B-141987, APR. 5, 1960

B-141987, APR. 5, 1960

TO MR. WARREN J. BECKER:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF FEBRUARY 5, 1960, PROTESTING AGAINST AN AWARD OF 127,400 POUNDS OF STEEL STRAPPING TO FRED SCHWARTZ UNDER ITEM NO. 225 OF PUBLIC AUCTION SALE NO. AVI-04-513 S-70-20 HELD AT SHARPE GENERAL DEPOT, LATHROP, CALIFORNIA, ON FEBRUARY 3, 1960.

IT IS YOUR CONTENTION THAT THE AWARD TO FRED SCHWARTZ OF ITEM NO. 225 AT $0.0675 PER POUND WAS IN ERROR SINCE THE BID OF $0.0675 PER POUND WHICH WAS ACCEPTED BY THE AUCTIONEER WAS, IN FACT, MADE BY YOU AND NOT BY FRED SCHWARTZ.

PARAGRAPH 19 OF THE SPECIAL TERMS AND CONDITIONS OF THE SALE PROVIDES IN PERTINENT PART AS FOLLOWS:

"19. SUBMISSION OF BIDS: PURCHASERS WILL COMMUNICATE THE AMOUNT OF THEIR BID FOR EACH ITEM OR LOT TO THE AUCTIONEER, EITHER ORALLY OR BY SUCH MEANS AS MAY BE SPECIFIED BY THE AUCTIONEER AT THE TIME OF THE COMMENCEMENT OF THE SALE.

"B. AT THE AUCTIONEER'S ACKNOWLEDGMENT OF THE HIGHEST BID, THE SUCCESSFUL BIDDER WILL BE REQUIRED TO CONFIRM HIS BID IN WRITING, UPON PRESENTATION OF ACKNOWLEDGMENT CARD. THE GOVERNMENT WILL DETERMINE THE SUCCESSFUL PURCHASER FROM THESE OFFICIAL RECORDS OF THE SALE.

"C. ONCE A LOT OR ITEM IS KNOCKED DOWN TO A PURCHASER, HIS BID MAY NOT BE WITHDRAWN. THE GOVERNMENT WILL FURNISH A WRITTEN NOTICE OF AWARD WHICH WILL BE THE PURCHASER'S AUTHORITY TO REMOVE THE PURCHASED MATERIAL FROM THE GOVERNMENT'S PREMISES UPON FULL PAYMENT OF THE PURCHASE PRICE.'

UNDER THESE PROVISIONS, THE SUCCESSFUL BIDDER IS THE ONE WHO FIRST COMMUNICATES THE HIGHEST BID TO THE AUCTIONEER BY SUCH MEANS AS MAY BE SPECIFIED BY THE AUCTIONEER. ONCE A HIGH BID IS ACKNOWLEDGED BY THE AUCTIONEER, IT CONSTITUTES ACCEPTANCE OF THE BIDDER'S OFFER AND IS BINDING ON BOTH PARTIES. 7 C.G.S. AUCTIONS AND AUCTIONEERS,SECTION 7 (E) (3). ANY EVENT, THE BID WHEN COMMUNICATED TO THE AUCTIONEER IS ONLY AN OFFER TO BUY AND REMAIN AS SUCH UNTIL ACCEPTED IN ACCORDANCE WITH THE TERMS OF THE SALE. IN THE CASE OF J. J. SUGARMAN CO. V. DAVIS, 203 F.2D 931, IT WAS HELD THAT:

"WHERE ONE'S BID HAS BEEN ACCEPTED, HE HAS A VESTED INTEREST WHICH UNDER THE DECISIONS MAY BE DESTROYED ONLY FOR THE MOST COGENT OF REASONS, SUCH AS FRAUD, OR CONDUCT WHICH IN EFFECT AMOUNTS TO FRAUD.'

THE QUESTION INVOLVED HERE, THAT IS, WHOSE BID SHOULD HAVE BEEN PROPERLY ACCEPTED BY THE AUCTIONEER, IS ONE OF FACT. UNDER SUCH CIRCUMSTANCE, THE REPORT OF THE ADMINISTRATIVE OFFICE INVOLVED NECESSARILY MUST BE GIVEN GREAT WEIGHT AND, IN THE ABSENCE OF CONVINCING EVIDENCE TO THE CONTRARY, WILL BE ACCEPTED AS CONCLUSIVE BY OUR OFFICE. WE BELIEVE THAT THE FOLLOWING EXTRACTS FROM THE REPORT OF THE DEPARTMENT OF THE ARMY CONCLUSIVELY ESTABLISH THAT THE AWARD AS MADE WAS PROPER IN THE LIGHT OF ALL THE FACTS AND CIRCUMSTANCES.

