B-144755, JAN. 26, 1961

B-144755: Jan 26, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED JANUARY 3. (QUANTITY SHOWN IS APPROXIMATE). 1 EA. " BUT STATING THAT THE DESCRIPTIONS WERE BASED ON THE BEST INFORMATION AVAILABLE. IT ALSO ADVISED BIDDERS THAT NO ADJUSTMENT WOULD BE MADE IN CONTRACT PRICES FOR VARIATIONS IN QUANTITIES OR WEIGHTS FROM THOSE SHOWN IN THE INVITATION IF THE AWARDS WERE MADE ON A "PRICE FOR THE LOT" BASIS. THE REMAINING BIDS RECEIVED ON THIS ITEM WERE IN THE AMOUNTS OF $68.88. AN AWARD WAS THEREFORE MADE TO MR. THE CONTRACTOR PAID FOR THE PROPERTY IN FULL BUT WHEN HE PREPARED TO REMOVE IT HE DISCOVERED THAT THE GROSS WEIGHT WAS ONLY 1. REMOVAL WAS THEREFORE DISCONTINUED AND THE CONTRACTOR HAS REQUESTED RESCISSION OF HIS CONTRACT BECAUSE THE MATERIAL HAS ONLY SCRAP VALUE TO HIM.

B-144755, JAN. 26, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 3, 1961, FROM THE DEPUTY THE QUARTERMASTER GENERAL, REQUESTING A DECISION WITH RESPECT TO A REQUEST BY L. S. KIRCHENBAUM THAT AN AWARD TO HIM OF ITEM 319, SPOT BID SALE 30-127-S -61-1, BE RESCINDED.

THE INVITATION IN QUESTION REQUESTED BIDS BY JULY 13, 1960, ON 112 ITEMS OF SURPLUS PROPERTY LOCATED AT SCHENECTADY GENERAL DEPOT. ITEM 319 OF THE INVITATION OFFERED MISCELLANEOUS AUTOMOTIVE SPARE PARTS ON A LOT BASIS AND DESCRIBED THE MATERIAL INCLUDED IN SUCH LOT AS FOLLOWS:

TABLE

"319 MISC. AUTOMOTIVE SPARE PARTS FOR TRUCK, 1 1/2 TON, 1 LOT

4 BY 4, AUTOCAR, CONSISTING OF THE FOLLOWING:

(EST. GROSS WEIGHT 40,265 LBS.) (QUANTITY SHOWN

IS APPROXIMATE). 1 EA. SHAFT, PROPELLER, 2520-452-5722,

(G 511) 1 EA. SHAFT, POINT, 2520-737,3132,

(G 510)

110 EA. COVER, STEERING GEAR, 2530-769-6392, (G

510)

COND: UNUSED TOTAL ACQ. COST: $636.80"

THE INVITATION CONTAINED THE USUAL "INSPECTION" AND "CONDITION OF PROPERTY" CLAUSES INCORPORATED INTO THE TERMS OF STANDARD FORM 114, AUGUST 1950 EDITION, URGING BIDDERS TO INSPECT THE PROPERTY PRIOR TO BIDDING THEREON AND DISCLAIMING WARRANTIES AS TO "QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION," BUT STATING THAT THE DESCRIPTIONS WERE BASED ON THE BEST INFORMATION AVAILABLE. IT ALSO ADVISED BIDDERS THAT NO ADJUSTMENT WOULD BE MADE IN CONTRACT PRICES FOR VARIATIONS IN QUANTITIES OR WEIGHTS FROM THOSE SHOWN IN THE INVITATION IF THE AWARDS WERE MADE ON A "PRICE FOR THE LOT" BASIS.

L. S. KIRCHENBAUM SUBMITTED THE HIGH BID OF $325 FOR ITEM 319. THE REMAINING BIDS RECEIVED ON THIS ITEM WERE IN THE AMOUNTS OF $68.88, $58.80, AND $21.60. AN AWARD WAS THEREFORE MADE TO MR. KIRCHENBAUM AT A TOTAL PRICE OF $325 FOR THE LOT. THE CONTRACTOR PAID FOR THE PROPERTY IN FULL BUT WHEN HE PREPARED TO REMOVE IT HE DISCOVERED THAT THE GROSS WEIGHT WAS ONLY 1,825 POUNDS. REMOVAL WAS THEREFORE DISCONTINUED AND THE CONTRACTOR HAS REQUESTED RESCISSION OF HIS CONTRACT BECAUSE THE MATERIAL HAS ONLY SCRAP VALUE TO HIM; HIS BID PRICE WAS BASED UPON THE ESTIMATED GROSS WEIGHT OF 40,265 POUNDS SHOWN IN THE INVITATION; AND THE 1,825 POUNDS OF MATERIAL ACTUALLY INCLUDED IN ITEM 319 HAS A SCRAP VALUE TO HIM OF ONLY $15.

FROM THE INFORMATION TRANSMITTED WITH THE LETTER OF JANUARY 3 FROM THE DEPUTY THE QUARTERMASTER GENERAL, IT APPEARS THAT THE CONTRACTOR INSPECTED THE MATERIAL PRIOR TO BID OPENING. HOWEVER, HE ASSUMED THAT THE ONE PALLET LOAD OF MATERIAL CONSTITUTING ITEM 319 WAS A REPRESENTATIVE SAMPLE OF THE LOT BEING ADVERTISED AS 40,265 POUNDS.

