B-141605, JAN. 15, 1960

B-141605, JAN. 15, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 30, 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 PACIFIC DIESEL SALES CO. ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT NO. N2228S-42889 IS BASED.

THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, BY INVITATION NO. B 70-60- 228 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, 475 GALLONS OF ACID AND RESISTING PAINT, ITEM 1B. IN RESPONSE THE PACIFIC DIESEL SALES CO. SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, THE PAINT COVERED BY ITEM 1B AT A PRICE OF ?93 PER GALLON. THE BID OF THE COMPANY WAS ACCEPTED ON OCTOBER 30, 1959, AND ON NOVEMBER 2, 1959, A NOTICE OF AWARD WAS MAILED TO THE COMPANY.

IN A LETTER DATED NOVEMBER 2, 1959, IN WHICH IT REQUESTED THAT ITEM 1B OF THE CONTRACT BE CANCELED, THE PACIFIC DIESEL SALES CO. ADVISED THE CONTRACTING OFFICER THAT IT HAD MADE AN ERROR IN ITS BID IN THAT IT HAD INTENDED TO BID ON ITEM 2 INSTEAD OF ITEM 1B. TO SUBSTANTIATE ITS STATEMENT THAT IT HAD INTENDED TO BID ON ITEM 2, THE COMPANY SUBMITTED A COPY OF A LETTER DATED OCTOBER 13, 1959, WHICH IT HAD RECEIVED FROM A SURPLUS DEALER IN GUAM AT WHOSE REQUEST IT HAD SUBMITTED THE BID. THE LETTER OF OCTOBER 13, 1959, INDICATES THAT THE COMPANY WAS INSTRUCTED TO SUBMIT A BID ON ITEM 2 AND CERTAIN OTHER ITEMS, NOT INCLUDING ITEM 1B. LETTER DATED NOVEMBER 5, 1959, THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE WAS WITHOUT AUTHORITY TO CANCEL ITEM 1B ON THE BASIS OF ITS LETTER OF NOVEMBER 2, 1959, BECAUSE A COPY OF THE CONTRACT AWARDING THE FIRM ITEMS 1B AND 6 WAS FORWARDED TO THEM PRIOR TO THE RECEIPT OF THEIR LETTER. THE COMPANY WAS ADVISED, HOWEVER, THAT IF IT WISHED, ITS CLAIM FOR RELIEF WOULD BE PROCESSED TO HIGHER AUTHORITY FOR CONSIDERATION.

THE ABSTRACT OF BIDS SHOWS THAT THE 12 OTHER BIDDERS ON ITEM 1B QUOTED PRICES RANGING FROM ?011 PER GALLON TO ?27117 PER GALLON. ALTHOUGH THE BID OF PACIFIC DIESEL SALES CO. WAS SOMEWHAT HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM 1B, 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 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 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. 388; AND ID. 601. SEE, ALSO, 16 COMP. GEN. 976; 28 ID. 261; AND ID. 550. THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF PACIFIC DIESEL SALES CO. 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 2, 1959, THE PACIFIC DIESEL SALES CO. INADVERTENTLY INSERTED THE PRICE INTENDED FOR ITEM 2 OPPOSITE ITEM 1B, 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, 56 F.SUPP. 505, 507.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S UNDATED STATEMENT, ARE RETURNED.