B-145313, MAR. 30, 1961

B-145313: Mar 30, 1961

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THE SALES INVITATION WAS ISSUED ON NOVEMBER 8. BIDS WERE OPENED ON NOVEMBER 29. ITEM NO. 2 IS LISTED AS FOLLOWS: "DIESEL ENGINE: (S2815-NA) WAUKESHA-HESSELMAN. COST ENGINE ONLY IS $2. WHILE THREE OTHER BIDS RECEIVED WERE IN THE AMOUNTS OF $178.88. HANSEN ADVISED THAT A MISTAKE HAS BEEN MADE IN THAT ITS BID ON ITEM NO. 2 WAS ACTUALLY INTENDED FOR ITEM NO. 3. THAT ITEM IS DESCRIBED IN THE INVITATION AS FOLLOWS: "OUTBOARD PROPELLING UNIT: MANUALLY ELEVATED. UNIT WAS MFR-D IN 1942 OR 1944 BY THE MURRAY AND TREGURTHA INC. THERE WAS ONE BID AT $1. IT IS REPORTED THAT THIS CHECK WAS SUBMITTED AS DEPOSIT WITH THE BID FOR ITEM NO. 2. THAT IT WAS RECEIVED BY AND HELD IN THE CUSTODY OF THE COLLECTION AGENT.

B-145313, MAR. 30, 1961

TO THE SECRETARY OF THE NAVY:

WE REFER TO A LETTER OF MARCH 13, 1961, (R11.2), WITH ENCLOSURE, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO WHETHER RELIEF PROPERLY MAY BE GIVEN IN THE MATTER OF A MISTAKE IN BID, ALLEGED AFTER AWARD OF SALES CONTRACT N63066- 231 (SALES INVITATION NO. B-8-61-63066) BY H. HANSEN AND SONS.

THE SALES INVITATION WAS ISSUED ON NOVEMBER 8, 1960, BY THE CONSOLIDATED SURPLUS SALES OFFICE, NEWPORT, R.I., FOR THE SALE OF 94 ITEMS OF MARINE AND INDUSTRIAL EQUIPMENT. BIDS WERE OPENED ON NOVEMBER 29, 1960. ITEM NO. 2 IS LISTED AS FOLLOWS:

"DIESEL ENGINE: (S2815-NA) WAUKESHA-HESSELMAN, MOD. 6 WAKH. SIZE 6 1/4 BY 6 1/2. 1200 RPM. * * * USED. REPAIRS REQUIRED. ESTIMATED ACQ. COST ENGINE ONLY IS $2,500.00. * * *"

ON THAT ITEM, H. HANSEN AND SONS SUBMITTED A BID OF $627, WHILE THREE OTHER BIDS RECEIVED WERE IN THE AMOUNTS OF $178.88, $150 AND $48. CONSEQUENTLY, HANSEN RECEIVED THE AWARD ON NOVEMBER 30, 1960.

BY LETTER OF NOVEMBER 30, 1960, HANSEN ADVISED THAT A MISTAKE HAS BEEN MADE IN THAT ITS BID ON ITEM NO. 2 WAS ACTUALLY INTENDED FOR ITEM NO. 3. THAT ITEM IS DESCRIBED IN THE INVITATION AS FOLLOWS:

"OUTBOARD PROPELLING UNIT: MANUALLY ELEVATED, POWERED BY A 6 CYLINDER, 2 CYCLE DIESEL ENGINE, 165 H.P. AT 1800 RPM. MFR-D BY GENERAL MOTORS. UNIT WAS MFR-D IN 1942 OR 1944 BY THE MURRAY AND TREGURTHA INC., MOD. 02D. UNIT SER.N.A. USN NO. 88-00656. ENG.MOD. 6066 671KC46H. ENG.SER. UNIT NO. 42 671132432. * * * POOR CONDITION * * * ACQ. COST: $16,000.00. * *

ON ITEM NO. 3 EIGHT BIDS RECEIVED RANGED IN PRICE FROM $37.50 TO $570, AND THERE WAS ONE BID AT $1,000. ON DECEMBER 23, 1960, PURSUANT TO A REQUEST FROM THE CONTRACTING OFFICER, HANSEN SUBMITTED A CANCELLED CHECK AND STUB, BOTH BEARING THE NOTATION "671 GM.' IT IS REPORTED THAT THIS CHECK WAS SUBMITTED AS DEPOSIT WITH THE BID FOR ITEM NO. 2, THAT IT WAS RECEIVED BY AND HELD IN THE CUSTODY OF THE COLLECTION AGENT, AND THE CONTRACTING OFFICER HAD NO KNOWLEDGE OF THE NOTATION.

THE ADMINISTRATIVE REPORT SUGGESTS THAT THE SITUATION HERE IS VERY SIMILAR TO THAT DISCUSSED IN OUR DECISION B-141819, FEBRUARY 9, 1960, WHEREIN WE HELD THAT AN INCONSISTENT NOTATION ON THE FACE OF A DEPOSIT CHECK, COUPLED WITH A BID PRICE CONSIDERABLY HIGHER THAN THE NEXT HIGHEST BID, WAS SUFFICIENT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF A POSSIBLE ERROR SO THAT HE SHOULD HAVE REQUESTED VERIFICATION PRIOR TO ACCEPTING THE BID. IN THIS CASE THE CONTRACTING OFFICER REPORTS THAT HE NEVER ACTUALLY SAW THE DEPOSIT CHECK PRIOR TO AWARD. WE THINK, HOWEVER, THAT SUCH FACT SHOULD NOT LEAD TO A RESULT DIFFERENT FROM THAT IN OUR DECISION OF FEBRUARY 9, 1960.

THE SUBJECT INVITATION REQUIRED THAT BIDDERS SUBMIT A BID DEPOSIT OF 20 PERCENT OF THE AMOUNT BID. THE NOTATION "671 GM" ON THE FACE OF THE DEPOSIT CHECK INDICATED AN INTENT TO BID ON THE MATERIAL LISTED UNDER ITEM NO. 3 WHILE THE BIDDER ACTUALLY BID ON ITEM NO. 2. UNDER THESE CIRCUMSTANCES WE BELIEVE THAT THE BID INDICATED A POSSIBILITY OFERROR WHICH THE PROCURING OFFICE SHOULD HAVE OBSERVED SINCE IT EXAMINED INTO THE SUFFICIENCY OF THE BID DEPOSIT.

ACCORDINGLY, IN VIEW OF THE ABOVE, AND THE FACT THAT THE ERROR WAS PROMPTLY ALLEGED, THE BIDDER MAY BE RELEASED FROM HIS OBLIGATION UNDER CONTRACT NO. N63066-231 AND THE AMOUNT OF HIS DEPOSIT MAY BE REFUNDED TO HIM.