B-142355, APR. 29, 1960

B-142355: Apr 29, 1960

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER DATED MARCH 22. TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF SALES CONTRACT N228S-43669. TWO LINES WERE PROVIDED FOR ITEM 41 IN ORDER THAT BIDDERS COULD QUOTE ON ONLY PART OF THE TOTAL QUANTITY. BIDDERS WERE REQUIRED TO SHOW THE ACTUAL QUANTITY BID UPON. WAS ACCEPTED ON JANUARY 13. WALTER WOLF AND COMPANY ADVISED THAT ITS INTENDED BID ON ITEM 41 WAS $101 FOR ALL THE 11 DRIVERS. THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED. WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. THE BID AS SUBMITTED CLEARLY WAS FOR ONE DRIVER FOR A PRICE OF $101. CONSIDERING THAT THIS WAS A SALE OF SURPLUS PROPERTY AND THAT THE PRICES BID ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER.

B-142355, APR. 29, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED MARCH 22, 1960, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN WITH RESPECT TO AN ERROR ALLEGED BY WALTER WOLF AND COMPANY, SANTA BARBARA, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID WHICH IS THE BASIS OF SALES CONTRACT N228S-43669.

THE NAVAL SUPPLY CENTER, DISPOSAL DEPARTMENT, OAKLAND, CALIFORNIA, BY SALES INVITATION B-107-60-228, ISSUED DECEMBER 15, 1959, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF SURPLUS HARDWARE, HAND TOOLS, OFFICE EQUIPMENT, AND INDUSTRIAL EQUIPMENT DESCRIBED THEREIN. ITEM 41 COVERED 11 DRIVERS, VELOCITY, POWER, MODEL C, ETC. ON THE SHEET FOR SHOWING THE PRICES FOR THE ITEMS BID UPON, TWO LINES WERE PROVIDED FOR ITEM 41 IN ORDER THAT BIDDERS COULD QUOTE ON ONLY PART OF THE TOTAL QUANTITY, AND BIDDERS WERE REQUIRED TO SHOW THE ACTUAL QUANTITY BID UPON.

IN RESPONSE TO THE INVITATION, WALTER WOLF AND COMPANY SUBMITTED A BID ON, AMONG OTHERS, ITEM 41 WHICH CLEARLY SHOWED THAT THE BID COVERED ONE DRIVER AND SHOWED THE PRICE OFFERED THEREFOR, IN BOTH THE UNIT PRICE AND THE TOTAL PRICE COLUMNS AS $101. THE BID ON ITEM 41, QUANTITY 1, WAS ACCEPTED ON JANUARY 13, 1960, UNDER SALES CONTRACT N228S-43669, WITH REMOVAL TO BE EFFECTIVE BY JANUARY 27, 1960.

BY LETTER DATED FEBRUARY 1, 1960, WALTER WOLF AND COMPANY ADVISED THAT ITS INTENDED BID ON ITEM 41 WAS $101 FOR ALL THE 11 DRIVERS, AND NOT FOR THE QUANTITY OF ONLY ONE. THE COMPANY REQUESTED THAT THE AWARD BE CANCELED. BY LETTER DATED FEBRUARY 3 THE CONTRACTING OFFICER ADVISED THE COMPANY THAT HE HAD NO AUTHORITY TO CANCEL THE CONTRACT AND HE SUGGESTED ALTERNATE COURSES OF ACTION, (1) DEFAULT AND FORFEITURE OF THE DEPOSIT, OR (2) SUBMISSION OF A CLAIM OF ERROR WITH SUBSTANTIATING EVIDENCE WHICH WOULD BE FORWARDED TO THE PROPER AUTHORITIES FOR ADJUDICATION. FEBRUARY 4, 1960, THE COMPANY SUBMITTED A CLAIM FOR THE TOTAL REFUND OF THE DEPOSIT AND FORWARDED A WORKSHEET AS EVIDENCE OF THE ALLEGED ERROR.

THE PRIMARY QUESTION INVOLVED IS NOT WHETHER AN ERROR WAS MADE IN THE BID AS ALLEGED, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. THE BID AS SUBMITTED CLEARLY WAS FOR ONE DRIVER FOR A PRICE OF $101. CONSIDERING THAT THIS WAS A SALE OF SURPLUS PROPERTY AND THAT THE PRICES BID 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 WHICH THE BIDDER MIGHT WISH TO TAKE, THE DIFFERENCE BETWEEN THE AMOUNT OF THE BID AND THE ONLY OTHER BID RECEIVED ON ITEM 41, OF $23 PER UNIT, IS NOT SUFFICIENT IN AND OF ITSELF TO WARRANT CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. THUS, THE RECORD INDICATES THAT THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. IN THE CIRCUMSTANCES, IT MUST BE HELD THAT THE ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO. ANY ERROR THAT MAY HAVE BEEN MADE IN THE BID WAS DUE SOLELY TO THE NEGLIGENCE OR OVERSIGHT OF THE BIDDER AND WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT. SUCH ERROR AS MAY HAVE BEEN MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, AFFORDS NO BASIS FOR GRANTING RELIEF FOR THE CONTRACTOR. SEE ODGEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN V. UNITED STATES, 56 F.SUPP. 505.

ACCORDINGLY, YOU ARE ADVISED THAT THERE IS NO LEGAL BASIS TO RELIEVE WALTER WOLF AND COMPANY FROM LIABILITY UNDER THE TERMS OF SALES CONTRACT NO. N228S-43669.