B-142084, MAY 25, 1960

B-142084: May 25, 1960

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TO THE SECRETARY OF THE AIR FORCE: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 18. IT IS SHOWN THAT AT LEAST SIX BIDS WERE RECEIVED FOR ITEM 40. WAS NOTIFIED OF THE AWARD TO IT OF ITEM 40 AT THE INDICATED PRICE OF $2. IT IS REPORTED THAT UPON RECEIPT OF THE NOTIFICATION OF AWARD. THE CONTRACTOR IMMEDIATELY CONTACTED THE CONTRACTING OFFICER AND ADVISED HIM THAT ITS BID ON ITEM 40 WAS A MISTAKE IN THAT IT INTENDED ITS BID ON ITEM 42. THE ALLEGED ERROR WAS CONFIRMED BY LETTER OF NOVEMBER 24. IT WAS POINTED OUT IN THE LETTER OF FEBRUARY 18. IT WAS STATED. THAT THE ABSTRACT OF BIDS LENDS CREDENCE TO THE ALLEGED MISTAKE TO THE EXTENT THAT THE BID SUBMITTED BY THE CONTRACTOR FOR ITEM 40 IS FAR GREATER THAN ALL OTHER BIDS RECEIVED AND MUCH OUT OF LINE WITH THOSE OTHER BIDS.

B-142084, MAY 25, 1960

TO THE SECRETARY OF THE AIR FORCE:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 18, 1960 (AFMPP-PR-3), WITH ENCLOSURES, FROM THE DIRECTORATE OF PROCUREMENT AND PRODUCTION, HEADQUARTERS, UNITED STATES AIR FORCE, RELATING TO A MISTAKE IN BID ALLEGED BY LIBERTY ELECTRONICS, INC., 119 PRINCE STREET, NEW YORK 12, NEW YORK, AFTER THE AWARD OF A CONTRACT UNDER SPOT BID SALE 60-4X, CONDUCTED BY THE DAYTON AIR FORCE DEPOT, GENTILE AIR FORCE STATION, DAYTON, OHIO.

THE RECORD SHOWS THAT THE INVITATION FOR BIDS ISSUED IN CONNECTION WITH THE ABOVE SALE SOLICITED BIDS ON 115 ITEMS OF MISCELLANEOUS ELECTRIC AND ELECTRONIC PARTS AND EQUIPMENT. ITEM 40 CONSISTED OF ONE LOST OF MISCELLANEOUS EQUIPMENT AND ITEM 42 CONSISTED OF ONE LOT OF MISCELLANEOUS TEST EQUIPMENT. IT IS SHOWN THAT AT LEAST SIX BIDS WERE RECEIVED FOR ITEM 40, THE HIGHEST BEING THAT SUBMITTED BY LIBERTY ELECTRONICS, INC., IN THE AMOUNT OF $2,160. THE REMAINING FIVE BIDS RANGED FROM $267 TO $445.15. BY LETTER OF NOVEMBER 13, 1959, LIBERTY ELECTRONICS, NC., WAS NOTIFIED OF THE AWARD TO IT OF ITEM 40 AT THE INDICATED PRICE OF $2,160.

IT IS REPORTED THAT UPON RECEIPT OF THE NOTIFICATION OF AWARD, THE CONTRACTOR IMMEDIATELY CONTACTED THE CONTRACTING OFFICER AND ADVISED HIM THAT ITS BID ON ITEM 40 WAS A MISTAKE IN THAT IT INTENDED ITS BID ON ITEM 42. THE ALLEGED ERROR WAS CONFIRMED BY LETTER OF NOVEMBER 24, 195O, IN WHICH THE CONTRACTOR EXPLAINED THE MISTAKE BY STATING THAT IT HAD INADVERTENTLY SWITCHED THE AMOUNT OF THE BIDS IT INTENDED TO MAKE ON ITEM 40 TO ITEM 42, AND VICE VERSA. HOWEVER, THE RECORD DOES NOT INDICATE THAT LIBERTY ELECTRONICS, INC., EVER SUBMITTED A BID AS TO ITEM 42. IT WAS POINTED OUT IN THE LETTER OF FEBRUARY 18, 1960, THAT EXCEPT FOR THE LETTER OF NOVEMBER 24, 1959, THE CONTRACTOR HAS SUBMITTED NO EVIDENCE IN SUPPORT OF ITS CLAIM OF MISTAKE. IT WAS STATED, HOWEVER, THAT THE ABSTRACT OF BIDS LENDS CREDENCE TO THE ALLEGED MISTAKE TO THE EXTENT THAT THE BID SUBMITTED BY THE CONTRACTOR FOR ITEM 40 IS FAR GREATER THAN ALL OTHER BIDS RECEIVED AND MUCH OUT OF LINE WITH THOSE OTHER BIDS; ALSO, ON THE OTHER HAND, THE BID OF $2,160 IS CONSISTENT WITH AND IN LINE WITH THE OTHER BIDS RECEIVED FOR ITEM 42.

UPON THE BASIS OF THE INFORMATION AVAILABLE FROM THE RECORD IN THIS CASE, IT IS INDICATED IN THE LETTER OF FEBRUARY 18, 1960, THAT YOUR DEPARTMENT DOES NOT FEEL JUSTIFIED IN RECOMMENDING FAVORABLE CONSIDERATION OF THE CONTRACTOR'S REQUEST FOR RELIEF. THE CONTRACTING OFFICER'S STATEMENT OF DECEMBER 8, 1959, DOES NOT INDICATE WHETHER HE SUSPECTED AN ERROR IN THE BID SUBMITTED BY LIBERTY ELECTRONICS, INC.-- HE MERELY STATED THAT HE COULD NOT DETERMINE WHETHER THE EXTREMELY HIGH BID OF THAT CONCERN ON ITEM 40 WAS DUE TO CLERICAL ERROR. HE MADE NO RECOMMENDATION RESPECTING THE CONTRACTOR'S REQUEST FOR RELIEF.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE OF IT. SALIGMAN V. UNITED STATES, 58 F.SUPP. 506, 507, AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249. ALSO, WE HAVE HELD THAT IN VIEW OF THE WIDE RANGE IN PRICES ORDINARILY RECEIVED ON SALVAGE, WASTE, AND SURPLUS PROPERTY, A MERE PRICE DIFFERENCE WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AS WOULD SIMILAR PRICE DIFFERENCES ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MAY WISH TO TAKE.

UNDER THE FACTS REPORTED, AND SINCE THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD, THERE IS NOTHING TO INDICATE THAT THE ACCEPTANCE OF THE BID WAS MADE IN OTHER THAN GOOD FAITH. SUCH AN ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. 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 IN RESPONSE TO THE INVITATION ISSUED IN THIS CASE WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF LIBERTY ELECTRONICS, INC., MADE AN ERROR BY BIDDING ON ITEM 40 INSTEAD OF ITEM 42, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE BIDDER TO RELIEF. UNDER THE CIRCUMSTANCES, WE FIND NO LEGAL BASIS FOR RELIEVING THE PROTESTING CONTRACTOR FROM ITS OBLIGATIONS UNDER THE CONTRACT.

THE PAPERS TRANSMITTED WITH THE LETTER OF FEBRUARY 18, 1960, ARE RETURNED HEREWITH.