B-145293, MAR. 28, 1961

B-145293: Mar 28, 1961

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TO THE SECRETARY OF THE ARMY: REFERENCE IS MADE TO A LETTER DATED MARCH 10. TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO AN INVITATION FOR BIDS ON SPOT SALE NO. 41-117-S-61-19 CONDUCTED NOVEMBER 8. AWARD WAS MADE TO LEVY AUTO PARTS. A NOTICE OF AWARD WAS MAILED ON NOVEMBER 9. IT WAS STATED ALSO THAT THE CORPORATION HAD NEVER PURCHASED AUTOMOTIVE OR AIRCRAFT TIRES AND THAT SURPLUS TIRES COULD NOT BE IMPORTED INTO CANADA. THE LOCATION OF THE CORPORATION'S HEAD OFFICE TO WHICH MERCHANDISE PURCHASED FROM THE RED RIVER ARSENAL IS SHIPPED. WITH THE LETTER WAS TRANSMITTED THE BIDDER'S WORKSHEET CONSISTING OF ITS RETAINED COPY OF THE DESCRIPTIVE PAGES OF THE INVITATION. APPARENTLY SUPPORTING THE ALLEGATION THAT THE BID WAS INTENDED TO BE ON ITEM NO. 15 INSTEAD OF NO. 16.

B-145293, MAR. 28, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED MARCH 10, 1961, WITH ENCLOSURES, FROM THE DEPUTY THE QUARTERMASTER GENERAL, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY LEVY AUTO PARTS,INC., 1346 CONNECTICUT AVENUE, N.W., WASHINGTON 6, D.C., TO HAVE BEEN MADE IN ITS BID SUBMITTED IN RESPONSE TO AN INVITATION FOR BIDS ON SPOT SALE NO. 41-117-S-61-19 CONDUCTED NOVEMBER 8, 1960, BY THE PROPERTY DISPOSAL OFFICER, RED RIVER ARSENAL, TEXARKANA, TEXAS.

THE INVITATION REQUESTED BIDS FOR THE PURCHASE OF 172 ITEMS OF SURPLUS PROPERTY. ITEM NO. 15 COVERED 25 COVER ASSEMBLIES DESCRIBED AS FOLLOWS:

CHART

"15. COVER ASSY, STEERING UNIT GEARS CASE, UNUSED.

FSN G280-2520-692-5527.

ETGW 900 LBS.

AC $35.00 EACH 25 EA"

ITEM NO. 16 COVERED 230 TIRES DESCRIBED AS FOLLOWS:

"16. TIRE, 500 BY 4, PNEUMATIC, AIRPLANE TYPE, UNUSED.

FSN 2610-269-9560.

ETGW 1990 LBS.

AC $13.70 EACH 230 EA"

IN RESPONSE TO THE INVITATION, LEVY AUTO PARTS, INC., SUBMITTED A BID BY MAIL ON SEVERAL ITEMS, INCLUDING A BID OF $3.77 EACH ON ITEM NO. 16. THE OTHER BIDS RECEIVED ON THAT ITEM RANGED FROM $0.115 TO $1.997 PER UNIT. ON NOVEMBER 8, 1960, AWARD WAS MADE TO LEVY AUTO PARTS, INC., AS THE HIGH BIDDER ON THREE ITEMS, INCLUDING ITEM NO. 16, AND A NOTICE OF AWARD WAS MAILED ON NOVEMBER 9, 1960.

IN A LETTER DATED NOVEMBER 14, 1960, TO THE RED RIVER ARSENAL, LEVY AUTO PARTS, INC., ALLEGED AN ERROR IN ITS BID, STATING THAT IT INTENDED TO BID ON ITEM NO. 15 INSTEAD OF NO. 16, AND REQUESTED CANCELLATION OF THE AWARD. IT WAS STATED ALSO THAT THE CORPORATION HAD NEVER PURCHASED AUTOMOTIVE OR AIRCRAFT TIRES AND THAT SURPLUS TIRES COULD NOT BE IMPORTED INTO CANADA, THE LOCATION OF THE CORPORATION'S HEAD OFFICE TO WHICH MERCHANDISE PURCHASED FROM THE RED RIVER ARSENAL IS SHIPPED. WITH THE LETTER WAS TRANSMITTED THE BIDDER'S WORKSHEET CONSISTING OF ITS RETAINED COPY OF THE DESCRIPTIVE PAGES OF THE INVITATION, APPARENTLY SUPPORTING THE ALLEGATION THAT THE BID WAS INTENDED TO BE ON ITEM NO. 15 INSTEAD OF NO. 16.

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER LEVY AUTO PARTS, INC., 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 WHICH MAY HAVE BEEN MADE WAS DUE SOLELY TO THE NEGLIGENCE OF LEVY AUTO PARTS, INC., AND SUCH ERROR WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT. THE BID SUBMITTED WAS UNAMBIGUOUS AND THERE WAS NOTHING ON ITS FACE TO INDICATE ERROR.

ALTHOUGH THE BID OF LEVY AUTO PARTS, INC., WAS CONSIDERABLY HIGHER THAN THE OTHER BIDS RECEIVED ON ITEM NO. 16, 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 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, 689, 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 LEVY AUTO PARTS, INC., 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 LEVY AUTO PARTS, INC., WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE IT TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DAUGHERTY V. UNITED STATES, 102 CT.CL. 249 AND SALIGMAN ET AL. V. UNITED STATES, 50 F.SUPP. 505, 507.

FOR THE REASONS ABOVE SET FORTH, THE AWARD TO LEVY AUTO PARTS, INC., MAY NOT BE CANCELED.