B-145312, MAY 29, 1961

B-145312: May 29, 1961

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BIDS RECEIVED IN RESPONSE TO SALES INVITATION B-125-61-63067 WERE OPENED ON FEBRUARY 16. PECK IRON AND METAL COMPANY WAS THE SUCCESSFUL BIDDER ON A TOTAL OF SEVEN ITEMS AND WAS AWARDED CONTRACT NO. THE AMOUNTS WERE ENTERED AFTER ITEMS 8. THE FIGURE 889.14 WAS ENTERED IN INK. ITEMS 11 AND 12 WERE CROSSED OUT. THE FIGURES WERE SET FORTH AS FOLLOWS: TABLE ITEM ARTICLES PRICE BID NO. FOR SALE QUANTITY PER UNIT 8 GENERATOR 1 $ 41.44 9 GENERATOR 1 889.14 10 GENERATOR 1 564.44 11 TRANSFORMERS 2 564.44 AN ABSTRACT OF BIDS FOR ITEMS 7 SHOWS THAT SEVEN BIDS WERE RECEIVED RANGING FROM $16.99 TO $129.89. ELEVEN BIDS WERE RECORDED FROM $137.88 TO $1039. PECK'S BID OF $889.14 WAS HIGH FOR ITEM 9 AND TWELVE OTHER BIDS RANGED FROM $60.30 TO $687.

B-145312, MAY 29, 1961

TO THE SECRETARY OF THE NAVY:

WE REFER TO A LETTER DATED MARCH 13, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION REGARDING A MISTAKE IN BID ALLEGED BY PECK IRON AND METAL COMPANY, INCORPORATED, PORTSMOUTH, VIRGINIA, AFTER AWARD OF SALES CONTRACT N63067-2816, ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE, NORFOLK, VIRGINIA.

BIDS RECEIVED IN RESPONSE TO SALES INVITATION B-125-61-63067 WERE OPENED ON FEBRUARY 16, 1961. PECK IRON AND METAL COMPANY WAS THE SUCCESSFUL BIDDER ON A TOTAL OF SEVEN ITEMS AND WAS AWARDED CONTRACT NO. N63067-2816 FOR THOSE ITEMS ON FEBRUARY 20, 1961. AFTER RECEIPT OF THE AWARD MR. JULIUS PECK ADVISED THE CONTRACTING OFFICER BY TELEPHONE AND BY LETTER DATED FEBRUARY 24, 1961, THAT HE HAD INTENDED TO BID ON ITEMS 7, 8, 9 AND 10 OF THE INVITATION, BUT DUE TO AN ERROR IN TRANSCRIBING FROM HIS WORKSHEET, THE AMOUNTS WERE ENTERED AFTER ITEMS 8, 9, 10 AND 11 IN HIS BID. HE ASKED TO BE RELIEVED FROM HIS OBLIGATION TO PURCHASE ITEM 11.

IN SUPPORT OF HIS ALLEGATION, MR. PECK SUBMITTED A WORKSHEET CONTAINING DESCRIPTIONS OF ITEMS 8 THROUGH 12. AFTER ITEM 8, A 50 KW POWER GENERATOR, THE FIGURE 889.14 WAS ENTERED IN INK. ITEMS 9 AND 10, DESCRIBED AS 25 KW POWER GENERATORS, EACH HAD THE FIGURE 564.44 ENTERED IN INK AFTER THE DESCRIPTIONS. ITEMS 11 AND 12 WERE CROSSED OUT. ON PAGE 3 OF MR. PECK'S BID, THE FIGURES WERE SET FORTH AS FOLLOWS:

