B-146655, SEP. 15, 1961

B-146655: Sep 15, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED AUGUST 11. TO HAVE BEEN MADE IN ITS BID ON ITEM 2 UNDER CONTRACT N63118S-53389. THE COMPANY'S BID WAS ACCEPTED AS TO ITEMS 2 AND 13. A COMPARISON OF BIDS ON ITEM 2 IS INCONCLUSIVE. WHILE THERE IS QUITE A PRICE DIFFERENTIAL BETWEEN THE COMPANY'S BID OF $142 EACH AND THE NEXT HIGHEST BID ON ITEM 2 OF $45.888 EACH. THIS IS NOT UNUSUAL AND THEREFORE INCONCLUSIVE. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE. THE ALLEGED ERROR WAS NOT APPARENT ON THE FACE OF THE PROPOSAL.

B-146655, SEP. 15, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED AUGUST 11, 1961, WITH ENCLOSURES, FROM THE ACTING ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY RYAN AND ISBELL, GENERAL ENGINEERING CONTRACTORS, TO HAVE BEEN MADE IN ITS BID ON ITEM 2 UNDER CONTRACT N63118S-53389.

THE CONSOLIDATED SURPLUS SALES OFFICE, NAVAL SUPPLY DEPOT, CLEAR FIELD, OGDEN, UTAH, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF PROPERTY. THE COMPANY'S BID WAS ACCEPTED AS TO ITEMS 2 AND 13. THE COMPANY UPON RECEIPT OF THE CONTRACT ALLEGED ERROR IN ITS BID ON ITEM 2 AND STATED THAT ITS BID ON THAT ITEM HAD BEEN INTENDED FOR ITEM 1.

A COMPARISON OF BIDS ON ITEM 2 IS INCONCLUSIVE, INASMUCH AS THE BIDS RANGED FROM THE COMPANY'S HIGH BID OF $426 FOR THE LOT OR $142 EACH TO THE LOW BID OF $33.33 EACH. WHILE THERE IS QUITE A PRICE DIFFERENTIAL BETWEEN THE COMPANY'S BID OF $142 EACH AND THE NEXT HIGHEST BID ON ITEM 2 OF $45.888 EACH, THIS IS NOT UNUSUAL AND THEREFORE INCONCLUSIVE.

IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICE BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICE QUOTED ON NEW SUPPLIES OR EQUIPMENT TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE. SEE UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; AND ID. 601.

THE ALLEGED ERROR WAS NOT APPARENT ON THE FACE OF THE PROPOSAL, THUS THERE APPEARS NO BASIS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE PROPOSAL. IT FOLLOWS THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER NOTICE OF THE AWARD OF THE CONTRACT. SUCH AWARD CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED WAS UPON THE COMPANY. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 CT.CL. 120, 163. THE COMPANY PLACED A BID ON ITEM 2 NOT ITEM 1, AND SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS ET AL. 93 U.S. 55, 61.

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR RELIEVING RYAN AND ISBELL OF ITS BID.