B-146054, JUN. 20, 1961

B-146054: Jun 20, 1961

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER (R11.2) DATED JUNE 2. THE RECORD SHOWS THAT A NUMBER OF ITEMS OF SURPLUS GOVERNMENT PROPERTY WERE OFFERED FOR SALE ON APRIL 19. WHEN BIDS WERE OPENED ON APRIL 19. AWARD OF ITEM NO. 10 WAS MADE TO IT ON APRIL 19. 126.01 SHOULD HAVE BEEN FOR ITEM NO. 110. THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED AND AWARD OF A CONTRACT MADE. THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER AT THE TIME OF ACCEPTANCE OF THE BID WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF SUCH ERROR.

B-146054, JUN. 20, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER (R11.2) DATED JUNE 2, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, CONCERNING THE REQUEST MADE BY KRIEGER SALVAGE COMPANY, WILMINGTON, CALIFORNIA, FOR RELIEF UNDER CONTRACT NO. N63068S-49951 ON THE GROUND OF AN ERROR IN ITS BID ON ITEM NO. 10.

THE RECORD SHOWS THAT A NUMBER OF ITEMS OF SURPLUS GOVERNMENT PROPERTY WERE OFFERED FOR SALE ON APRIL 19, 1961, BY SPOT BID SALE ADVERTISEMENT ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA. WHEN BIDS WERE OPENED ON APRIL 19, 1961, AS SCHEDULED, TEN BIDS HAD BEEN RECEIVED ON ITEM NO. 10, RANGING FROM $2,126.01 TO $15, WITH THE KRIEGER SALVAGE COMPANY BEING THE HIGHEST BIDDER ON THE ITEM. AWARD OF ITEM NO. 10 WAS MADE TO IT ON APRIL 19, 1961, UNDER CONTRACT NO. N63068S-49951. UPON RECEIPT OF THE NOTIFICATION OF AWARD THE PURCHASER IN LETTER DATED APRIL 24, 1961, ADVISED THE SALES AGENCY THAT IT HAD INTENDED TO PLACE A BID ON ITEM NO. 110; THAT IT HAD BID ON SINGLE CARDS FOR ITEMS NOS. 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 AND 18, ALL FOR THE SAME TYPE OF ALTERNATING SETS, AT "$186.01" EACH, PER CARD; AND THAT ON ITEMS NOS. 108, 109 AND 110 FOR 15,000 NO. FORK LIFTS IT HAD BID $2,126.01 EACH, PER CARD, SO THAT THE SECOND CARD MARKED ITEM NO. 10 FOR $2,126.01 SHOULD HAVE BEEN FOR ITEM NO. 110. KRIEGER SALVAGE COMPANY REQUESTED THAT, BECAUSE OF THE ERROR IN SUBMITTING ITS BID AT $2,126.01 ON ITEM NO. 10 RATHER THAN ITEM NO. 110, IT BE RELEASED FROM THE AWARD OF ITEM NO. 10.

THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED AND AWARD OF A CONTRACT MADE, THE BIDDER MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER AT THE TIME OF ACCEPTANCE OF THE BID WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF SUCH ERROR.

EXAMINATION OF THE ABSTRACT OF BIDS RECEIVED DISCLOSES THAT KRIEGER SALVAGE COMPANY SUBMITTED TWO SPOT BID CARDS ON ITEM NO. 10 WITH QUOTATIONS RESPECTIVELY OF $2,126.01 AND $186.86, BUT NO BID CARD ON ITEM NO. 110. THE FIVE HIGH BIDS RECEIVED ON ITEM NO. 110 RANGED FROM $2,411 TO $2,011. THE ACQUISITION COST OF ITEM NO. 10 IS GIVEN AS $4,000 AND THAT OF ITEM NO. 110 AS $8,000.

IN HIS STATEMENT OF FACTS PERTAINING TO THE SALE TRANSACTION, THE CONTRACTING OFFICER STATES THAT HE WAS NOT AWARE AT THE TIME OF MAKING THE AWARD ON ITEM NO. 10 OF THE POSSIBILITY OF ERROR IN THE BID, BUT UPON THE EVIDENCE SINCE SUBMITTED BY THE COMPANY HE IS CONVINCED THAT AN ERROR, AS ALLEGED, WAS MADE AND THAT THE COMPANY'S BID OF $2,126.01 WAS NOT INTENDED FOR ITEM NO. 10. ALSO, IT IS NOW THE CONTRACTING OFFICER'S OPINION THAT HE SHOULD HAVE BEEN AWARE OF THE POSSIBILITY OF ERROR IN THE COMPANY'S BID OF $2,126.01 ON ITEM NO. 10. IT IS, THEREFORE, HIS RECOMMENDATION, CONCURRED IN BY THE ASSISTANT CHIEF FOR PURCHASING, THAT THE CONTRACT AS TO ITEM NO. 10 BE CANCELED WITHOUT ANY OBLIGATION TO KRIEGER SALVAGE COMPANY.

INASMUCH AS THE COMPANY SUBMITTED TWO WIDELY VARYING PRICES FOR THE SAME ITEM WE BELIEVE THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED ERROR AND REQUESTED VERIFICATION OF THE BIDS BEFORE AWARDING THE CONTRACT. UNDER THE FACTS REPORTED IN THIS CASE, WE ARE OF THE VIEW THAT THE AWARD AS TO ITEM NO. 10 SHOULD BE CANCELED WITHOUT OBLIGATION TO THE CONTRACTOR.