B-139931, JUL. 6, 1959

B-139931: Jul 6, 1959

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED JUNE 16. OUR DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED. TWO BIDS WERE RECEIVED FOR ITEM 76. A CONTRACT WAS AWARDED TO THE AIRCRAFT ENGINE PARTS COMPANY ON THE BASIS THAT ITS BID WAS THE HIGHEST RECEIVED. THE CONTRACTOR ADVISED THAT ITS BID OF $198.92 WAS INTENDED FOR ITEM 75. THAT THEREUPON THE CONTRACTOR WAS REQUESTED TO FURNISH WRITTEN CONFIRMATION OF THE ALLEGED ERROR TOGETHER WITH ANY SUBSTANTIATING EVIDENCE AVAILABLE. THE CONTRACTING OFFICER POINTED OUT THAT THE CONTRACTOR'S BID OF $198.92 FOR ITEM 76 IS APPROXIMATELY 2.186 TIMES HIGHER THAN THE NEXT HIGH BID RECEIVED BUT THAT. THERE WAS NO EVIDENCE ON THE FACE OF THE BID TO ALERT HIM TO THE POSSIBILITY OF ERROR.

B-139931, JUL. 6, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JUNE 16, 1959 (R11.2 L8/L8) NT4 28), WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, SUBMITTING FOR CONSIDERATION THE MATTER OF A MISTAKE IN BID ALLEGED BY THE AIRCRAFT ENGINE PARTS COMPANY, BURBANK, CALIFORNIA, AFTER THE AWARD OF SALES CONTRACT NO. N228S-39488 (SALES INVITATION NO. B-208-59-228) BY THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. IN VIEW OF THE FACTS DISCLOSED BY THE RECORD IN THIS CASE, OUR DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED, SINCE THE ERROR, IF ANY, APPEARS TO BE UNILATERAL.

THE RECORD SHOWS THAT BY THE CITED INVITATION, DATED APRIL 15, 1959, THE DISPOSAL DEPARTMENT, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE OF CERTAIN GOVERNMENT-OWNED SURPLUS PROPERTY, CONSISTING OF AVIATION MATERIALS LOCATED AT THE NAVAL SUPPLY ANNEX, STOCKTON, CALIFORNIA, THE BIDS TO BE OPENED AT 1 P.M. ON MAY 6,1959. TWO BIDS WERE RECEIVED FOR ITEM 76, THE HIGHER BEING THAT SUBMITTED BY THE AIRCRAFT ENGINE PARTS COMPANY AT THE PRICE OF $198.92, AND THE OTHER BY CAL METALS AT THE PRICE OF $90.97. UNDER DATE OF MAY 12, 1959, A CONTRACT WAS AWARDED TO THE AIRCRAFT ENGINE PARTS COMPANY ON THE BASIS THAT ITS BID WAS THE HIGHEST RECEIVED.

THE CONTRACTING OFFICER REPORTS THAT BY A COMMUNICATION DATED MAY 15, 1959, THE CONTRACTOR ADVISED THAT ITS BID OF $198.92 WAS INTENDED FOR ITEM 75, AND THAT THEREUPON THE CONTRACTOR WAS REQUESTED TO FURNISH WRITTEN CONFIRMATION OF THE ALLEGED ERROR TOGETHER WITH ANY SUBSTANTIATING EVIDENCE AVAILABLE. BY A LETTER OF THE SAME DAY THE CONTRACTOR ADVISED THAT AN ERROR HAD BEEN MADE IN TRANSFERRING THE FIGURES FROM A WORKSHEET. IN SUPPORT OF THE ALLEGATION OF ERROR, THE CONTRACTOR SUBMITTED A WORKSHEET INDICATING AN INTENDED BID PRICE OF $198.92 FOR ITEM 75--- NO ENTRY APPEARING THEREON FOR ITEM 76. THE CONTRACTING OFFICER POINTED OUT THAT THE CONTRACTOR'S BID OF $198.92 FOR ITEM 76 IS APPROXIMATELY 2.186 TIMES HIGHER THAN THE NEXT HIGH BID RECEIVED BUT THAT, HOWEVER, THERE WAS NO EVIDENCE ON THE FACE OF THE BID TO ALERT HIM TO THE POSSIBILITY OF ERROR. ON THE BASIS OF THE FACTS IN THIS CASE, THE CONTRACTING OFFICER EXPRESSED THE VIEW THAT THE CONTRACTOR DID MAKE AN ERROR IN ITS BID AS CLAIMED, AND HE RECOMMENDED THAT THE AWARD OF ITEM 76 TO THE AIRCRAFT ENGINE PARTS COMPANY BE CANCELLED WITHOUT PENALTY TO THE COMPANY.

THE FACT THAT THERE WAS A CONSIDERABLE VARIANCE BETWEEN THE TWO BIDS RECEIVED FOR ITEM 76 APPEARS NOT TO BE A MATTER FOR CONSIDERATION IN THE INSTANT CASE. IT HAS BEEN HELD BY OUR OFFICE IN NUMEROUS DECISIONS THAT IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON SALVAGE, WASTE AND SURPLUS PROPERTY, A MERE PRICE DIFFERENCE WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AS WOULD SIMILAR PRICE DIFFERENCES ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. THIS POSITION IS BASED UPON THE FACT THAT PRICES OFFERED TO THE GOVERNMENT FOR ITS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY A PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; 28 ID. 261, AND ID. 550.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE IN THE BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. THE INVITATION ISSUED IN THIS CASE WAS CLEAR AND UNAMBIGUOUS AS TO THE MATERIALS OFFERED FOR SALE. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF AN ERROR WAS MADE IN THE PREPARATION OF THE BID, AS ALLEGED, IT PROPERLY MAY BE ATTRIBUTED SOLELY TO THE CONTRACTOR'S NEGLIGENCE, AND, SINCE THE ERROR ON WHICH THE CLAIM FOR RELIEF IS BASED WAS UNILATERAL, NOT MUTUAL, THE CONTRACTOR IS NOT ENTITLED TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE CONTRACTING OFFICER REPORTS THAT THE AMOUNT OF $39.78, REPRESENTING TWENTY PERCENT OF THE TOTAL AMOUNT BID ON ITEM 76, HAS BEEN RETAINED PENDING SETTLEMENT OF THE CLAIM. THAT PROCEDURE APPEARS TO BE AUTHORIZED BY PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS AND IS APPROVED.