TABLE ITEM ARTICLES PRICE BID NO. FOR SALE

QUANTITY PER UNIT

8 GENERATOR 1 $ 41.44

9 GENERATOR 1 889.14 10 GENERATOR 1

564.44 11 TRANSFORMERS 2 564.44

AN ABSTRACT OF BIDS FOR ITEMS 7 SHOWS THAT SEVEN BIDS WERE RECEIVED RANGING FROM $16.99 TO $129.89. FOR ITEM 8, IN ADDITION TO MR. PECK'S BID OF $41.44, ELEVEN BIDS WERE RECORDED FROM $137.88 TO $1039. MR. PECK'S BID OF $889.14 WAS HIGH FOR ITEM 9 AND TWELVE OTHER BIDS RANGED FROM $60.30 TO $687. ELEVEN BIDS WERE RECEIVED FOR ITEM 10. ALL BIDDERS FOR ITEM 10 ALSO BID ON ITEM 9, BOTH OF WHICH WERE 25 KW POWER GENERATORS, AND SIX BIDDERS SUBMITTED IDENTICAL BIDS FOR THE TWO ITEMS. FOUR BIDDERS HAD DIFFERENCES BETWEEN THEIR BIDS FOR THE TWO ITEMS OF $2, $40, $50 AND $51 WHILE THE DIFFERENCE BETWEEN THE FIGURES APPEARING ON MR. PECK'S BID FOR ITEMS 9 AND 10 WAS $324.70. NO BID OTHER THAN MR. PECK'S WAS RECEIVED FOR ITEM 11.

IN A STATEMENT DATED FEBRUARY 27, 1961, THE CONTRACTING OFFICER ADVISED THAT THE PECK IRON AND METAL COMPANY DEALS IN SCRAP METALS, HEAVY MACHINERY, ENGINES AND GENERATORS BUT DOES NOT DEAL IN COMMUNICATIONS EQUIPMENT, ELECTRICAL OR ELECTRONIC FITTINGS AND ACCESSORIES. AFTER THE ALLEGATION OF ERROR, THE CONTRACTING OFFICER DETERMINED THAT ALTHOUGH THE TOTAL BID PRICE FOR ITEM 11, $1128.88, WAS APPROXIMATELY $700 LESS THAN ACQUISITION COST FOR THE TWO TRANSFORMERS, THE AMOUNT OF SCRAP IN THE TRANSFORMERS WOULD NOT BRING $1128.88 FROM A SCRAP DEALER. IN ADDITION, THE CONTRACTING OFFICER FOUND THAT THE PRICES SUBMITTED BY THE PECK COMPANY FOR ITEMS 8, 9, 10 AND 11, IF APPLIED TO ITEMS 7, 8, 9 AND 10 ARE MORE IN LINE WITH BIDS RECEIVED FROM OTHER BIDDERS. THE CONTRACTING OFFICER FOUND THAT THE PECK COMPANY MADE AN HONEST ERROR IN TRANSCRIBING FROM THE WORKSHEET TO THE BID FORM AND RECOMMENDED THAT THE COMPANY BE RELIEVED OF ITS CONTRACTUAL OBLIGATIONS ON ITEM 11 WITHOUT PENALTY.

IN OUR OPINION, THE CONTRACTING OFFICER SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF AN ERROR IN THE PECK COMPANY'S BID AT THE TIME THE BIDS WERE OPENED IN VIEW OF THE FACT THAT IDENTICAL BIDS FOR SIMILAR GENERATORS IN ITEMS 9 AND 10 WERE MUCH MORE LIKELY THAN IDENTICAL BIDS FOR SUCH GROSSLY DIFFERENT ARTICLES AS A GENERATOR AND TRANSFORMERS IN ITEMS 10 AND 11. MOREOVER, SINCE THERE WERE NO OTHER BIDS TO COMPARE WITH THE ONE BID RECEIVED FOR ITEM 11, THE VALUE OF THE TRANSFORMERS AS SCRAP SHOULD HAVE BEEN CONSIDERED AS WELL AS THE ACQUISITION COST IN EVALUATING THE BIDS.

UNDER THE CIRCUMSTANCES, WE AGREE WITH THE FINDING OF THE CONTRACTING OFFICER THAT AN HONEST ERROR WAS MADE BY THE PECK COMPANY AND WE BELIEVE THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN CHARGED WITH NOTICE OF THE ERROR. THE PECK COMPANY MAY BE RELIEVED OF ITS CONTRACTUAL OBLIGATIONS ON ITEM 11, WITHOUT PENALTY, AS RECOMMENDED.