B-140945, OCT. 19, 1959

B-140945, OCT. 19, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 7, 1959, WITH ENCLOSURES, FILE R11.2 L8 L8/NT4-28, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH ENGINEERING SPECIALTY SALES COMPANY ALLEGES IT MADE ON ITEM 33 OF ITS BID, ON WHICH SALES CONTRACT NO. N228S- 39461, DATED MAY 12, 1959, IS BASED.

THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, BY SALES LETTER NO. SL-33- 59-228, DATED APRIL 16, 1959, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF ELECTRICAL AND ELECTRONIC SUPPLIES AND CERTAIN MISCELLANEOUS ITEMS AS DESCRIBED THEREIN. IN RESPONSE THERETO, ENGINEERING SPECIALTY SALES COMPANY SUBMITTED A BID DATED MAY 7, 1959, ON SEVERAL ITEMS, INCLUDING A BID OF $158 ON LOT 33, CONSISTING OF RESISTORS. THE COMPANY'S BID ON LOT 33 AND OTHER LOTS WAS ACCEPTED ON MAY 12, 1959.

BY LETTER OF MAY 27, 1959, THE CONTRACTOR ADVISED THE NAVAL SUPPLY CENTER THAT THE MATERIAL AWARDED AS LOT 33 WAS NOT REMOVED DUE TO ERROR IN INSPECTING THE MATERIAL. THE CONTRACTOR ALLEGED THAT A PALLET OF LOT 34 MATERIAL WAS ASSUMED TO BE PART OF LOT 33. ALSO, HE STATED THAT THE ,ERROR WAS UNDOUBTEDLY MADE BECAUSE OF THE EASE OF CONFUSING AND RUNNING THE LOTS TOGETHER; OWING TO THEIR PHYSICAL CLOSENESS, AND THE FACT THAT THEY ARE MARKED ON THE BOTTOM OF THE PALLETS, BETWEEN THE PALLETS AND NOT ON THE OUTSIDE, VISIBLE EDGE, IN MOST INSTANCES.' THE CONTRACTOR REQUESTED RELEASE FROM THE OBLIGATION OF REMOVING LOT 33.

THE CONTRACTING OFFICER BY LETTER DATED JUNE 1, 1959, ADVISED THE COMPANY THAT IN ACCORDANCE WITH PARAGRAPH 18 OF THE GENERAL SALES TERMS AND CONDITIONS OF ITS BID, 20 PERCENT OF ITEM 33 OR $31.60, WAS BEING RETAINED FROM THE PURCHASE PRICE AS LIQUIDATED DAMAGES AND THAT THE BALANCE OF THE PURCHASE PRICE WOULD BE REFUNDED TO IT WITHIN A FEW DAYS. THE BALANCE OF THE PURCHASE PRICE, OR $126.40, WAS PAID THE CONTRACTOR ON JUNE 3, 1959.

IN CONNECTION WITH THE COMPANY'S STATEMENT THAT THE MATERIAL WAS NOT PROPERLY MARKED, THE CONTRACTING OFFICER REPORTED THAT LOTS 33 AND 34 WERE SEPARATED APPROXIMATELY 18 INCHES WITH A 2-FOOT AISLE ON EACH SIDE OF THE LOTS; THAT ORANGE CARDS APPROXIMATELY 11 INCHES BY 6 INCHES, STENCILLED IN ONE INCH BLACK INK BEARING SALES LETTER AND LOT NUMBERS, WERE USED TO IDENTIFY LOTS 33 AND 34; AND THAT THE IDENTIFYING CARDS WERE AFFIXED TO THE FRONT, REAR AND ON THE TOP OF THE PALLET COLLARS IN READY VIEW OF THE BIDDERS. THUS, IT APPEARS THAT THE MATERIAL WAS WELL MARKED.

THE ABSTRACT OF BIDS SHOWS THAT SIX OF THE SEVEN OTHER BIDDERS ON ITEM 33 QUOTED PRICES RANGING FROM $10 TO $38.22. THE HIGHEST BID RECEIVED ON ITEM 34, CONSISTING OF THE SAME TYPE MATERIAL, WAS $126. THIS BID WAS IN LINE WITH THE COMPANY'S BID ON ITEM 33. ALTHOUGH THE COMPANY'S BID ON ITEM 33 WAS SOMEWHAT HIGHER THAN THE OTHER BIDS RECEIVED ON THAT ITEM, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE COMPANY'S BID ON THE ITEM. 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 FROM THE GOVERNMENT, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; 28 ID. 261; ID. 550. THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF ENGINEERING SPECIALTY SALES COMPANY WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 C.CLS. 120, 163. IF, AS STATED IN ITS LETTER OF MAY 27, 1959, THE ENGINEERING SPECIALTY SALES COMPANY INADVERTENTLY ASSUMED THAT PART OF THE MATERIAL INCLUDED IN ITEM 34 WAS INCLUDED IN ITEM 33, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL., 93 U.S. 55, 61. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL- -- NOT MUTUAL--- AND THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE APPEARS TO BE NO LEGAL BASIS FOR REFUNDING TO ENGINEERING SPECIALTY SALES COMPANY THE AMOUNT WITHHELD FROM THE SALES PRICE OF ITEM 33 BY THE ADMINISTRATIVE OFFICE AS LIQUIDATED DAMAGES IN ACCORDANCE WITH THE TERMS OF ITS BID.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACT AND RECOMMENDATION, DATED JULY 21, 1959, ARE RETURNED.