B-148714, MAY 4, 1962

B-148714: May 4, 1962

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO YOUR ASSISTANT COUNSEL'S LETTER OF APRIL 19. ITEM 156 COVERED 224 USED TELESCOPES IN FAIR CONDITION AND BIDDERS WERE REQUESTED TO BID ON INCREMENTS OF 50 OR MORE. THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION WAS ADVISED THAT IT HAD BEEN AWARDED ITEM 156 AND FIVE OTHER ITEMS. THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION ADVISED THAT A DECIMAL POINT ERROR WAS MADE BY ITS ACCOUNTANT IN QUOTING ON ITEM 156 AND THAT THE PRICE FOR THAT ITEM SHOULD HAVE READ $4.925 EACH INSTEAD OF $49.25 EACH. ON WHICH ITEM 156 WAS LISTED. THE PRICE QUOTED BY THE PURCHASING MISSION FOR ITEM 156 IS APPROXIMATELY 27 TIMES THE AMOUNT OF THE NEXT HIGH BID ON THAT ITEM WHICH COVERED USED TELESCOPES IN "FAIR CONDITION.'.

B-148714, MAY 4, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO YOUR ASSISTANT COUNSEL'S LETTER OF APRIL 19, 1962, DSAH-G, REQUESTING A DECISION AS TO WHETHER THE REQUEST OF THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION FOR RELIEF UNDER SALES CONTRACT O.I (S) 28-013-62-1022 MAY BE GRANTED.

THE CONSOLIDATED SURPLUS SALES OFFICE, FORT DIX, NEW JERSEY, BY INVITATION NO. 28-013-S-62-32, ANNOUNCED A SPOT BID SALE OF MISCELLANEOUS SURPLUS PROPERTY. ITEM 156 COVERED 224 USED TELESCOPES IN FAIR CONDITION AND BIDDERS WERE REQUESTED TO BID ON INCREMENTS OF 50 OR MORE.

THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION SUBMITTED A BID CARD CONTAINING A HIGH BID ON ITEM 156 OF $49.25 EACH FOR A QUANTITY OF 50 TELESCOPES. THE NINE OTHER BIDS ON ITEM 156 RANGED FROM $1.81 EACH TO $0.11 EACH. BY "NOTICE OF AWARD, RELEASE DOCUMENT, AND STATEMENT" DATED OCTOBER 6, 1961, THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION WAS ADVISED THAT IT HAD BEEN AWARDED ITEM 156 AND FIVE OTHER ITEMS.

IN A LETTER DATED OCTOBER 9, 1961, THE YUGOSLAV ARMY AND NAVY PURCHASING MISSION ADVISED THAT A DECIMAL POINT ERROR WAS MADE BY ITS ACCOUNTANT IN QUOTING ON ITEM 156 AND THAT THE PRICE FOR THAT ITEM SHOULD HAVE READ $4.925 EACH INSTEAD OF $49.25 EACH. THE PURCHASING MISSION REQUESTED THAT IT BE PERMITTED EITHER TO CORRECT ITS BID ON ITEM 156 OR TO WITHDRAW ITS BID ON THAT ITEM. BY LETTER DATED DECEMBER 13, 1961, THE PURCHASING MISSION SUBMITTED THE STATEMENT OF THE ACCOUNTANT WHO MADE THE ERROR IN ITS BID. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE PURCHASING MISSION SUBMITTED ITS WORKSHEET, WHICH APPEARS TO BE A PAGE FROM THE INVITATION, ON WHICH ITEM 156 WAS LISTED. THE WORKSHEET SHOWS OPPOSITE THE DESCRIPTION OF ITEM 156 THE FOLLOWING NOTATION: "50 TIMES 4.925 EQUALS.'

THE PRICE QUOTED BY THE PURCHASING MISSION FOR ITEM 156 IS APPROXIMATELY 27 TIMES THE AMOUNT OF THE NEXT HIGH BID ON THAT ITEM WHICH COVERED USED TELESCOPES IN "FAIR CONDITION.' IN HIS REPORT, IN WHICH HE RECOMMENDED THAT THE PURCHASING MISSION BE PERMITTED TO CORRECT ITS BID, THE CONTRACTING OFFICER STATED THAT AT THE TIME OF THE AWARD OF ITEM 156 TO THE PURCHASING MISSION, HE THOUGHT THAT IT WAS QUITE UNUSUAL FOR A BIDDER TO QUOTE SUCH A HIGH PRICE FOR THE EQUIPMENT COVERED BY THAT ITEM SINCE VARIATIONS IN BIDDING ARE, NORMALLY, NOT SO HIGH FOR LIKE-TYPE ITEMS OFFERED FOR SALE. THE CONTRACTING OFFICER ALSO STATED, IN EFFECT, THAT BECAUSE THE ITEM WAS BEING SOLD BY THE SPOT BID SALE METHOD AND AWARDS WERE MADE PROGRESSIVELY, CIRCUMSTANCES DID NOT PERMIT VERIFICATION OF THE BID AT THAT PARTICULAR MOMENT.

INASMUCH AS THE BID OF THE PURCHASING MISSION FOR ITEM 156 WAS UNUSUALLY HIGH FOR THE ITEM IN QUESTION, WHICH APPARENTLY RAISED A DOUBT IN THE MIND OF THE CONTRACTING OFFICER AS TO ITS ACCURACY, WE THINK THAT THE PURCHASING MISSION SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID PRICE AS TO THIS ITEM PRIOR TO ITS ACCEPTANCE.

ACCORDINGLY, SINCE THE PURCHASING MISSION HAS ESTABLISHED ITS INTENDED BID PRICE OF $4.925 EACH AND SINCE IT WOULD APPEAR THAT A PRICE IN EXCESS OF $4.925 WOULD NOT BE RECEIVED UPON READVERTISING, OUR OFFICE WILL HAVE NO OBJECTION TO AN AMENDMENT OF THE CONTRACT TO REFLECT THE PRICE INTENDED BY THE PURCHASING MISSION FOR THAT ITEM.