B-136672, JUL. 22, 1958

B-136672: Jul 22, 1958

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JUNE 27. THE BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF 220. 000 YEN PER UNIT WAS INSERTED IN THE BID IN ERROR WHEREAS IT WAS INTENDED TO BID THE AMOUNT OF 5. THE CONTRACTING OFFICER HAS REPORTED THAT THE ACQUISITION COST FOR THE ITEM IN QUESTION IS $2. THE NEXT HIGH BID IS 7. 000 YEN ($19.70) AND THE PERCENTAGE OF RETURN WOULD HAVE BEEN ONLY 15.5. IN THE CIRCUMSTANCES IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE PROBABILITY OF ERROR IN THE BID ON ITEM 5 AND SHOULD HAVE AFFORDED THE BIDDER AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO THE ACCEPTANCE THEREOF.

B-136672, JUL. 22, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JUNE 27, 1958, FROM THE DEPUTY ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO WHETHER CONTRACT NO. DA/S/92-557-FEC-21159 MAY BE RESCINDED BECAUSE OF AN ALLEGED MISTAKE IN BID ON THE ITEM COVERED BY THE CONTRACT.

THE UNITED STATES QUARTERMASTER CENTER, TOKYO, JAPAN, BY SALES INVITATION NO. 92-557-S-58-1150, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS MATERIALS DESCRIBED UNDER ITEMS 1 TO 7, INCLUSIVE. Y. K. TOWA KOGYOSHO, SUBMITTED AN UNDATED BID OFFERING TO PURCHASE ITEM NO. 5 CONSISTING OF 22 MISCELLANEOUS REFRIGERATOR COOLER UNITS (UNUSED) FOR THE PRICE OF 50,000 YEN PER UNIT. THE BID WAS ACCOMPANIED BY A BID DEPOSIT IN THE SUM OF 220,000 YEN.

AFTER AWARD OF THE CONTRACT ON MARCH 6, 1958, THE BIDDER IN ITS LETTER OF MARCH 18, 1958, REQUESTED CANCELLATION OF THE CONTRACT ON THE GROUND THAT THE AMOUNT OF 50,000 YEN PER UNIT WAS INSERTED IN THE BID IN ERROR WHEREAS IT WAS INTENDED TO BID THE AMOUNT OF 5,000 YEN PER UNIT. THE PROPERTY HAS NOT BEEN REMOVED BY THE BIDDER.

THE CONTRACTING OFFICER HAS REPORTED THAT THE ACQUISITION COST FOR THE ITEM IN QUESTION IS $2,788, AND THAT THE SELLING PRICE WOULD YIELD 109.6 PERCENT OF THE ACQUISITION COST. THE NEXT HIGH BID IS 7,000 YEN ($19.70) AND THE PERCENTAGE OF RETURN WOULD HAVE BEEN ONLY 15.5. THE CONTRACTING OFFICER HAS RECOMMENDED THAT THE DEPOSIT BE REFUNDED.

IN THE CIRCUMSTANCES IT WOULD APPEAR THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED THE PROBABILITY OF ERROR IN THE BID ON ITEM 5 AND SHOULD HAVE AFFORDED THE BIDDER AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO THE ACCEPTANCE THEREOF. ACCORDINGLY, THE AWARD UNDER ITEM NO. 5 SHOULD BE CANCELLED, THE BIDDER RELEASED FROM ANY LIABILITY THEREUNDER AND THE BID DEPOSIT IN THE SUM OF 220,000 YEN SHOULD BE REFUNDED.

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