"2. ITEM NO. 225 OF SUBJECT SALE CONSISTED OF THE FOLLOWING:

ITEM NO.

225. 277,400 LBS. STEEL STRAPPING, FLAT, 3/8 INCHES WIDE,

0.020 THICK, NAIL-LESS TYPE, ZINC COATED

FINISH, UNUSED, IN COILS, APPROX. WT.

279,482 LBS., T.C. $27,740.00

PRIOR TO THE SALE OF THE QUANTITY IN QUESTION, THE FOLLOWING QUANTITIES HAD BEEN AUCTIONED AT THE FOLLOWING PRICES:

10,000 LBS. --------------------------------- $0.09 PER POUND

100,000 LBS. --------------------------------- $0.075 PER POUND

40,000 LBS. --------------------------------- $0.075 PER POUND

THE AUCTIONEER THEN ANNOUNCED THAT THE REMAINING QUANTITY, 127,400 POUNDS, WOULD BE AUCTIONED OFF IN ONE LOT.

"3. IMMEDIATELY UPON THE AUCTIONEER KNOCKING DOWN THE LOT TO BIDDER NO. 64, FRED SCHWARTZ, AT $0.0675 PER POUND, THE PROTESTANT, WHO WAS SITTING CLOSE TO THE AUCTIONEER'S PLATFORM, JUMPED UP AND VERBALLY PROTESTED AN AWARD TO FRED SCHWARTZ CLAIMING THAT THE BID OF $0.0675 WAS THE PROTESTANT'S BID. AT THE SAME TIME, FRED SCHWARTZ WHO HAD BEEN BIDDING FROM A POINT FARTHER TO THE REAR OF THE BID ROOM HURRIED TO THE AUCTIONEER'S PLATFORM TO ASSERT THAT THE SUPPLIES HAD BEEN PROPERLY KNOCKED DOWN TO HIM, FRED SCHWARTZ. SUBSEQUENT TO THE SALE MR. BECKER, THE PROTESTANT, CONTINUED TO INSIST TO THE CONTRACTING OFFICER THAT THE SUPPLIES SHOULD HAVE BEEN AWARDED TO HIM. THE DAY FOLLOWING THE AUCTION, THE PROTESTANT TELEPHONED THE CONTRACTING OFFICER AND INSISTED UPON KNOWING WHETHER THE CONTRACTING OFFICER WAS GOING TO PROCEED WITH THE AWARD TO FRED SCHWARTZ.

"4. THE CONTRACTING OFFICER THEN TELEPHONED THE AUCTIONEER, WINFRED HINKLEY, ARMY PROPERTY DISPOSAL CENTER, CAMERON STATION, ALEXANDRIA, VIRGINIA, WHO WAS REACHED AT BENICIA ARSENAL, CALIFORNIA, AND WAS QUESTIONED AS TO HIS RECOLLECTION OF THE INCIDENT. THE AUCTIONEER STATED THAT HE CLEARLY REMEMBERED THAT FRED SCHWARTZ, BIDDER NO. 64, HAD SIGNALLED A BID OF $0.0675 PER POUND. THE CONTRACTING OFFICER ADVISED THE AUCTIONEER THAT DURING THE DAY OF THE AUCTION AND DURING SUBSEQUENT TELEPHONE CONVERSATIONS MR. BECKER ALSO REPEATED THE ALLEGATION IN SUPPORT OF HIS POSITION THAT THE AUCTIONEER HAD BEEN LOOKING AT HIM ALL THE TIME THE AUCTIONEER HAD BEEN CHANTING $0.0675 AND ASKING FOR $0.07 PER POUND.

