B-141946, MAR. 31, 1960

B-141946, MAR. 31, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 8, 1960, FILE R11.2, FROM THE ASSISTANT CHIEF FOR PURCHASING, WITH ENCLOSURES, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY MR. GEORGE M. HAYWARD, KANSAS CITY, MISSOURI, TO HAVE BEEN MADE IN HIS BID SUBMITTED IN RESPONSE TO SITE SALES LETTER NO. SSL-17-60-60258 ISSUED BY LONG BEACH NAVAL SHIPYARD, TORRANCE, CALIFORNIA, FOR THE SALE OF SURPLUS PROPERTY.

THE SALES LETTER REQUESTED BIDS--- TO BE OPENED JANUARY 7, 1960--- ON 27 ITEMS OF SURPLUS PROPERTY DESCRIBED THEREIN. ITEMS NOS. 1 AND 2 WERE DESCRIBED AS FOLLOWS:

"1. KAPOK-FILLED LIFE PRESERVES 1 LOT

(MUTILATED). (18 PALLETS)

LOOSE ON PALLETS

"2. ANTI-FREEZE, ETHLYENE GLYCOL,

APPROX. 14 UNSEALED 53 GAL DRUMS. 1 LOT

(5 PALLETS)

LOOSE ON PALLETS.'

IN RESPONSE TO THE SALES LETTER, GEORGE M. HAYWARD SUBMITTED A BID OF $267.40 ON ITEM NO. 1. THE ONLY OTHER BID RECEIVED ON THAT ITEM WAS IN THE AMOUNT OF $10. THE BIDS RECEIVED ON ITEM NO. 2 RANGED FROM $14.14 TO $629.99. ON JANUARY 8, 1960, THE HAYWARD BID WAS ACCEPTED AS TO ITEM NO. 1 (CONTRACT NO. N60258S-9157). IN HIS LETTER DATED JANUARY 18, 1960, TO LONG BEACH NAVAL SHIPYARD, MR. HAYWARD STATED THAT HIS RECORD SHOWED THAT HE HAD BID ON ITEM NO. 2 AS INTENDED AND NOT ON ITEM NO. 1. HE STATED ALSO THAT HE WOULD NOT HAVE HAD ANY INTEREST IN KAPOK-FILLED LIFE PRESERVERS SUCH AS DESCRIBED IN ITEM NO. 1 AT ANY PRICE AND HE REQUESTED THAT THE AWARD BE CANCELED. WITH HIS LETTER HE ENCLOSED A SHEET STATED TO BE FROM HIS BID RECORD BOOK INDICATING THAT HE INTENDED TO SUBMIT A BID OF APPROXIMATELY $267 ON ITEM NO. 2 (ANTI-FREEZE).

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER MR. HAYWARD MADE A MISTAKE IN HIS BID BUT WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT. THE INVITATION WAS CLEAR AS TO THE MATERIALS COVERED BY THE VARIOUS ITEMS AND THEREFORE ANY ERROR WAS DUE SOLELY TO THE NEGLIGENCE OF MR. HAYWARD IN TRANSFERRING HIS COMPUTATIONS FROM HIS WORKSHEET TO THE BID SUBMITTED AND SUCH ERROR WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THE BID SUBMITTED WAS UNAMBIGUOUS AND THERE WAS NOTHING ON ITS FACE TO INDICATE THAT THE PRICE QUOTED THEREON FROM ITEM NO. 1 WAS INTENDED FOR ITEM NO. 2.

ALTHOUGH THE HAYWARD BID WAS MUCH HIGHER THAN THE ONLY OTHER BID RECEIVED ON ITEM NO. 1, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SOGREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID. IN THE FIRST PLACE WHERE ONLY TWO BIDS ARE RECEIVED WHICH VARY WIDELY IN AMOUNT THERE IS ORDINARILY NO BASIS FOR DETERMINING WHICH OF THE TWO BIDS MAY BE OUT OF LINE. FURTHERMORE, 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 TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO BE MADE OF THE PROPERTY BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT DESIRE TO TAKE. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; ID. 601. IN THE SABIN CASE, SUPRA, THE PRICE DISPARITY ON THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. THE COURT, AT PAGE 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID OF GEORGE M. HAYWARD WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. ANY ERROR THAT WAS MADE IN THE BID OF MR. HAYWARD WAS UNILATERAL--- NOT MUTUAL --- AND DOES NOT ENTITLE HIM TO RELIEF FROM HIS 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.

FOR THE REASONS ABOVE SET FORTH, THE AWARD TO MR. HAYWARD MAY NOT BE CANCELLED.

THE PAPERS TRANSMITTED WITH THE LETTER OF FEBRUARY 8, 1960, ARE RETURNED HEREWITH.