B-144849, FEB. 1, 1961

B-144849: Feb 1, 1961

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TO THE SECRETARY OF THE NAVY: RECEIPT IS ACKNOWLEDGED OF A LETTER DATED JANUARY 11. IT APPEARS FURTHER THAT UPON RECEIPT OF APPROVAL OF PROSPECTIVE AWARDS FROM THE NAVAL PROPERTY REVIEW BOARD AN OFFICIAL NOTICE OF AWARD WAS MAILED TO THE KORD COMPANY AS THE HIGH BIDDER FOR LOT NO. 7. WHILE THE BID OF THE KORD COMPANY OF $561.21 FOR LOT NO. 7 IS SUBSTANTIALLY HIGHER THAN THE FIVE OTHER BIDS RECEIVED FOR THE LOT. WE FIND NO BASIS FOR HOLDING THAT THE KORD COMPANY'S BID WAS UNREASONABLE WHEN COMPARING IT WITH THE ORIGINAL ACQUISITION COST OF THE MATERIAL OFFERED FOR SALE UNDER LOT NO. 7. WE MUST CONCLUDE THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS MADE IN GOOD FAITH AND THAT SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

B-144849, FEB. 1, 1961

TO THE SECRETARY OF THE NAVY:

RECEIPT IS ACKNOWLEDGED OF A LETTER DATED JANUARY 11, 1961, WITH ENCLOSURES, FILE FR-10 RH:RW), 7240 (K), NAVY CLAIM NO. 184469, FROM THE U.S. NAVY REGIONAL ACCOUNTS OFFICE, WASHINGTON, D.C., REQUESTING OUR DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN UNDER SALES INVITATION NO. C-2-61.

IT APPEARS THAT THE INSPECTOR OF NAVAL MATERIAL, DALLAS, TEXAS, SOLICITED BIDS, THROUGH THE CHANCE VOUGHT AIRCRAFT, INC., FOR THE SALE OF VARIOUS LOTS OF SURPLUS PROPERTY. THE KORD COMPANY SUBMITTED A BID OF $561.21 FOR LOT NO. 7, COVERING VARIOUS QUANTITIES OF ELECTRICAL WIRE, CABLE, AND CONDUIT, AND CARRYING AN ORIGINAL ACQUISITION COST OF $7,570.41. PROPERTY DISPOSAL OFFICER OF THE NAVAL INSTALLATION ATTENDED THE BID OPENING ON OCTOBER 3, 1960, AT THE CHANCE VOUGHT PLANT AND PERSONALLY REEXAMINED THE KORD COMPANY'S BID ON LOT NO. 7. IT APPEARS FURTHER THAT UPON RECEIPT OF APPROVAL OF PROSPECTIVE AWARDS FROM THE NAVAL PROPERTY REVIEW BOARD AN OFFICIAL NOTICE OF AWARD WAS MAILED TO THE KORD COMPANY AS THE HIGH BIDDER FOR LOT NO. 7. IMMEDIATELY UPON LEARNING OF THE AWARD, THE KORD COMPANY ADVISED THAT A MISTAKE HAD BEEN MADE IN ITS BID, IN THAT IT HAD INTENDED TO BID ON LOT NO. 6--- COVERING AIRBORNE MILITARY ELECTRONIC PARTS AND COMPONENTS AT AN ORIGINAL ACQUISITION COST OF $198,635.81--- INSTEAD OF LOT NO. 7. THE COMPANY REQUESTS PERMISSION TO WITHDRAW ITS BID.

WHILE THE BID OF THE KORD COMPANY OF $561.21 FOR LOT NO. 7 IS SUBSTANTIALLY HIGHER THAN THE FIVE OTHER BIDS RECEIVED FOR THE LOT, WHICH RANGED FROM $37.77 TO $13, OUR OFFICE CONSISTENTLY HAS HELD THAT 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 FROM THE GOVERNMENT AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. MOREOVER, WE FIND NO BASIS FOR HOLDING THAT THE KORD COMPANY'S BID WAS UNREASONABLE WHEN COMPARING IT WITH THE ORIGINAL ACQUISITION COST OF THE MATERIAL OFFERED FOR SALE UNDER LOT NO. 7. IN VIEW OF THIS, WE MUST CONCLUDE THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS MADE IN GOOD FAITH AND THAT SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. ALSO, WE FIND NOTHING IN THAT PART OF THE INVITATION FOR BIDS, WHICH IDENTIFIED THE PARTICULAR LOTS FOR SALE, THAT COULD BE HELD TO BE AMBIGUOUS OR MISLEADING.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELEASE FROM THE CONTRACTUAL OBLIGATION INCURRED BY THE KORD COMPANY IN THE MATTER.

THE PAPERS, WITH THE EXCEPTION OF THE COMMUNICATION DATED OCTOBER 25, 1960, FROM THE INSPECTOR OF NAVAL MATERIAL, DALLAS, TEXAS, ARE RETURNED HEREWITH.