"5. THE AUCTIONEER STATED THAT HAVING RECOGNIZED THE BID OF $0.0675 FROM MR. SCHWARTZ, BIDDER NO. 64, IN THE REAR OF THE ROOM AND HAVING RECALLED THAT MR. BECKER HAD MADE A PRIOR BID, THE AUCTIONEER KEPT LOOKING AT MR. BECKER AND CHANTING FOR A BID OF $0.07 FROM MR. BECKER. THE AUCTIONEER POINTED OUT THAT THE FACT THAT HE WAS STARING AT MR. BECKER MADE IT OBVIOUS THAT HE HAD NOT RECOGNIZED A BID OF $0.0675 FROM MR. BECKER SINCE HAD HE RECOGNIZED A BID OF $0.0675 FROM MR. BECKER HE WOULD NOT BE STARING AT HIM TO OVERRIDE HIS OWN BID BUT WOULD HAVE BEEN LOOKING AT OTHER INTERESTED BIDDERS.

"6. THE UNDERSIGNED THEN PLAYED BACK THE TAPE RECORDING OF THE AUCTION. DESPITE THE PROTESTANT'S STATEMENT THAT THE TAPE "WOULD PROVE NOTHING," PORTIONS OF THE TAPE DIRECTLY SUPPORT THE AUCTIONEER'S STATEMENT. THE FOLLOWING IS A TRANSCRIPT OF THE TAPE AT THE POINT THAT THE BIDDING WENT FROM $0.0650 TO $0.0675:

" ". . . NOW SIX AND A HALF, SIX AND A HALF AND NOW I HEAR SEVENTY FIVE. SIX SEVENTY-FIVE, IS THAT RIGHT? SIX SEVENTY-FIVE NOW SEVEN--- -- SIX SEVENTY-FIVE AND NOW I WANT TO GO SEVEN. DOWN HERE YOU WANT TO MAKE IT SEVEN? SIX SEVENTY-FIVE, YOU WANT TO GO SEVEN DOWN HERE? YOU WANT TO MAKE---- HOLD IT. SIX SEVENTY-FIVE, DID I HEAR SEVEN CENTS, WHERE? (KNOCK OF GAVEL) SIX SEVENTY-FIVE. THE BIDDER IS 64. OH, NO, NO, I WAS WATCHING YOU CLOSE BOY. HOLD IT, ALL RIGHT, HOLD IT JUST A MINUTE . . .'

"7. IT IS SIGNIFICANT THAT FROM THE TRANSCRIPT IT APPEARS THAT THE AUCTIONEER, AFTER HE RECEIVED A BID OF $0.0675 (". . . AND NOW I HEAR SIX SEVENTY-FIVE"), THEN VERIFIED THE BID BY ASKING,"SIX SEVENTY-FIVE, IS THAT RIGHT? " THIS SUPPORTS THE RECOLLECTION OF THE AUCTIONEER THAT IT WAS THE $0.0675 BID OF BIDDER NO. 64 WHICH WAS RECOGNIZED BY THE AUCTIONEER SINCE THE AUCTIONEER VERIFIED THE BID. THE TRANSCRIPT FURTHER SUPPORTS THE AUCTIONEER'S STATEMENT THAT HE WAS STARING AT MR. BECKER IN ORDER TO GET A BID OF $0.07 FROM THE PORTION WHICH STATES,"DOWN HERE YOU WANT TO MAKE IT SEVEN? SIX SEVENTY-FIVE, YOU WANT TO GO TO SEVEN DOWN HERE? " SINCE MR. BECKER WAS SITTING CLOSE TO THE AUCTIONEER'S PLATFORM, IT CAN BE CONCLUDED, WHEN TAKEN IN CONNECTION WITH THE STATEMENT OF THE AUCTIONEER OF HIS RECOLLECTION OF THE CIRCUMSTANCES, THAT HE WAS ADDRESSING MR. BECKER WHEN HE SAID "DOWN HERE.' THE AUCTIONEER'S RECOLLECTION IS FURTHER SUPPORTED BY THAT PORTION OF THE TRANSCRIPT WHICH STATES,"OH, NO, NO, I WAS WATCHING YOU CLOSE BOY" WHICH THE AUCTIONEER STATES WAS HIS IMMEDIATE REPLY WHEN MR. BECKER JUMPED UP TO PROTEST THE AWARD TO BIDDER NO. 64.

"8. IT IS POSSIBLE THAT MR. BECKER IN FACT SIGNALLED OR ATTEMPTED TO SIGNAL TO THE AUCTIONEER A BID OF $0.0675. THE FACT REMAINS, HOWEVER, BASED UPON THE AUCTIONEER'S RECOLLECTION, THAT BIDDER NO. 64, MR. SCHWARTZ, BID $0.0675 AND THAT IT WAS BIDDER NO. 64'S BID OF $0.0675 WHICH WAS RECOGNIZED BY THE AUCTIONEER. IT IS TO BE EXPECTED THAT SEVERAL BIDDERS WILL BID THE SAME PRICE AT THE SAME TIME BUT THE AUCTIONEER CAN TAKE ONLY ONE OF THEM. EVEN GRANTING THEM THAT MR. BECKER MAY HAVE BID $0.0675 IT WAS NOT HIS BID WHICH WAS RECOGNIZED BY THE AUCTIONEER.

