B-141569, JAN. 29, 1960

B-141569, JAN. 29, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 24, 1959, WITH ENCLOSURES, FROM DEPUTY THE QUARTERMASTER GENERAL, ON BEHALF OF THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), SUBMITTING FOR CONSIDERATION AND DECISION A REQUEST OF A.L.B.I., PANTIN, PARIS, FRANCE, FOR CANCELLATION OF THE AWARD TO IT OF ITEM NO. 46 ON CONTRACT NO. DA/S) 91-617-EUC-43, BECAUSE OF A MISTAKE IN ITS BID ALLEGED PRIOR TO ACCEPTANCE OF THE BID AND AWARD OF THE CONTRACT BASED THEREON.

BY INVITATION NO. DA-EUC-9-1-617-S-59-8 AND ADDENDUM "A," DATED OCTOBER 31, 1958, THE U.S. ARMY ORDNANCE DEPOT NANCY (M AND M), FRANCE, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF 158 ITEMS OF SURPLUS GOVERNMENT PROPERTY, INCLUDING ITEM NO. 46 CONSISTING OF ONE LOT OF "AUTOMOTIVE AND MHE PARTS," THE TOTAL ACQUISITION COST OF WHICH WAS STATED TO BE $43,982.80. IN RESPONSE THERETO, A.L.B.I. SUBMITTED A BID OFFERING TO PURCHASE 69 OF THE ITEMS LISTED, INCLUDING ITEM NO. 46 AT A PRICE OF 1,435,000 FF FOR THE LOT OF MATERIAL THEREIN, AND A TOTAL BID PRICE OF 11,330,903 FF. A BID DEPOSIT OF 2,500,000 FF, CONSISTING OF FIVE CERTIFIED CHECKS, WAS FORWARDED WITH THE BID. THE ABSTRACT OFFERED BIDS SHOWS THAT FOUR OTHER BIDS, IN THE RESPECTIVE AMOUNTS OF 351,111 FF, 349,000 FF, 300,000 FF, AND 288,880 FF, WERE RECEIVED ON ITEM NO. 46. THE BID OF A.L.B.I. ON ITEM NO. 46, BEING THE HIGHEST, WAS ACCEPTED BY THE PROPERTY DISPOSAL OFFICER ON JANUARY 21, 1959, AND AWARD THEREOF WITH OTHER ITEMS WAS MADE ON CONTRACT NO. DA/S) 91-617-EUC-43 ON THE SAME DATE.

THE CONTRACTING OFFICER REPORTS THAT, ON DECEMBER 2, 1958, WHEN BIDS ON ITEM NO. 46 WERE OPENED AND READ, REPRESENTATIVES OF A.L.B.I. WERE NOT PRESENT BUT THAT THEY ENTERED THE ROOM IMMEDIATELY AFTER THE OPENING OF ALL BIDS FOR THAT ITEM HAD BEEN COMPLETED, AND THAT MR. JEAN SERPOS, A REPRESENTATIVE OF A.L.B.I., BROUGHT TO HIS ATTENTION AN ERROR OF 1,000,000 FF IN HIS FIRM'S BID ON ITEM NO. 46, EXPLAINING THAT THE BID WAS INTENDED TO BE 435,000 FF ONLY, INSTEAD OF 1,435,000 FF APPEARING ON THE BID FORM. THE FIRM CONFIRMED THIS ALLEGATION OF ERROR BY LETTER DATED DECEMBER 2, 1958, TO THE PROPERTY DISPOSAL OFFICER AND, IN SUBSTANTIATION OF THE ERROR, FORWARDED A PHOTOSTATIC COPY OF PAGES 31 AND 73 OF THE BID FORM USED AS ITS WORK SHEET. ON PAGE 31 OF THE WORK SHEET, OPPOSITE ITEM NO. 36, APPEAR PENNED NOTATIONS "VALUE DOLLAR--- 43.582,80" AND "FF- 435.000," AND ON PAGE 73 APPEAR A PENNED NOTATION "FF) 11.330.903" AS THE FIRM'S TOTAL BID PRICE FOR THE 69 ITEMS BID ON,"FF) 2.500.000" AS ITS BID DEPOSIT, AND OTHER NOTATIONS RELATING TO THE DEPOSIT.

