B-147205, OCT. 24, 1961

B-147205: Oct 24, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 15. TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. N63067- 6660 IS BASED. THE BID OF THE CORPORATION ON ITEM 8 WAS ACCEPTED ON AUGUST 31. IT IS REPORTED THAT FOLLOWING THE AWARD. ITS REPRESENTATIVE TELEPHONED TO INQUIRE ABOUT THE BID RESULTS AND THAT SUCH INFORMATION WAS FURNISHED TO THE REPRESENTATIVE. IT IS ALSO REPORTED THAT SHORTLY THEREAFTER A SECOND TELEPHONE CALL WAS RECEIVED FROM MR. BARDON ALSO STATED THAT IT WAS OBVIOUS THAT HE HAD MADE AN ERROR AS IT WAS UNLIKELY THAT A BIDDER WOULD QUOTE A PRICE OF $5. IN WHICH HE WAS ADVISED THAT THAT OFFICE WISHED TO BID APPROXIMATELY $22 PER TON ON THE MACHINE COVERED BY ITEM 18 WHICH.

B-147205, OCT. 24, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 15, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, FILE R11.4, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY LURIA BROTHERS AND COMPANY, INC., BALA-CYNWYD, PENNSYLVANIA, TO HAVE BEEN MADE IN ITS BID ON WHICH CONTRACT NO. N63067- 6660 IS BASED.

THE CONSOLIDATED SURPLUS SALES OFFICE, NORFOLK, VIRGINIA, BY INVITATION NO. B-24-62-63067, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS, INCLUDING ITEM 8 DESCRIBED AS A HYDRAULIC PRESS, USED, FAIR CONDITION, YEAR OF MANUFACTURE 1943, ACQUISITION COST $4,612.82. RESPONSE LURIA BROTHERS AND COMPANY, INC., SUBMITTED A BID OFFERING TO PURCHASE THE HYDRAULIC PRESS COVERED BY ITEM 8 AT A PRICE OF $5,949. THE BID OF THE CORPORATION ON ITEM 8 WAS ACCEPTED ON AUGUST 31, 1961.

IT IS REPORTED THAT FOLLOWING THE AWARD, BUT PRIOR TO RECEIPT OF NOTICE THEREOF BY THE PURCHASER, ITS REPRESENTATIVE TELEPHONED TO INQUIRE ABOUT THE BID RESULTS AND THAT SUCH INFORMATION WAS FURNISHED TO THE REPRESENTATIVE. IT IS ALSO REPORTED THAT SHORTLY THEREAFTER A SECOND TELEPHONE CALL WAS RECEIVED FROM MR. JOSEPH D. BARDON OF LURIA BROTHERS AND COMPANY, INC., WHO ALLEGED THAT HE HAD INTENDED TO BID ON ITEM 18, AN ENGINE LATHE, INSTEAD OF ITEM 8.

IN A CONFIRMING LETTER DATED SEPTEMBER 1, 1961, MR. BARDON STATED THAT HE HAD RECEIVED A LETTER FROM THE INDUSTRIAL MACHINERY DIVISION OF THE CORPORATION INSTRUCTING HIM TO BID ON ITEM 18; AND THAT IN WRITING DOWN THE NUMBER OF THE ITEM ON HIS WORKSHEET HE ERRONEOUSLY LISTED IT AS 8 INSTEAD OF 18. MR. BARDON ALSO STATED THAT IT WAS OBVIOUS THAT HE HAD MADE AN ERROR AS IT WAS UNLIKELY THAT A BIDDER WOULD QUOTE A PRICE OF $5,949 FOR A SMALL 60-TON CAPACITY PRESS WHICH ORIGINALLY COST APPROXIMATELY $4,600 AND HE REQUESTED THAT THE CORPORATION BE PERMITTED TO WITHDRAW ITS BID ON ITEM 8 OR, IN THE ALTERNATIVE, THAT ITS BID PRICE OF $5,949 BE MADE APPLICABLE TO ITEM 18. IN SUPPORT OF HIS ALLEGATION OF ERROR, MR. BARDON SUBMITTED HIS WORKSHEET AND A COPY OF A LETTER DATED AUGUST 17, 1961, RECEIVED FROM THE BETHLEHEM, PENNSYLVANIA, OFFICE OF THE CORPORATION, IN WHICH HE WAS ADVISED THAT THAT OFFICE WISHED TO BID APPROXIMATELY $22 PER TON ON THE MACHINE COVERED BY ITEM 18 WHICH, IT STATED, WEIGHED APPROXIMATELY 265 TO 275 TONS. THE WORKSHEET SHOWS THE FOLLOWING NOTATION: "ITEM 8 LATHE ENGINE.' THE INVITATION SHOWS THAT ITEM 8 IS A HYDRAULIC PRESS AND THAT ITEM 18, THE ITEM ON WHICH THE CORPORATION INTENDED TO BID, COVERS AN ENGINE LATHE. THE WORKSHEET ALSO SHOWS THAT THE CORPORATION ESTIMATED THE WEIGHT OF THE MACHINE AS 270 GROSS TONS AND THAT IT MULTIPLIED SUCH NUMBER BY A PRICE OF $22 TO ARRIVE AT A TOTAL PRICE OF $5,940, TO WHICH IT ADDED $9 TO ARRIVE AT ITS BID PRICE OF $5,949.

THE INVITATION INDICATES THAT THE GOVERNMENT'S ORIGINAL ACQUISITION COST OF THE HYDRAULIC PRESS COVERED BY ITEM 8 WAS $4,612.82 AND THAT THE SIX OTHER BIDDERS ON ITEM 8 QUOTED PRICES RANGING FROM $911.71 TO $1.01. THUS, THE CORPORATION'S BID OF $5,949 FOR ITEM 8 IS SOMEWHAT OUT OF LINE WITH THE OTHER BIDS RECEIVED ON THAT ITEM. WHILE A MERE DIFFERENCE IN THE PRICES QUOTED FOR SURPLUS GOVERNMENT PROPERTY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW PROPERTY FOR SALE TO THE GOVERNMENT, IT MUST BE CONCEDED THAT IT IS UNLIKELY THAT A BIDDER, AS HERE, INTENTIONALLY WOULD OFFER FOR A MACHINE MANUFACTURED IN 1943 ALMOST 129 PERCENT OF WHAT WAS KNOWN TO BE THE ACQUISITION COST OF THE ITEM. THE CIRCUMSTANCES, IT WOULD APPEAR THAT A REQUEST FOR VERIFICATION OF THE BID WOULD HAVE BEEN IN ORDER BEFORE ITS ACCEPTANCE.

ON THE RECORD, THERE IS NO ROOM FOR DOUBT THAT LURIA BROTHERS AND COMPANY, INC., MADE AN ERROR IN ITS BID, AS ALLEGED. ACCORDINGLY, SINCE THE CORPORATION ALLEGED THAT IT MADE AN ERROR BEFORE IT RECEIVED NOTICE OF AWARD AND SINCE IT APPEARS THAT IT HAS NOT TAKEN ANY FURTHER STEPS TOWARDS COMPLETION OF THE CONTRACT, CONTRACT NO. N63067-6660 MAY BE CANCELED WITHOUT LIABILITY TO THE CONTRACTOR.