B-144642, DEC. 30, 1960

B-144642: Dec 30, 1960

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED DECEMBER 14. TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63068S-47590 IS BASED. - WHICH FACT WAS SHOWN ONLY BY DITTO MARKS AS TO ITEMS NOS. 35 TO 37. - WHICH FACT WAS SHOWN ONLY BY DITTO MARKS AS TO ITEM NO. 37. THE ONLY OTHER BID RECEIVED ON ITEM NO. 36 WAS IN THE AMOUNT OF $37. FIVE BIDS WERE RECEIVED ON ITEM NO. 37 IN THE AMOUNTS OF $68. THE BID OF MARTY'S SURPLUS SUPER MART ON ITEM NO. 36 WAS ACCEPTED ON OCTOBER 25. IT IS REPORTED THAT THE ACQUISITION COST OF LOT 36 WAS $8. 307.90 AND THE ACQUISITION COST OF LOT 37 WAS $10. STATING THAT IT INTENDED TO BID ON ITEM NO. 37 INSTEAD OF NO. 36 AND THAT THE TUBES COVERED BY ITEM NO. 36 WERE OF NO VALUE TO IT.

B-144642, DEC. 30, 1960

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 14, 1960, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY MARTY'S SURPLUS SUPER MART, SAN FRANCISCO, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63068S-47590 IS BASED.

BY SALES LETTER NO. SL-47-61-63068 ISSUED SEPTEMBER 30, 1960, THE U.S. NAVY CONSOLIDATED SURPLUS SALES OFFICE, OAKLAND, CALIFORNIA, REQUESTED BIDS--- TO BE OPENED OCTOBER 21, 1960--- FOR THE PURCHASE OF 68 ITEMS OF SURPLUS PROPERTY. ITEMS NOS. 34 TO 37 COVERED ELECTRONIC TUBES--- WHICH FACT WAS SHOWN ONLY BY DITTO MARKS AS TO ITEMS NOS. 35 TO 37. ITEMS NOS. 36 AND 37 COVERED MISCELLANEOUS TYPES OF ELECTRONIC TUBES--- WHICH FACT WAS SHOWN ONLY BY DITTO MARKS AS TO ITEM NO. 37.

IN RESPONSE TO THE SALES LETTER, MARTY'S SURPLUS SUPER MART SUBMITTED A BID OF $373.50 ON ITEM NO. 36. THE ONLY OTHER BID RECEIVED ON ITEM NO. 36 WAS IN THE AMOUNT OF $37. FIVE BIDS WERE RECEIVED ON ITEM NO. 37 IN THE AMOUNTS OF $68, $112.88, $125, $135.70 AND $461.61. THE BID OF MARTY'S SURPLUS SUPER MART ON ITEM NO. 36 WAS ACCEPTED ON OCTOBER 25, 1960. IT IS REPORTED THAT THE ACQUISITION COST OF LOT 36 WAS $8,307.90 AND THE ACQUISITION COST OF LOT 37 WAS $10,506.51.

BY A LETTER DATED NOVEMBER 3, 1960, MARTY'S SURPLUS SUPER MART ALLEGED AN ERROR IN ITS BID, STATING THAT IT INTENDED TO BID ON ITEM NO. 37 INSTEAD OF NO. 36 AND THAT THE TUBES COVERED BY ITEM NO. 36 WERE OF NO VALUE TO IT. WITH ITS LETTER OF NOVEMBER 10, 1960, THE BIDDER SUBMITTED ITS WORKSHEET SHOWING THAT IT HAD COMPUTED ITS BID ON THE BASIS OF TUBES COVERED BY ITEM NO. 37.

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER MARTY'S SURPLUS SUPER MART MADE A MISTAKE IN ITS 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 MARTY'S SURPLUS SUPER MART IN TRANSFERRING ITS COMPUTATIONS FROM ITS 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 FOR ITEM NO. 36 WAS INTENDED FOR ITEM NO. 37.

ALTHOUGH THE BID OF MARTY'S SURPLUS SUPER MART WAS MUCH HIGHER THAN THE ONLY OTHER BID RECEIVED ON ITEM NO. 36, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT 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, 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 MARTY'S SURPLUS SUPER MART 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 MARTY'S SURPLUS SUPER MART WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE IT TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

FOR THE REASONS ABOVE SET FORTH, THE AWARD TO MARTY'S SURPLUS SUPER MART MAY NOT BE CANCELED.