B-143820, SEP. 8, 1960

B-143820, SEP. 8, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2), DATED AUGUST 24, 1960, WITH ENCLOSURES, FROM THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING A MISTAKE ALLEGED AFTER AWARD BY ULTRA- SONIC DEBURRING CO., GARDEN GROVE, CALIFORNIA, IN ITS BID ON ITEM NO. 33 OF SALES CONTRACT NO. N60258S-9950. A DECISION IS REQUESTED AS TO WHETHER RELIEF PROPERLY MAY BE DENIED.

BY INVITATION NO. B-47-60-60258, DATED JUNE 3, 1960, LONG BEACH NAVAL SHIPYARD, TORRANCE, CALIFORNIA, SOLICITED BIDS--- OPENING JULY 1, 1960--- FOR THE PURCHASE FROM THE GOVERNMENT OF 46 ITEMS OF GOVERNMENT SURPLUS PROPERTY, DESCRIBED GENERALLY AS "TRUCK CRANES, SEDANS, METAL SHEETS AND SHAPES, MOTOR GENERATORS, POWER CABLE, DIESEL ENGINES, PROPELLERS, KITCHEN EQUIPMENT AND CHEMICALS.' ITEMS NOS. 32 AND 33 WERE DESCRIBED AS FOLLOWS:

CHART

"32 ENGINE LATHE, FLOOR MOUNTING, MODEL RS, 1 EACH

16 BY 54, ELECTRIC MOTOR DRIVEN, MOTOR DATA:

220/440 V, AC, 7 HP. MFR. HENDEY MACHINE CO.

CONDITION: USED, POOR

ACQ. COST:$2,701.80

"33 DRIVE GEARS, FOR BORING BAR ADAPTABLE TO 1 LOT

VARIOUS SIZE BORING BARS. MFR. H. B.

UNDERWOOD CORP. (3 PALLETS)

CONDITION: USED, FAIR

ACQ. COST: $1,220.00

LOOSE ON PALLETS.'

IN RESPONSE TO THE INVITATION, ULTRA-SONIC DEBURRING CO. SUBMITTED A BID DATED JULY 1, 1960, WITH PRICE QUOTATIONS ON A NUMBER OF THE LISTED ITEMS, INCLUDING A QUOTATION OF $301 ON ITEM NO. 33. THE ONLY OTHER BID ON THAT ITEM WAS IN THE AMOUNT OF $25. NINETEEN BIDS--- RANGING FROM $11.11 TO $1,986.50--- WERE RECEIVED ON ITEM NO. 32, BUT NO BID ON THAT ITEM WAS RECEIVED FROM ULTRA-SONIC DEBURRING CO. ON JULY 7, 1960, THE COMPANY'S BID WAS ACCEPTED AS TO ITEM NO. 33 (CONTRACT NO. N60258S-9950). THEREAFTER, THE BIDDER ADVISED THE DISPOSAL AGENCY BY LETTER DATED JULY 20, 1960, THAT INSTEAD OF BIDDING $301 ON ITEM NO. 33 IT WAS ITS INTENTION TO BID THAT AMOUNT ON ITEM NO. 32. IN SUPPORT OF ITS ALLEGATION OF ERROR THE COMPANY FORWARDED A COPY OF A WORKSHEET WHICH CONTAINS NO PRICE ENTRY OPPOSITE ITEM NO. 33 BUT CONTAINS AN AMOUNT OPPOSITE ITEM NO. 32. THE COMPANY REQUESTED REFUND OF ITS BID DEPOSIT OF $120 RETAINED AS PART OF THE PURCHASE PRICE OF ITEM NO. 33.

THE CONTRACTING OFFICER IN HIS REPORT REGARDING THE SALE STATES THAT A REVIEW OF THE TWO BIDS RECEIVED FOR ITEM NO. 33 REVEALS THAT THE LOW BID REPRESENTED SCRAP PRICE VALUE AND THE PURCHASER'S BID REPRESENTED A REASONABLE FAIR VALUE OF THE MATERIAL AS A USEABLE ITEM ON THE COMMERCIAL MARKET. THE BID FOR LOT NO. 33 BY ULTRA-SONIC DEBURRING CO. DID NOT REFLECT THE POSSIBILITY OF AN ERROR THEREIN AND NO ERROR WAS ALLEGED UNTIL AFTER AWARD.

WHILE THE RECORD INDICATES THAT THE COMPANY MAY HAVE MADE AN ERROR IN ITS BID, AS ALLEGED, SUCH ERROR WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO ITS OWN NEGLIGENCE. SUCH ERROR, THEREFORE, WAS UNILATERAL--- NOT MUTUAL--- AND WOULD NOT ENTITLE THE PURCHASER TO RELIEF, UNLESS THE CIRCUMSTANCES WERE SUCH THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER WAS CHARGEABLE WITH NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH ERROR SO AS TO MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

THE BID OF ULTRA-SONIC DEBURRING CO. WAS REGULAR ON ITS FACE AND THERE WAS NOTHING TO INDICATE THAT THE PRICE QUOTED THEREON FOR ITEM NO. 33 WAS INTENDED FOR ITEM NO. 32. ALSO, WHERE ONLY TWO BIDS ARE RECEIVED WHICH VARY WIDELY IN AMOUNT THERE IS USUALLY NO BASIS FOR DETERMINING WHICH OF THE TWO BIDS MAY BE OUT OF LINE. THIS WAS A SALE OF SURPLUS PROPERTY AND IT DOES NOT APPEAR THAT A BID OF $301 WHEN COMPARED WITH THE ACQUISITION COST OF $1,220 OF SUCH PROPERTY WOULD BE CONSIDERED UNREASONABLE TO ANYONE WITH AUTHORITY TO ACCEPT BIDS. FURTHERMORE, IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON GOVERNMENT 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. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; ID. 601. FOR THESE REASONS AND SINCE ERROR WAS NOT ALLEGED BY THE BIDDER UNTIL AFTER AWARD OF THE SALE OF ITEM NO. 33, IT MUST BE HELD THAT THE CONTRACTING OFFICER WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR AND THAT HIS ACCEPTANCE OF THE BID WAS IN GOOD FAITH. SUCH ACCEPTANCE, THEREFORE, RESULTED IN A VALID AND BINDING CONTRACT AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER ORAGENT OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELEASE. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR GRANTING THE RELIEF REQUESTED BY ULTRA-SONIC DEBURRING CO. AS TO ITEM NO. 33 ON SALES CONTRACT NO. N60258S- 9950.