"9. MR. BECKER ASSERTS, IN EFFECT, NOT ONLY THAT HE WAS NOT AWARE OF THIS BUT THAT HE FIRMLY BELIEVED THAT IT WAS HIS BID WHICH THE AUCTIONEER HAD RECOGNIZED. THIS IS REFUTED BY THE AUCTIONEER'S RECOLLECTION NOT ONLY OF RECOGNIZING THE BID OF BIDDER NO. 64 BUT, AS SHOWN ON THE TRANSCRIPT, VERIFYING THAT BID. BIDDER NO. 64 WAS IN THE REAR OF THE ROOM. MR. BECKER WAS IN THE FRONT OF THE ROOM. MR. BECKER WOULD HAVE NO BASIS TO ASSUME THAT IT WAS HIS BID WHICH HAD BEEN RECOGNIZED UNDER THESE CIRCUMSTANCES. THIS IS FURTHER ESTABLISHED BY THE FACT THAT THE AUCTIONEER KEPT "LOOKING AT" MR. BECKER WHILE CHANTING FOR A HIGHER BID. AS NOTED ABOVE, IF THE AUCTIONEER HAD ACCEPTED MR. BECKER'S BID OF $0.0675 HE WOULD NOT HAVE LOOKED TO MR. BECKER TO INCREASE HIS OWN BID TO $0.07 AND MR. BECKER SHOULD HAVE RECOGNIZED THIS FACT AS A FURTHER INDICATION THAT MR. BECKER'S BID OF $0.0675 HAD NOT BEEN TAKEN UP BY THE AUCTIONEER. THE AUCTIONEER'S RECOLLECTION IS FURTHER SUPPORTED BY THE PORTION OF THE TAPE WHICH STATES,"OH, NO, NO, I WAS WATCHING YOU CLOSE BOY" WHICH STATEMENT, MADE BY THE AUCTIONEER IMMEDIATELY IN THE HEAT OF THE PROTEST BY MR. BECKER, AT THE MOMENT THE SUPPLIES WERE KNOCKED DOWN TO BIDDER NO. 64, FURTHER SUPPORTS THE CONCLUSION THAT THE AUCTIONEER CLEARLY KNEW THAT IT WAS NOT MR. BECKER'S BID OF $0.0675 BUT THE BID OF MR. SCHWARTZ, BIDDER NO. 64, OF $0.0675 WHICH THE AUCTIONEER HAD RECOGNIZED.

"10. BASED UPON THE FACTS RELATED ABOVE, SECURED BOTH FROM THE TELEPHONE CONVERSATION WITH THE AUCTIONEER AND THE TAPE RECORDING OF THE AUCTIONEER'S VOICE, THE UNDERSIGNED CONCLUDES THAT THE AUCTION OF THIS ITEM WAS CONDUCTED PROPERLY AND THAT THE RECOGNIZED HIGH BID OF $0.0675 WAS THAT OF BIDDER NO. 64 AND THAT THE SUPPLIES WERE PROPERLY KNOCKED DOWN TO BIDDER NO. 64.

"1. ON WEDNESDAY, 10 FEBRUARY 1960, MR. SCHWARTZ TELEGRAPHED A REQUEST THAT THE SUPPLIES BE DELIVERED TO HIS REPRESENTATIVE. ON THE SAME DATE MR. SCHWARTZ- REPRESENTATIVE APPEARED AT THE PROPERTY DISPOSAL OFFICE AND TENDERED A CERTIFIED CHECK FOR THE FULL BALANCE DUE. AS OF THE CLOSE OF BUSINESS ON THURSDAY, 11 FEBRUARY 1960, THE SUPPLIES HAD BEEN DELIVERED IN THEIR ENTIRETY AND HAULED AWAY.'

ACCORDINGLY, YOU ARE ADVISED THAT OUR OFFICE WILL NOT OBJECT TO THE AWARD OF ITEM NO. 225 UNDER THE SUBJECT SALE.