASON FOR THE REQUEST WOULD APPEAR TO BE THAT WHEN HE INSPECTED THE PROPERTY FOR SALE ON TWO SEPARATE OCCASIONS HE WAS ACCOMPANIED BY A GOVERNMENT CHECKER WHOM HE IMPLIES MISLED HIM AS TO THE IDENTITY OF ITEM NO. 5 AND, THEREFORE, MR. YOSHIMURA INSPECTED ITEM NO. 223 INSTEAD OF ITEM NO. 5, THE TWO ITEMS BEING PHYSICALLY LOCATED SIDE BY SIDE. MR. YOSHIMURA ALLEGES FURTHER THAT ITEM NO. 223 CONTAINED APPROXIMATELY 35 SHORT TONS WHEREAS ITEM NO. 5, WHICH HE BID ON, CONTAINED ONLY 4 SHORT TONS.

AS STATED IN THE RECOMMENDATION OF THE ASSISTANT CHIEF OF STAFF, DATED MAY 14, 1958, THE PURCHASER HAS FAILED TO SUBSTANTIATE THAT AN ERROR IN ANY FORM WAS, IN FACT, MADE IN HIS BID IF, INDEED, THAT IS PREDICATED. MR. YOSHIMURA DID INSPECT ITEM NO. 223 AND BELIEVED THAT THE BID, WHICH HE LATER SUBMITTED FOR ITEM NO. 5, WAS FOR THE PROPERTY COVERED BY ITEM NO. 223, SUCH AN ERROR WOULD APPEAR TO HAVE BEEN ENTIRELY OF A UNILATERAL NATURE SINCE IT IS NOT SHOWN THAT THE GOVERNMENT CONTRIBUTED TO THE ERROR IN ANY WAY. IN THIS CONNECTION, IT IS REPORTED THAT THE PROPERTY WAS CLEARLY MARKED, WAS IN THE LOCATIONS LISTED ON THE INVITATION FOR BIDS AND WAS OTHERWISE SPECIFICALLY DESCRIBED. MOREOVER, THE STATEMENTS IN THE RECORD OF THE CARGO CHECKERS FAILS TO SHOW THAT INFORMATION OF ANY KIND, MUCH LESS THE ALLEGED INCORRECT INFORMATION, WAS GIVEN BY THEM TO MR. YOSHIMURA ABOUT THE PROPERTY ADVERTISED FOR SALE. IT ALSO MIGHT BE STATED HERE THAT EVEN IF AN ERROR HAD BEEN MADE AND SUBSTANTIATED BY THE PURCHASER WITH RESPECT TO ITEM NO. 5 OF HIS BID, THERE WOULD APPEAR TO BE NO BASIS FOR CHARGING THE CONTRACTING OFFICER WITH NOTICE OF SUCH AN ERROR IN THE ACCEPTANCE OF THE BID SINCE IT REASONABLY MAY NOT BE CONCLUDED THAT THE TWO OTHER WIDELY VARIANT UNIT PRICE BIDS OF 30,520 YEN AND 2,380 YEN, WHICH WERE RECEIVED IN ADDITION TO THE PURCHASER'S BID OF 68,000 YEN, CONSTITUTE SUCH A DIFFERENTIAL IN BID PRICES IN A SALE TRANSACTION AS TO CREATE ANY DOUBT AS TO THE CORRECTNESS OF THE HIGH BID RECEIVED. UNDER SUCH CIRCUMSTANCES IT MUST NECESSARILY BE HELD THAT THE BID WAS ACCEPTED IN GOOD FAITH.

WITH REGARD TO THE POSSIBLE INFERENCE IN MR. YOSHIMURA'S LETTER OF MARCH 7, 1958, THAT SOME OF THE PROPERTY WHICH WAS INSPECTED AND BID ON MAY HAVE BEEN REMOVED FROM ITEM NO. 5 AFTER AWARD, THERE IS NO EVIDENCE AS TO SUCH AN OCCURRENCE AND THIS ALLEGATION IS AT VARIANCE WITH HIS ASSERTION THAT HE WAS SHOWN AND BID ON ITEM NO. 223. FURTHERMORE, THE CONTRACTING OFFICER IN HIS REPORT OF APRIL 4, 1958, HAS STATED THAT THE PURCHASER WAS SHOWN THE ARMORED CABS LISTED UNDER ITEM NO. 5 AND THAT THIS PROPERTY WAS DELIVERED TO HIM.

ACCORDINGLY, THERE APPEARS TO BE NO LEGAL BASIS FOR AUTHORIZING A CANCELLATION OF CONTRACT NO. DA (S/92-557-FEC-20843.