B-141526, JAN. 15, 1960

B-141526, JAN. 15, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 17, 1959, WITH ENCLOSURES, 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 THE ASSOCIATED DIESEL SERVICE AND EQUIPMENT COMPANY, INC., ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT NO. M60258C-8960 WAS AWARDED.

THE LONG BEACH NAVAL SHIPYARD, TORRANCE ANNEX, TORRANCE, CALIFORNIA, BY INVITATION NO. E-17-60-60258 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF MISCELLANEOUS SURPLUS ITEMS. ITEM 44 COVERED ONE SIX CYLINDER DIESEL ENGINE IN A USED, POOR CONDITION, THE ORIGIN COST OF WHICH WAS STATED TO BE $2,540. IN RESPONSE THE ASSOCIATED DIESEL SERVICE AND EQUIPMENT COMPANY, INC., SUBMITTED A BID OFFERING TO PURCHASE THE DIESEL ENGINE COVERED BY ITEM 44 FOR THE SUM OF $248.48. THE BID OF THE COMPANY WAS ACCEPTED ON NOVEMBER 20, 1959.

BY LETTER DATED NOVEMBER 28, 1959, THE COMPANY ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD INTENDED TO BID ON ITEM 45 INSTEAD OF ITEM 44. THE COMPANY STATED THAT IT DOES NOT HANDLE THE TYPE OF ENGINE COVERED BY ITEM 44 AND IT REQUESTED THAT THE CONTRACT BE CANCELED.

THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDDERS ON ITEM 44 QUOTED PRICES RANGING FROM $79.05 TO $17.56. ALTHOUGH THE BID OF THE ASSOCIATED DIESEL SERVICE AND EQUIPMENT COMPANY, INC., WAS SOMEWHAT HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 44, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY ON THAT 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 UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 368; AND ID. 601. SEE, ALSO, 16 COMP. GEN. 976; 28 ID. 261; AND ID. 550. THE PRESENT RECORD INDICATED THAT THE ACCEPTANCE OF THE BID OF ASSOCIATED DIESEL SERVICE AND EQUIPMENT COMPANY, INC., WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND 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 NOVEMBER 28, 1959, THE ASSOCIATED DIESEL SERVICE AND EQUIPMENT COMPANY, INC., INADVERTENTLY INSERTED THE PRICE INTENDED FOR ITEM 45 OPPOSITE ITEM 44, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 50 F.SUPP. 505, 507.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT DATED DECEMBER 2, 1959, ARE RETURNED.