B-145463, APR. 13, 1961

B-145463: Apr 13, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED MARCH 27. IN VIEW OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID UPON WHICH THE CONTRACT WAS AWARDED. THERE IS NO BASIS FOR CHARGING THE GOVERNMENT CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR IN THE HIGH BID OF $51 WHICH IRVIN V. THEIS' BID OF $51 FOR ITEM NO. 7 IS CONSIDERABLY HIGHER THAN THE FOUR OTHER BIDS RECEIVED. WHEN CONSIDERING THAT THE ACQUISITION COST FOR THE TAPING MACHINE IS $204.43. ARE RETURNED HEREWITH.

B-145463, APR. 13, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED MARCH 27, 1961, WITH ENCLOSURES, FILE R11.2, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING OUR DECISION AS TO WHETHER THERE PROPERLY MAY BE DENIED THE RELIEF SOUGHT BY IRVIN V. THEIS, NAMELY, CANCELLATION OF THE TRANSACTION AND REFUND OF HIS $20 BID DEPOSIT, UNDER DEPARTMENT OF THE NAVY SALE CONTRACT NO. N63069-186, DATED OCTOBER 21, 1960, IN VIEW OF AN ERROR ALLEGED TO HAVE BEEN MADE IN THE BID UPON WHICH THE CONTRACT WAS AWARDED.

ON THE RECORD BEFORE US, THERE IS NO BASIS FOR CHARGING THE GOVERNMENT CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR IN THE HIGH BID OF $51 WHICH IRVIN V. THEIS QUOTED FOR THE TAPING MACHINE COVERED BY ITEM NO. 7 OF PHILADELPHIA NAVAL SHIPYARD INVITATION NO. B-44-61-63069. WHILE MR. THEIS' BID OF $51 FOR ITEM NO. 7 IS CONSIDERABLY HIGHER THAN THE FOUR OTHER BIDS RECEIVED, WHICH RANGED FROM $21.13 TO $1, SUCH A DIFFERENTIAL, WITHOUT MORE, DOES NOT PROVIDE A BASIS FOR ESTABLISHING NOTICE OF PROBABLE ERROR IN VIEW OF THE WIDE VARIANCE IN BIDS GENERALLY RECEIVED IN SALES OF GOVERNMENT SURPLUS PROPERTY. MOREOVER, WHEN CONSIDERING THAT THE ACQUISITION COST FOR THE TAPING MACHINE IS $204.43, THE RATE OF RETURN, AS REFLECTED BY THE HIGH BID OF $51 THEREFOR, MAY NOT BE HELD TO BE EXCESSIVE. UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, THERE MAY BE REFUNDED TO MR. THEIS ONLY THAT PART OF THE BID DEPOSIT WHICH MAY BE IN EXCESS OF 20 PERCENT OF THE PURCHASE PRICE OF THE ITEM AS PROVIDED IN ARTICLE 7,"DEFAULT," OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE MEMORANDUM DATED MARCH 10, 1961, FROM THE OFFICER IN CHARGE, AND THE COPY OF THE ABSTRACT OF BIDS, ARE RETURNED HEREWITH.