THE ERROR IN THE ESTIMATED WEIGHT SHOWN IN THE INVITATION APPEARS TO HAVE RESULTED BECAUSE A WEIGHT OF 40,090 POUNDS FOR THE GEAR COVERS WAS LISTED ON THE TURN-IN DOCUMENT UNDER WHICH THE GEAR COVERS WERE TRANSFERRED FROM LETTERKENNY ORDNANCE DEPOT TO THE PROPERTY DISPOSAL OFFICER AT SCHENECTADY GENERAL DEPOT. WHILE THE ARTICLES IN QUESTION WERE CHECKED IN AT 1,825 POUNDS BY THE WAREHOUSEMAN AT SCHENECTADY, NO NOTATION CONCERNING THIS WEIGHT DISPARITY WAS PLACED UPON THE TURN-IN DOCUMENT AND THE DESCRIPTION OF ITEM 319 APPEARS TO HAVE BEEN PREPARED WITHOUT REFERENCE TO THE MORE CURRENT AND ACCURATE WEIGHT AT WHICH THE GEAR COVERS WERE CHECKED IN AT THE DISPOSAL SITE.

IN VIEW OF THE ABOVE, THE CONTRACTING OFFICER HAS FOUND THAT THE ESTIMATED WEIGHT OF THE ARTICLES INCLUDED IN THE DESCRIPTION OF ITEM 319 WAS NOT BASED ON THE BEST INFORMATION AVAILABLE TO THE GOVERNMENT, AS STATED IN THE INVITATION, AND THAT THE CONTRACTOR RELIED UPON THE ESTIMATED WEIGHT AS SHOWN IN THE INVITATION. ADDITIONALLY, THE REPORT OF THE DEPUTY THE QUARTERMASTER GENERAL STATES THAT BOTH THE CONTRACTOR AND THE CONTRACTING OFFICER SHOULD HAVE KNOWN THAT THE ITEMS DESCRIBED UNDER ITEM 319 WOULD NOT APPROXIMATE THE WEIGHT SHOWN IN THE INVITATION, AND THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF POSSIBLE ERROR IN THE HIGH BID, SINCE THE BID PRICE REPRESENTED 51 PERCENT OF ACQUISITION COST AND SUCH RATE OF RETURN APPEARS TO BE EXCESSIVE FOR THE PARTICULAR ITEMS INVOLVED IN THIS CASE.

IT IS THEREFORE RECOMMENDED BY THE CONTRACTING OFFICER AND THE DEPUTY THE QUARTERMASTER GENERAL THAT THE CONTRACT AWARDED UNDER ITEM 319 BE RESCINDED, THE PURCHASE PRICE BE REFUNDED, AND THE ITEM, PROPERLY DESCRIBED, BE PLACED ON FUTURE SALE.

FROM THE FOREGOING IT WOULD APPEAR TO BE SUFFICIENTLY ESTABLISHED THAT THE GOVERNMENT'S ESTIMATE OF THE WEIGHT OF ITEM 319 WAS ERRONEOUS AND THE AMOUNT OF THE CONTRACTOR'S BID PRICE IS ATTRIBUTABLE TO HIS RELIANCE UPON SUCH ERRONEOUS ESTIMATE. WHILE IT IS TRUE THAT THE PROVISIONS OF THE INVITATION DISCLAIMING WARRANTIES AS TO QUANTITIES OR WEIGHTS GAVE CLEAR NOTICE THAT BIDDERS SHOULD NOT RELY UPON THE QUANTITIES AND WEIGHTS SHOWN ON THE INVITATION, THE INVITATION ALSO ADVISED BIDDERS THAT THE ESTIMATES AND APPROXIMATIONS SHOWN THEREIN WERE BASED UPON THE BEST AVAILABLE INFORMATION. SINCE IT WOULD APPEAR THAT MORE CURRENT AND ACCURATE INFORMATION RELATIVE TO THE WEIGHT OF ITEM 319 THAN THAT USED IN COMPILING THE INVITATION WAS AVAILABLE TO THE CONTRACTING AGENCY, IT IS APPARENT THAT THE STATEMENT OF ESTIMATED WEIGHT SHOWN IN THE INVITATION, THOUGH ARRIVED AT IN GOOD FAITH, MUST BE VIEWED AS A MISREPRESENTATION, 77 C.J.S. 662.

IN VIEW OF THE WIDE VARIATION BETWEEN THE WEIGHT OF ITEM 319 AS INDICATED BY THE BEST INFORMATION AVAILABLE AND THE WEIGHT AS MISREPRESENTED IN THE INVITATION, THE APPARENT RELIANCE OF THE CONTRACTOR ON SUCH MISREPRESENTATION, AND YOUR ADVICE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF ERROR BECAUSE THE AMOUNT OF THE HIGH BID WAS EXCESSIVE FOR THE PARTICULAR ITEMS INVOLVED, IT IS OUR OPINION THAT THE CONTRACTOR IS ENTITLED TO RELIEF. THE AWARD ON ITEM 319 MAY THEREFORE BE CANCELLED AND THE PURCHASE PRICE REFUNDED. INDUSTRIAL SALVAGE COMPANY V. UNITED STATES, 122 CT.CL. 611.

THE ENCLOSURES RECEIVED WITH THE LETTER FROM THE DEPUTY THE QUARTERMASTER GENERAL ARE RETURNED.