THE CONTRACTOR CONTENDS THAT A COMPUTATION OF THE TOTAL OF ITS BID PRICES ON THE 69 ITEMS BID ON WOULD RESULT IN A TOTAL AMOUNT OF FF 11,330,903--- THE AMOUNT APPEARING ON ITS WORK SHEET AND BID FORM--- ONLY IF THE SUM OF"435.000" FF FOR ITEM NO. 46 WERE INCLUDED, AND THAT IF THE AMOUNT OF 1,435,000 FF HAD BEEN INCLUDED ITS TOTAL BID PRICE SHOULD HAVE BEEN 12,330,903 FF. THE FIRM ALSO EXPLAINS THAT A BID DEPOSIT OF 2,500,000 FF, AN AMOUNT IN EXCESS OF THE REQUIRED 20 PERCENT, WAS SUBMITTED BECAUSE IT COULD NOT ARRANGE FOR CERTIFIED CHECKS IN "FRACTIONAL AMOUNTS," SO IT PREFERRED TO DEPOSIT THE GREATER AMOUNT.

THE PROPERTY DISPOSAL OFFICER CONFIRMS A.L.B.I.'S ALLEGATION THAT ITS REPRESENTATIVE, ON DECEMBER 2, 1958, PROMPTLY AFTER THE OPENING OF BIDS ON ITEM NO. 46 HAD BEEN COMPLETED, AND BEFORE HIS ACCEPTANCE OF ITS BID ON JANUARY 20, 1959, CALLED HIS ATTENTION TO AN ERROR IN THE FIRM'S BID, AS NOW ALLEGED, AND ASKED HIM TO CORRECT THE ERROR. HE ALSO REPORTS THAT, FOR THE TYPE OF MATERIAL BEING SOLD UNDER ITEM NO. 46, THE RETURN TO THE GOVERNMENT IS RARELY IN EXCESS OF 5 PERCENT OF THE ACQUISITION COST AND FOR ASSORTED AUTOMOTIVE PARTS OFFERS NORMALLY RANGE BETWEEN 2 TO 4 PERCENT OF THE ACQUISITION COST, AND THAT THE RETURN ON ITEM NO. 46 AT THE ACCEPTED BID IS 7.8 PERCENT. IT IS, THEREFORE, HIS BELIEF--- BASED ON THE PREVIOUS RETURN RATE FOR SIMILAR MATERIAL AND THE FACT THAT THE FIRM'S BID ON ITEM NO. 46 OF 1,435,000 FFWAS GREATLY OUT OF LINE WITH THE SECOND AND THIRD HIGHEST BIDS OF 351,000 FF AND 349,000 FF, RESPECTIVELY--- THAT A.L.B.I. MADE AN HONEST MISTAKE OF 1,000,000 FF IN ITS BID, AS ALLEGED.

BASED ON THE RECORD, THERE IS A SUBSTANTIAL BASIS FOR CONCLUDING THAT A.L.B.L. MADE AN ERROR IN ITS BID ON ITEM NO. 46, AS ALLEGED, AND ALTHOUGH THE ERROR WAS UNILATERAL--- BEING DUE SOLELY TO THE FIRM'S CARELESSNESS IN PREPARING ITS BID AND IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT--- THAT THE ACCEPTANCE OF THE BID AND AWARD OF SALE ITEM NO. 46 DID NOT CONSUMMATE A VALID AND BINDING CONTRACT SINCE IT IS APPARENT THAT THE PROPERTY DISPOSAL OFFICER HAD ACTUAL NOTICE OF SUCH ERROR TO HIS ACCEPTANCE OF THE BID AND AWARD OF THE CONTRACT.

CONSEQUENTLY, THE AWARD OF THE SALE OF ITEM NO. 46 MAY BE CANCELLED FROM CONTRACT NO. DA/S) 91-617-EUC-43 AND, SINCE IT IS REPORTED THAT THE PROPERTY IN QUESTION IS STILL IN POSSESSION OF THE GOVERNMENT, REFUND OF THE PURCHASE PRICE IN THE AMOUNT PAID BY A.L.B.I. FOR THE ITEM MAY BE MADE TO IT.

THE FILE FORWARDED WITH LETTER OF DECEMBER 24 IS RETAINED AS A PART OF OUR RECORDS.