B-147780, DEC. 28, 1961

B-147780, DEC. 28, 1961

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED DECEMBER 11, 1961, FILE R11.4, 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 ALLEGED BY AMERICAN AERO PARTS, LOS ANGELES, CALIFORNIA, TO HAVE BEEN MADE IN ITS BID ON WHICH SALES CONTRACT NO. N63068S-51983 IS BASED.

BY INVITATION NO. B-37-62-63068 ISSUED AUGUST 18, 1961, THE U.S. NAVY CONSOLIDATED SURPLUS SALES OFFICE, OAKLAND, CALIFORNIA, REQUESTED BIDS--- TO BE OPENED SEPTEMBER 8, 1961--- FOR THE PURCHASE OF MISCELLANEOUS HARDWARE AND HAND TOOLS. ITEM NO. 16 COVERED MATERIAL DESCRIBED AS FOLLOWS:

"ROD END, P/N 490 HT8, STEEL PLATED, OVER-ALL LENGTH 1 3/4 INCHES, THREADED AND 1/2 INCHES .D., 28 THREAD, OPPOSITE END LENGTH 5/8 INCHES BY 7/16 INCHES I.D. USED ON HRS3 AIRCRAFT, ACQUISITION: $3,762.80. UNUSED - APPARENTLY EXCELLENT CONDITION. EST.WT. 1,600 LBS. CU 56. IN BOXES - PACKED FOR SHIPMENT.

QUANTITY - 37,628 EACH"

THE INVITATION INCLUDED A PROVISION AS FOLLOWS: "BID DEPOSIT OF 20 PERCENT OF TOTAL AMOUNT OF BIDS IS REQUIRED.'

IN RESPONSE TO THE INVITATION, AMERICAN AERO PARTS SUBMITTED A BID ON 17 ITEMS IN A TOTAL AMOUNT OF $2,852.64, INCLUDING A UNIT BID OF $0.025 (TOTAL BID $940.70) ON ITEM NO. 16. HOWEVER, IT IS REPORTED THAT THE BID WAS ACCOMPANIED BY A BID DEPOSIT OF ONLY $200 ALTHOUGH 20 PERCENT OF THE ENTIRE BID WOULD BE $570.53. THE OTHER SIX BIDS RECEIVED ON ITEM NO. 16 WERE IN THE TOTAL AMOUNT OF $462.82, $45.15, $37.63, $13.17, $9.41 AND $8.

ON SEPTEMBER 14, 1961, AWARD WAS MADE TO AMERICAN AERO PARTS AS HIGH BIDDER ON ITEM NOS. 16 AND 17 IN A TOTAL AMOUNT OF $943.73. IN ITS LETTER OF SEPTEMBER 15, 1961, AFTER RECEIPT OF THE AWARD, AMERICAN AERO PARTS ALLEGED AN ERROR IN ITS BID ON ITEM NO. 16, STATING THAT THE UNIT PRICE SHOULD HAVE BEEN $0.0025 INSTEAD OF $0.025, MAKING A TOTAL PRICE OF $94.07 INSTEAD OF $940.70, AND REQUESTING THAT BOTH THE UNIT PRICE AND THE TOTAL PRICE BE CHANGED ACCORDINGLY. WITH ITS LETTER OF OCTOBER 2, 1961, THE BIDDER TRANSMITTED A PHOTOSTATIC COPY OF ITS ORIGINAL WORK SHEET SHOWING A NOTATION ON ITEM NO. 16 AS FOLLOWS: "USE .0025 $940.70; " AND IT WAS ALLEGED THAT THE ERROR OCCURRED IN MAKING THE PRICE EXTENSION.

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER AMERICAN AERO PARTS MADE A MISTAKE IN ITS BID BUT WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT. THE INVITATION WAS CLEAR AS TO THE MATERIALS COVERED BY THE VARIOUS ITEMS AND THEREFORE ANY ERROR WHICH MAY HAVE BEEN MADE WAS DUE SOLELY TO THE NEGLIGENCE OF AMERICAN AERO PARTS AND SUCH ERROR WAS IN NO WAY CONTRIBUTED TO BY THE GOVERNMENT. THE BID SUBMITTED WAS UNAMBIGUOUS AND THERE WAS NOTHING ON ITS FACT TO INDICATE ERROR. NEITHER WAS THE DISPARITY BETWEEN THE BID OF AMERICAN AERO PARTS AND THE OTHER BIDS RECEIVED SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID, IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE AND SURPLUS PROPERTY.

WITH RESPECT TO THE BID DEPOSIT, IT IS NOTED THAT ITS AMOUNT ($200) WAS MORE THAN 20 PERCENT OF THE TOTAL AMOUNT OF THE AWARD ($943.73). IN 39 COMP. GEN. 617 IT WAS HELD (QUOTING SYLLABUS):

"A BID DEPOSIT WHICH WAS NOT IN AN AMOUNT SUFFICIENT TO COVER ALL THE ITEMS OF SURPLUS GOVERNMENT PROPERTY BID UPON AS REQUIRED BY THE INVITATION, BUT WHICH WAS SUFFICIENT TO COVER THOSE ITEMS AND QUANTITIES ON WHICH THE BIDDER WAS THE ELIGIBLE HIGH BIDDER, DOES NOT REQUIRE REJECTION OF THE BID FOR INSUFFICIENT BID SECURITY WHEN THE INVITATION DOES NOT CONTAIN ANY LIMITATION ON THE MINIMUM QUANTITIES WHICH MAY BE PURCHASED AND WHEN AWARDS TO SEVERAL BIDDERS ARE CONTEMPLATED.'

THAT DECISION IS APPLICABLE TO THE INSTANT MATTER.

FOR THE REASONS ABOVE SET FORTH, THE AWARD TO AMERICAN AERO PARTS MAY NOT BE CANCELLED.

THE PAPERS TRANSMITTED WITH THE LETTER OF DECEMBER 11, 1961, ARE RETURNED HEREWITH.