B-140562, SEP. 8, 1959

B-140562: Sep 8, 1959

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED AUGUST 19. BECAUSE OF AN ERROR ALLEGED AFTER AWARD IN ITS BID ON WHICH THE AWARD WAS BASED. BIDS WERE INVITED FOR THE PURCHASE FROM THE GOVERNMENT OF 85 ITEMS OF SURPLUS PROPERTY LISTED THEREIN. BIDS WERE REQUIRED TO BE SUBMITTED ON A SPOT BID CARD. THE MATERIAL IN ITEM NO. 44 WAS DESCRIBED IN THE SPOT BID SALE ANNOUNCEMENT AS: "WI 400932. THREE OTHER BIDS WERE RECEIVED ON THAT ITEM: ".062 EACH" QUANTITY "UP TO 1500. WAS ACCEPTED AND THE ENTIRE LOT OF MATERIAL IN ITEM NO. 44. WAS AWARDED TO IT. THE VICE PRESIDENT OF GORDON ADVISED THE CONTRACTING OFFICER THAT HIS FIRM'S BID ON ITEM NO. 44 WAS MEANT TO READ "ONE CENT (?01) PER EACH.'.

B-140562, SEP. 8, 1959

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 19, 1959, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO WHETHER HARRY GORDON SCRAP MATERIALS, INC., LEXINGTON, KENTUCKY, MAY BE RELIEVED OF THE AWARD TO IT OF ITEM NO. 44 ON SPOT BID SALE NO. 15 040-S-59-16, BECAUSE OF AN ERROR ALLEGED AFTER AWARD IN ITS BID ON WHICH THE AWARD WAS BASED.

BY SPOT BID SALE ANNOUNCEMENT NO. 15-040-S-59-16, BIDS WERE INVITED FOR THE PURCHASE FROM THE GOVERNMENT OF 85 ITEMS OF SURPLUS PROPERTY LISTED THEREIN, TO BE SOLD AT THE PROPERTY DISPOSAL OFFICE, BLUE GRASS ORDNANCE DEPOT, RICHMOND, KENTUCKY. BIDS WERE REQUIRED TO BE SUBMITTED ON A SPOT BID CARD, SIGNED BY THE BIDDER. EACH BIDDER OFFERED AND AGREED TO PURCHASE, SUBJECT TO ALL THE TERMS AND CONDITIONS OF THE SALE SET FORTH IN THE INVITATION, THE ITEM DESIGNATED ON THE SPOT BID CARD AT THE PRICE INDICATED BY IT.

THE MATERIAL IN ITEM NO. 44 WAS DESCRIBED IN THE SPOT BID SALE ANNOUNCEMENT AS:

"WI 400932, LINK, CONNECTING, FRONT, SHOCK ABSORBER ASSEMBLY, DP 53790939. GO67-73-77301. UNUSED. PACKED IN 866 BOXES. UNIT ACQN COST $1.59. TOTAL WEIGHT 60,084 LBS. MINIMUM PURCHASE - 1,500 EACH.'

CONSISTING OF A QUANTITY OF "25,979 EACH.'

IN RESPONSE TO THE INVITATION, HARRY GORDON SCRAP MATERIALS, INC., SUBMITTED ON A SPOT BID CARD A BID ON ITEM NO. 44 IN THE AMOUNT OF "10 CENTS EACH" QUANTITY "ALL.' THREE OTHER BIDS WERE RECEIVED ON THAT ITEM: ".062 EACH" QUANTITY "UP TO 1500; " "1 2/10 CENTS EACH; " AND ".008.' THE GORDON BID, BEING THE HIGHEST, WAS ACCEPTED AND THE ENTIRE LOT OF MATERIAL IN ITEM NO. 44, TOGETHER WITH OTHER ITEMS, WAS AWARDED TO IT, NOTICE OF AWARD AND SALES DOCUMENT BEING DATED MARCH 30, 1959.

AFTER RECEIPT OF THE NOTICE OF AWARD, BY LETTER DATED APRIL 1, 1959, THE VICE PRESIDENT OF GORDON ADVISED THE CONTRACTING OFFICER THAT HIS FIRM'S BID ON ITEM NO. 44 WAS MEANT TO READ "ONE CENT (?01) PER EACH.' HE STATED THAT HIS FIRM IS IN THE SCRAP BUSINESS AND THAT IT INTENDED TO PAY SCRAP PRICES WHEN IT PURCHASES SURPLUS PROPERTY. CORRECTION OF THE ERROR WAS REQUESTED.

WHILE IT MAY BE THAT THE BIDDER DID MAKE A MISTAKE, AS ALLEGED, THE QUESTION HERE FOR CONSIDERATION IS NOT WHETHER A MISTAKE WAS MADE IN THE BID BUT WHETHER THE ACCEPTANCE THEREOF CONSUMMATED A LEGAL AND BINDING SALE. ACCEPTANCE OF A BID, IN THE ABSENCE OF A MUTUAL MISTAKE OR OF THE CONTRACTING OFFICER ACCEPTING THE BID HAVING NOTICE--- ACTUAL OR CONSTRUCTIVE--- OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH, RESULTS IN A VALID AND BINDING CONTRACT.

SINCE IT IS INDICATED THAT ANY ERROR WHICH GORDON MAY HAVE MADE IN ITS BID WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO ITS NEGLIGENCE IN THE PREPARATION OF THE BID, THE ERROR, AS ALLEGED, WAS UNILATERAL AND NOT MUTUAL. WITH RESPECT TO THE DIFFERENCE BETWEEN THE GORDON BID AND THE NEXT HIGH BID, IT IS NOTED THAT THE UNIT ACQUISITION COST OF THE ITEM, DESCRIBED AS "UNUSED," IS $1.59. A BID OF $0.10 PER UNIT WOULD NOT SEEM UNREASONABLE TO ANYONE WITH AUTHORITY TO ACCEPT BIDS. FURTHERMORE, THIS WAS A SALE OF GOVERNMENT SURPLUS PROPERTY AND, IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE 28 COMP. GEN. 550, 551.

THUS, SO FAR AS THE PRESENT RECORD SHOWS, THE ACCEPTANCE OF THE BID WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, WAS IN GOOD FAITH AND RESULTED IN A VALID AND BINDING CONTRACT. WE THEREFORE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF TO HARRY GORDON SCRAP MATERIALS, INC., ON ITEM NO. 44 OF SPOT BID SALE NO. 15-040-S-59-16.