B-140906, OCT. 22, 1959

B-140906, OCT. 22, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2 L8/L8/NT4-4) DATED OCTOBER 1, 1959, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING A MISTAKE IN BID ALLEGED BY JACOB SOLOMON, SAN DIEGO, CALIFORNIA, ON WHICH SALES CONTRACT NO. N244S 56121 WAS BASED.

BY SALES INVITATION NO. B-116-59-244, DATED MAY 21, 1959, BIDS WERE INVITED FOR THE PURCHASE FROM THE GOVERNMENT OF 92 ITEMS OF SURPLUS PROPERTY LOCATED AT THE U.S. NAVAL SUPPLY DEPOT, SCREENING AND SALVAGE YARD, SAN DIEGO, CALIFORNIA. IN RESPONSE THERETO, JACOB SOLOMON SUBMITTED A BID OFFERING TO PURCHASE 78 OF THE LISTED ITEMS, INCLUDING ITEM NO. 54 AT A UNIT PRICE OF "70 CENTS" FOR 108 UNITS OF MATERIAL DESCRIBED AS FOLLOWS:

"MOUNT, RESILIENT, STEEL RIGID MEMBERS, CADMIUM PLATED FINISH 2 3/8 INCHES LONG, 2 3/8 INCHES WIDE, 12 LB. LOAD. MFG. LORD MFG. CO. CAT. NO. 150PH15. UNUSED, GOOD CONDITION ACQUISITION COST $162.00 N NSA"

TWO OTHER UNIT BIDS OF $0.0221 AND $0.018 WERE ALSO RECEIVED ON ITEM NO. 54. THE SOLOMON BID, BEING THE HIGHEST ON THAT ITEM, WAS ACCEPTED, WITH TWELVE OTHERS, AND INCLUDED ON CONTRACT NO. N244S-56121 AWARDED ON JULY 8, 1959, AT A TOTAL CONTRACT PRICE OF $276.67. THE PURCHASER'S BID DEPOSIT OF $140 WAS APPLIED AGAINST THIS AMOUNT, LEAVING A BALANCE DUE OF $136.67 WHICH WAS PAID ON JULY 14, 1959. THE MATERIAL WAS DELIVERED TO HIM ON THE SAME DATE.

THEREAFTER, BY LETTER DATED JULY 21, 1959, MR. SOLOMON ADVISED THE NAVAL SUPPLY DEPOT THAT HE HAD MADE A MISTAKE IN HIS BID ON ITEM NO. 54 AND THAT HIS INTENDED UNIT BID ON THIS ITEM WAS MEANT TO BE " .07 CENTS AND NOT .70 CENTS," EXPLAINING THAT "IN TRANSFERRING THE BID AMOUNT TO THE TYPED COPY THE AMOUNT OF 7 CENTS WAS TAKEN TO BE 70 CENTS. THE CENT MARK WAS MISTAKEN FOR A O.' HE REQUESTED CANCELLATION OF HIS BID ON ITEM NO. 54, IF THE AMOUNT OF " .07 CENTS" WAS NOT ACCEPTABLE FOR THE ITEM, BUT THAT IF THE AMOUNT OF " .07 CENTS" WAS ACCEPTABLE, THEN REFUND BE MADE OF THE "DIFFERENCE BETWEEN THE PRICE AT 7 CENTS AND 70 CENTS WHICH IS $68.04.'

IN HIS STATEMENT OF FACTS AND RECOMMENDATION, THE CONTRACTING OFFICER STATES THAT AFTER THE ALLEGATION OF ERROR IN BID A PERSONAL CONTACT WITH MR. SOLOMON RESULTED IN THE RETURN OF ITEM NO. 54; ALSO, THAT WITH REGARD TO MR. SOLOMON'S STATEMENT THAT THE ERROR WAS MADE WHEN TRANSFERRED TO ,TYPED COPY" MR. SOLOMON WAS REFERRING TO HIS SUBMITTED COPY; AND THAT HE INDICATED THAT HE DID NOT KEEP HIS WORKSHEET. THE CONTRACTING OFFICER FURTHER STATES THAT THE SUBMITTED COPY, HOWEVER, WAS NOT TYPED AND CLEARLY INDICATES "?70 IN UNIT PRICE.' THE BID AS SUBMITTED AND SIGNED BY MR. SOLOMON SHOWS ALL UNIT PRICES ENTERED IN PEN AND INK AS WELL AS HIS SIGNATURE ON EACH PAGE OF THE BID FORM. IT IS NOW THE OPINION OF THE CONTRACTING OFFICER THAT MR. SOLOMON MADE AN HONEST MISTAKE IN HIS BID AND HE RECOMMENDS THAT RELIEF BE GRANTED BY REFUNDING TO MR. SOLOMON THE DIFFERENCE BETWEEN HIS BID OF $0.70 AND $0.07, THE AMOUNT OF HIS ALLEGED INTENDED BID ON ITEM NO. 54.

WHILE IT MAY BE THAT MR. SOLOMON MADE AN ERROR IN HIS BID, AS CLAIMED, HE HAS NOT SUBMITTED ANY CLEAR AND CONVINCING EVIDENCE SUBSTANTIATING HIS INTENDED BID PRICE TO BE $0.07, AS ALLEGED.

THE QUESTION HERE FOR CONSIDERATION, HOWEVER, 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 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 MR. SOLOMON MAY HAVE MADE IN HIS BID WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO HIS NEGLIGENCE IN THE PREPARATION OF THE BID, THE ERROR, AS ALLEGED, WAS UNILATERAL AND NOT MUTUAL. WITH RESPECT TO THE DIFFERENCE BETWEEN THE SOLOMON BID AND THE OTHER BIDS RECEIVED, IT IS NOTED THAT THE UNIT ACQUISITION COST OF THE ITEM, DESCRIBED AS "UNUSED, GOOD CONDITION," IS $1.50. A BID OF $0.70 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 OF THE PROPERTY INTENDED 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 EITHER ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR THEREIN, WAS IN GOOD FAITH AND RESULTED IN A VALID AND BINDING CONTRACT.

WHILE THE RECORD INDICATED THAT THE CONTRACTING OFFICER CONSENTED TO THE RETURN OF THE MATERIAL IN ITEM NO. 54 BY THE PURCHASER AFTER THE CONTRACT HAD BEEN COMPLETELY PERFORMED, HE HAD NO AUTHORITY TO MAKE SUCH AN AGREEMENT. SEE 28 COMP. GEN. 306, 312, AND CASES CITED THEREIN. CONSEQUENTLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF TO MR. SOLOMON AS TO ITEM NO. 54 ON CONTRACT NO. N244S-56121, AND THE MATERIAL IN QUESTION SHOULD BE RETURNED TO HIM.