B-148923, JUN. 1, 1962

B-148923: Jun 1, 1962

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WHILE ALL BIDDERS WERE CAUTIONED TO INSPECT THE PROPERTY OFFERED FOR SALE. SINCE COLUMBIA'S BID WAS THE HIGHEST RECEIVED FOR ITEM 66 AND ANOTHER ITEM. AWARD WAS MADE TO IT ON FEBRUARY 15. PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS ADVISED BIDDERS THAT "THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION.'. THE RECORD SHOWS THAT THE RADIO RECEIVERS WERE ORIGINALLY CLASSIFIED BY THE DISPOSAL ACTIVITY AS SCRAP. THAT THEY WERE RECLASSIFIED AS USEABLE BY REPRESENTATIVE OF THE SALES OFFICE ON THE BASIS OF A SUPERFICIAL VISUAL INSPECTION OF THE RECEIVERS. THAT: "* * * THIS ACTION WAS APPARENTLY TAKEN BASED ONLY ON THE OUTWARD APPEARANCE OF THE RECEIVERS. INVESTIGATION AFTER RECEIPT OF THE COMPLAINT REVEALED THAT THE CONTRACTOR'S ALLEGATION (OF ABSOLUTE JUNK) WAS CORRECT AND THAT THE RECEIVERS HAD BEEN CANNIBALIZED AND DELIBERATELY DAMAGED BY THE SQUADRON PRIOR TO TRANSFER TO THE HOLDING ACTIVITY.'.

B-148923, JUN. 1, 1962

LIEUTENANT GENERAL ANDREW T. MCNAMARA:

BY LETTER DATED MAY 15, 1962, WITH ENCLOSURES, THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, REQUESTED OUR DECISION AS TO WHETHER SALES CONTRACT NO. (34-601/62-S-625 AWARDED TO COLUMBIA ELECTRONIC SALES, INC., UNDER INVITATION NO. 34-601-S-62-34 MAY BE RESCINDED AS TO ITEM 66.

UNDER THE SALES INVITATION DATED JANUARY 17, 1962, COLUMBIA SUBMITTED A BID OF $41.08 EACH FOR 11 RADIO RECEIVERS DESCRIBED IN ITEM 66 AS:

"MFR. FARNSWORTH TELEVISION AND RADIO CORP. OR EQUAL. LOOSE PIECES. EST. TOTAL WT. 550 LBS. * * * USED, CONDITION VARIES.'

OTHER BIDS ON THIS ITEM RANGED FROM $27.33 EACH TO $0.50 EACH. WHILE ALL BIDDERS WERE CAUTIONED TO INSPECT THE PROPERTY OFFERED FOR SALE, COLUMBIA FAILED TO INSPECT THE PROPERTY COVERED BY ITEM 66. SINCE COLUMBIA'S BID WAS THE HIGHEST RECEIVED FOR ITEM 66 AND ANOTHER ITEM, AWARD WAS MADE TO IT ON FEBRUARY 15, 1962.

PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS ADVISED BIDDERS THAT "THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION.' THE RECORD SHOWS THAT THE RADIO RECEIVERS WERE ORIGINALLY CLASSIFIED BY THE DISPOSAL ACTIVITY AS SCRAP, THAT THEY WERE RECLASSIFIED AS USEABLE BY REPRESENTATIVE OF THE SALES OFFICE ON THE BASIS OF A SUPERFICIAL VISUAL INSPECTION OF THE RECEIVERS. THE DEFENSE LOGISTICS SERVICES CENTER STATED, IN THIS CONNECTION, THAT:

"* * * THIS ACTION WAS APPARENTLY TAKEN BASED ONLY ON THE OUTWARD APPEARANCE OF THE RECEIVERS, WITHOUT INSPECTION BY A QUALIFIED INSPECTOR, AND WITHOUT CHECKING WITH THE SQUADRON WHICH HAD TURNED THEM IN. INVESTIGATION AFTER RECEIPT OF THE COMPLAINT REVEALED THAT THE CONTRACTOR'S ALLEGATION (OF ABSOLUTE JUNK) WAS CORRECT AND THAT THE RECEIVERS HAD BEEN CANNIBALIZED AND DELIBERATELY DAMAGED BY THE SQUADRON PRIOR TO TRANSFER TO THE HOLDING ACTIVITY.'

AS STATED BY THE ASSISTANT COUNSEL IN HIS LETTER OF MAY 15, 1962, WE AGREE THAT WHEN THE CONTRACTING OFFICER, THROUGH HIS REPRESENTATIVES, ELECTED TO MAKE AN INSPECTION OF THE PROPERTY AND BASE THE DESCRIPTION USED IN THE INVITATION ON SUCH INSPECTION RATHER THAN RELY ON THE DESCRIPTION OF THE PROPERTY AS SHOWN ON THE TURN-IN DOCUMENTS, HE HAD A DUTY TO MAKE A REASONABLE INSPECTION. SINCE THE RECEIVERS HAD BEEN IDENTIFIED AS SCRAP BY THE DISPOSAL ACTIVITY AT TINKER AIR FORCE BASE, WE THINK THAT THE CASUAL VISUAL INSPECTION MADE BY THE CONTRACTING OFFICER'S REPRESENTATIVES WAS INADEQUATE AND UNREASONABLE. CONSEQUENTLY, IT MUST BE CONCLUDED THAT THE DESCRIPTION OF THE RECEIVERS APPEARING IN THE INVITATION WAS NOT "BASED ON THE BEST AVAILABLE INFORMATION; " THAT THE ACCEPTANCE OF THE BID OF COLUMBIA DID NOT RESULT IN A LEGAL END BINDING CONTRACT; AND THEREFORE RESCISSION OF THE CONTRACT AS TO ITEM 66 AND REFUND OF THE PURCHASE PRICE WOULD BE WARRANTED. SEE B-135542, APRIL 28, 1958.