B-146280, AUG. 2, 1961

B-146280: Aug 2, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO LETTER OF JUNE 28. THE LOT OF ARTICLES INCLUDED ONE DEADLOAD CATAPULT (ITEM 92) FOR WHICH THREE BIDS WERE RECEIVED RANGING FROM $10.84 TO $444. WAS REQUESTED TO VERIFY THE CORRECTNESS OF ITS PROPOSAL. THEREAFTER AWARD OF THE SUBJECT CONTRACT WAS MADE. THE REQUEST FOR RELIEF WAS SUPPORTED BY THE SUBMISSION OF CERTAIN PAPERS PURPORTING TO SHOW THAT THE OFFER SHOULD HAVE BEEN $44. IT IS A BASIC RULE THAT BIDS MAY NOT BE CHANGED AFTER THE TIME FIXED FOR OPENING. 17 COMP. IN THAT CONNECTION IT HAS BEEN HELD THAT CORRECTION OF AN ERRONEOUS OFFER IS NOT CONSIDERED TO BE AN EXCEPTION TO THE RULE. RATHER IS THE SUBSTITUTION OF AN INTENDED BID. THE EVIDENCE PRESENTED IS INSUFFICIENT TO OVERCOME THE VERIFICATION MADE BY THE BIDDER WHEN IT WAS REQUESTED TO CONFIRM ITS OFFER.

B-146280, AUG. 2, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER OF JUNE 28, 1961, WITH ENCLOSURES, FILE R11.4, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO WHETHER THE FIRM OF HALL AND HALL, SAN MARTIN, CALIFORNIA, SHOULD BE DENIED THE RELIEF IT REQUESTED IN CONNECTION WITH THE PERFORMANCE OF CONTRACT N63068S-50125, DATED MAY 3, 1961.

BY INVITATION NO. B-170-61-63068, THE NAVY CONSOLIDATED SURPLUS SALES OFFICE, OAKLAND, CALIFORNIA, SOUGHT OFFERS TO PURCHASE CERTAIN SURPLUS PROPERTY IDENTIFIED AS MISCELLANEOUS AVIATION MATERIALS. THE LOT OF ARTICLES INCLUDED ONE DEADLOAD CATAPULT (ITEM 92) FOR WHICH THREE BIDS WERE RECEIVED RANGING FROM $10.84 TO $444, AS COMPARED TO THE ACQUISITION COST OF $27,000. BECAUSE OF THE DISPARITY IN THE BIDS THE COMPLAINANT HERE WHO SUBMITTED THE HIGHEST OFFER, WAS REQUESTED TO VERIFY THE CORRECTNESS OF ITS PROPOSAL. THE BIDDER ORALLY CONFIRMED ITS BID ON MAY 3, 1961, AND THEREAFTER AWARD OF THE SUBJECT CONTRACT WAS MADE.

UPON RECEIPT OF THE CONTRACT THE BIDDER ALLEGED THAT IT INTENDED TO BID $44 FOR ITEM 92 INSTEAD OF $444, AND REQUESTED PERMISSION TO REDUCE ITS OFFER TO $144, OR BE RELEASED FROM THE CONTRACT. THE REQUEST FOR RELIEF WAS SUPPORTED BY THE SUBMISSION OF CERTAIN PAPERS PURPORTING TO SHOW THAT THE OFFER SHOULD HAVE BEEN $44. WITH RESPECT TO THE CONTRACTOR'S REQUEST TO REDUCE THE QUOTATION TO $144, IT IS A BASIC RULE THAT BIDS MAY NOT BE CHANGED AFTER THE TIME FIXED FOR OPENING. 17 COMP. GEN. 575; 38 ID. 76. AND, IN THAT CONNECTION IT HAS BEEN HELD THAT CORRECTION OF AN ERRONEOUS OFFER IS NOT CONSIDERED TO BE AN EXCEPTION TO THE RULE, BUT RATHER IS THE SUBSTITUTION OF AN INTENDED BID, ESTABLISHED BY VIRTUALLY CONCLUSIVE EVIDENCE, FOR THE BID INCORRECTLY PREPARED. THE EVIDENCE PRESENTED IS INSUFFICIENT TO OVERCOME THE VERIFICATION MADE BY THE BIDDER WHEN IT WAS REQUESTED TO CONFIRM ITS OFFER.

PARAGRAPH 7 OF THE GENERAL SALES TERMS AND CONDITIONS OF THE INVITATION PROVIDES THAT IF THE PURCHASER FAILS TO PAY THE BALANCE OF THE PURCHASE PRICE AND REMOVE THE GOODS PURCHASED, THE GOVERNMENT MAY ELECT TO RETAIN THE MATERIAL, AND ASSESS AS LIQUIDATED DAMAGES, A SUM EQUAL TO 20 PERCENT OF THE PURCHASE (BID) PRICE. THE CLAIMANT'S BID, WHICH WAS REGULAR ON ITS FACE, WAS ACCEPTED IN GOOD FAITH WITHOUT KNOWLEDGE OF ERROR, AND SINCE THE ERROR WAS NOT ALLEGED UNTIL AFTER AWARD, THE ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313.

IN THE CIRCUMSTANCES, THE PURCHASER SHOULD BE CALLED UPON TO REMOVE THE PROPERTY IN ACCORDANCE WITH THE TERMS OF THE PURCHASE. IN THE EVENT OF DEFAULT THE GOVERNMENT'S RIGHTS, AS SET FORTH IN PARAGRAPH 7 OF THE CONTRACT, SHOULD BE INVOKED.