B-136810, JUL. 24, 1958

B-136810: Jul 24, 1958

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BIDS WERE OPENED ON MAY 14. BEARINGS COMPANY WAS DETERMINED TO BE THE HIGHEST ACCEPTABLE BIDDER ON LOTS NOS. 8. AWARD FOR THOSE LOTS WAS MADE TO THAT COMPANY BY LETTER OF MAY 19. THE ALLEGATION OF ERROR WAS LATER SUPPLEMENTED BY A LETTER OF JUNE 10. THE STATEMENT OF FACTS PREPARED BY THE CONTRACTING OFFICER SHOWS THAT LOT NO. 7 ACTUALLY CONSISTED OF BALL AND ROLLER BEARINGS WHILE LOT NO. 8 WAS MADE UP OF TEES. IT IS FURTHER SHOWN THAT WHILE THE D.C. BEARINGS COMPANY BID FOR ITEM NO. 8 WAS IN THE AMOUNT OF $150. BEARINGS COMPANY'S BID ON ITEM NO. 8 WAS APPROXIMATELY SEVEN TIMES GREATER THAN THE NEXT HIGHEST BID ON THAT ITEM. THE BIDDER WAS INTERESTED PRIMARILY IN BEARINGS SHOULD HAVE PUT THE CONTRACTING OFFICER ON NOTICE OF PROBABLE ERROR WARRANTING A REQUEST FOR VERIFICATION OF THE BID.

B-136810, JUL. 24, 1958

TO THE SECRETARY OF THE NAVY:

A LETTER DATED JULY 14, 1958, REFERENCE R11.2, L8), L8/NP7, SIGNED BY THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTS OUR DECISION AS TO THE APPROPRIATE DISPOSITION OF AN AWARD OF SALES CONTRACT N 171-15797A UNDER THE CIRCUMSTANCES DESCRIBED BELOW.

SITE SALES LETTER SSL-3-58-171, ISSUED MARCH 28, 1958, BY THE NAVAL GUN FACTORY SUPPLY DEPARTMENT SOLICITED BIDS FOR 243 LOTS OF SURPLUS MATERIAL. BIDS WERE OPENED ON MAY 14, 1958. THE D.C. BEARINGS COMPANY WAS DETERMINED TO BE THE HIGHEST ACCEPTABLE BIDDER ON LOTS NOS. 8, 109, 121 AND 123. AWARD FOR THOSE LOTS WAS MADE TO THAT COMPANY BY LETTER OF MAY 19, 1958.

SUBSEQUENTLY, A REPRESENTATIVE OF THE PURCHASING FIRM ADVISED THAT THEY HAD INTENDED BIDDING ON LOT NO. 7 INSTEAD OF LOT NO. 8 AND REQUESTED THAT THE AWARD FOR LOT NO. 8 BE WITHDRAWN. THE ALLEGATION OF ERROR WAS LATER SUPPLEMENTED BY A LETTER OF JUNE 10, 1958, WHICH APPENDED A WORKSHEET INDICATING THAT THE LOT MISTAKENLY DENOMINATED THEREIN AS NO. 8 CONTAINED BEARINGS OF VARIOUS DESCRIPTIONS. THE STATEMENT OF FACTS PREPARED BY THE CONTRACTING OFFICER SHOWS THAT LOT NO. 7 ACTUALLY CONSISTED OF BALL AND ROLLER BEARINGS WHILE LOT NO. 8 WAS MADE UP OF TEES, ELBOWS AND MISCELLANEOUS PIPE FITTINGS AND THAT WITH THE EXCEPTION OF LOT NO. 8, THE PURCHASER HAD BID ONLY ON LOTS CONTAINING BALL AND ROLLER BEARINGS. IT IS FURTHER SHOWN THAT WHILE THE D.C. BEARINGS COMPANY BID FOR ITEM NO. 8 WAS IN THE AMOUNT OF $150, THE 15 OTHER BIDS RECEIVED FOR THAT ITEM RANGED FROM $21.89 TO $1.12.

ORDINARILY, A DIFFERENCE IN PRICES BID ON SURPLUS MATERIAL WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A SIMILAR DIFFERENCE IN PRICES BID ON SUPPLIES OR SERVICES TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596. IN THE PRESENT INSTANCE, HOWEVER, THE FACT THAT THE D.C. BEARINGS COMPANY'S BID ON ITEM NO. 8 WAS APPROXIMATELY SEVEN TIMES GREATER THAN THE NEXT HIGHEST BID ON THAT ITEM, COUPLED WITH THE FACT THAT, AS INDICATED BY THE FIRM NAME AND THE OTHER ITEMS BID ON, THE BIDDER WAS INTERESTED PRIMARILY IN BEARINGS SHOULD HAVE PUT THE CONTRACTING OFFICER ON NOTICE OF PROBABLE ERROR WARRANTING A REQUEST FOR VERIFICATION OF THE BID. THAT NOT HAVING BEEN DONE AND THE BIDDER HAVING SUBMITTED AMPLE PROOF SUBSTANTIATING ITS ALLEGATION OF ERROR, THE AWARD OF ITEM 8 SHOULD BE CANCELLED AS RECOMMENDED BY THE CONTRACTING OFFICER. SEE B-131181, APRIL 8, 1957.