B-145150, MAR. 13, 1961

B-145150: Mar 13, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED FEBRUARY 20. N63070S-59914 IS BASED. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEM 11 ON JANUARY 27. IT IS REPORTED THAT ON FEBRUARY 1. WHICH WAS RECEIVED ON FEBRUARY 3. THE ORIGINAL ACQUISITION COST OF WHICH WAS STATED IN THE INVITATION TO BE $7. THAT THE ERROR OCCURRED WHEN HE WAS TRANSFERRING HIS BID PRICES FROM THE DESCRIPTION SHEET TO THE BID FORM SUBMITTED. SANBORN STATED THAT IT WAS OBVIOUS THAT HE HAD MADE AN ERROR SINCE IT WAS UNLIKELY THAT A BIDDER WOULD QUOTE A PRICE OF $1. IN HIS UNDATED REPORT THE CONTRACTING OFFICER STATES THAT AN ERROR IN THE BID OF THE SANBORN MACHINE SHOP ON ITEM 11 WAS SUSPECTED PRIOR TO AWARD.

B-145150, MAR. 13, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED FEBRUARY 20, 1961, 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 THE SANBORN MACHINE SHOP, COMPTON, CALIFORNIA, ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63070S-59914 IS BASED.

THE CONSOLIDATED SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA, BY INVITATION OF, AMONG OTHER ITEMS, ONE SHEAR, SQUARING, SHEET METAL, USED CONDITION, ACQUISITION COST $250, ITEM 11. IN RESPONSE THE SANBORN MACHINE SHOP SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, THE SQUARING SHEAR COVERED BY ITEM 11 AT A PRICE OF $1,377. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEM 11 ON JANUARY 27, 1961.

IT IS REPORTED THAT ON FEBRUARY 1, 1961, MR. SANBORN ADVISED THE CONTRACTING OFFICER BY TELEPHONE THAT HE HAD INTENDED TO BID ON ITEM 13, AN ENGINE LATHE, INSTEAD OF ITEM 11. IN A CONFIRMING LETTER, WHICH WAS RECEIVED ON FEBRUARY 3, 1961, MR. SANBORN ADVISED THE CONTRACTING OFFICER THAT HE HAD INTENDED HIS BID PRICE OF $1,377 TO BE APPLICABLE TO THE HENDY ENGINE LATHE COVERED BY ITEM 13, THE ORIGINAL ACQUISITION COST OF WHICH WAS STATED IN THE INVITATION TO BE $7,000, AND THAT THE ERROR OCCURRED WHEN HE WAS TRANSFERRING HIS BID PRICES FROM THE DESCRIPTION SHEET TO THE BID FORM SUBMITTED. MR. SANBORN STATED THAT IT WAS OBVIOUS THAT HE HAD MADE AN ERROR SINCE IT WAS UNLIKELY THAT A BIDDER WOULD QUOTE A PRICE OF $1,377 FOR A MACHINE WHICH ORIGINALLY COST $250 AND HE REQUESTED THAT THE BID BE CORRECTED AND HIS BID DEPOSIT BE REFUNDED. IN SUPPORT OF HIS ALLEGATION OF ERROR. MR. SANBORN SUBMITTED HIS WORKSHEETS WHICH APPEAR TO BE COPIES OF THE DESCRIPTION SHEETS COVERING ITEMS 1 THROUGH 35, INCLUSIVE. THE WORKSHEETS INDICATE A BID OF $1,377 FOR ITEM 13, A HENDY ENGINE LATHE; HOWEVER, NO QUOTATION APPEARS FOR ITEM 11, A SQUARING SHEAR.

THE LIST OF BIDS SHOWS THAT THE 16 OTHER BIDS ON ITEM 11 RANGED FROM $788 TO $12. IN HIS UNDATED REPORT THE CONTRACTING OFFICER STATES THAT AN ERROR IN THE BID OF THE SANBORN MACHINE SHOP ON ITEM 11 WAS SUSPECTED PRIOR TO AWARD, BUT THAT ITS BID WAS NOT VERIFIED BECAUSE OF THE FACT THAT TWO OF THE OTHER BIDS RECEIVED ON THAT ITEM WERE IN AMOUNTS ABOVE THE ORIGINAL ACQUISITION COST THEREOF. WHILE A MERE DIFFERENCE IN THE PRICES QUOTED FOR USED GOVERNMENT PROPERTY WOULD NOT NECESSARILY PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW PROPERTY FOR SALE TO THE GOVERNMENT, IT MUST BE CONCEDED THAT IT IS UNLIKELY THAT A BIDDER, AS HERE, WOULD INTENTIONALLY OFFER FOR USED PROPERTY MORE THAN FIVE TIMES THE AMOUNT OF ITS ORIGINAL ACQUISITION COST. IN THE CIRCUMSTANCES, IT WOULD APPEAR THAT A REQUEST FOR VERIFICATION OF THE BID WOULD HAVE BEEN IN ORDER BEFORE ITS ACCEPTANCE.

ON THE RECORD, THERE IS NO ROOM FOR DOUBT THAT THE SANBORN MACHINE SHOP MADE AN ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, SINCE IT APPEARS THAT THE SANBORN MACHINE SHOP HAS NOT TAKEN ANY FURTHER STEPS TOWARD COMPLETION OF THE CONTRACT, CONTRACT N63070S-59914 MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.