B-147281, OCT. 24, 1961

B-147281: Oct 24, 1961

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TO THE SECRETARY OF THE NAVY: REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 25. N63070S-61651 IS BASED. THERE WAS NOTHING ON THE FACE OF THE BID OF THE COMPANY TO INDICATE THAT THE PRICE QUOTED THEREIN FOR ITEM 57 WAS INTENDED FOR ITEM 56. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS ON ITEM 57 WERE IN THE AMOUNTS OF $77.13. ALTHOUGH THE BID SUBMITTED BY MORRIS BROTHERS WAS SOMEWHAT HIGHER THAN THE NEXT HIGHEST BID RECEIVED ON ITEM 57. IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY. UNUSED" IS $1. IT CAN BE SAID THAT THE ENGINE REPAIR PARTS HAVE NO VALUE EXCEPT AS SCRAP.

B-147281, OCT. 24, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED SEPTEMBER 25, 1961, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR MORRIS BROTHERS, MIDDLE VILLAGE, NEW YORK, ALLEGES IT MADE IN ITS BID ON WHICH CONTRACT NO. N63070S-61651 IS BASED.

THE CONSOLIDATED SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA, BY INVITATION NO. B-8-62-63070, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, ONE LOT OF ENGINE REPAIR PARTS MANUFACTURED BY LEECE NEVILLE COMPANY, CONDITION UNUSED, ACQUISITION COST $1,970.50, ITEM 57. IN RESPONSE MORRIS BROTHERS SUBMITTED A BID OFFERING TO PURCHASE, AMONG OTHERS, THE ENGINE PARTS COVERED BY ITEM 57 AT A LOT PRICE OF $178.21.

AFTER RECEIVING AN AWARD ON ITEM 57, MORRIS BROTHERS ADVISED THE CONTRACTING OFFICER BY LETTER DATED SEPTEMBER 8, 1961, THAT IT HAD INTENDED TO BID ON ITEM 56, ONE LOT OF DIESEL ENGINE REPAIR PARTS, INSTEAD OF ITEM 57 AND THE COMPANY REQUESTED THAT THE AWARD TO IT BE CANCELED. SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS WORKSHEETS, WHICH APPEAR TO BE COPIES OF DESCRIPTION SHEETS COVERING ITEMS 56 AND 57 AND CERTAIN OTHER ITEMS. THE WORKSHEETS INDICATE A BID OF $178.21 FOR ITEM 56, ONE LOT OF DETROIT DIESEL ENGINE REPAIR PARTS; HOWEVER, NO QUOTATION APPEARS FOR ITEM 57, ONE LOT OF ENGINE REPAIR PARTS MANUFACTURED BY LEECE NEVILLE COMPANY.

THERE WAS NOTHING ON THE FACE OF THE BID OF THE COMPANY TO INDICATE THAT THE PRICE QUOTED THEREIN FOR ITEM 57 WAS INTENDED FOR ITEM 56. THE ABSTRACT OF BIDS SHOWS THAT THE THREE OTHER BIDS ON ITEM 57 WERE IN THE AMOUNTS OF $77.13, $76 AND $7.03. ALTHOUGH THE BID SUBMITTED BY MORRIS BROTHERS WAS SOMEWHAT HIGHER THAN THE NEXT HIGHEST BID RECEIVED ON ITEM 57, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY. IT SHOULD BE NOTED IN THIS CONNECTION THAT THE ACQUISITION COST OF THE ENGINE REPAIR PARTS, DESCRIBED AS "COND. UNUSED" IS $1,970.50. THE BID OF $178.21 WOULD NOT SEEM UNREASONABLE TO ANYONE WITH AUTHORITY TO ACCEPT BIDS UNLESS, PERHAPS, IT CAN BE SAID THAT THE ENGINE REPAIR PARTS HAVE NO VALUE EXCEPT AS SCRAP. FROM THE RECORD SUBMITTED THERE IS NO INDICATION THAT THIS IS THE CASE. MOREOVER, IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES 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. 601. THE SABIN CASE, SUPRA, THE PRICE DISPARITY ON THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. THE COURT, AT PAGE 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID OF MORRIS BROTHERS WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 CT.CL. 120, 163. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL --- AND DOES NOT ENTITLE THE COMPANY TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. ..END :