B-148947, MAY 31, 1962

B-148947, MAY 31, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED MAY 17, 1962, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, REQUESTING OUR DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN WITH RESPECT TO THE RELIEF SOUGHT BY THE CAPCO ALLOY STEEL COMPANY, INGLEWOOD, CALIFORNIA, UNDER CONTRACT NO. N63070A-62645.

IN RESPONSE TO INVITATION NO. B-69-62-63070 ISSUED ON FEBRUARY 26, 1962, BY THE SAN DIEGO DEFENSE SURPLUS SALES OFFICE, THE CAPCO ALLOY STEEL COMPANY SUBMITTED A BID DATED MARCH 5, 1962, OFFERING TO PURCHASE ITEM NO. 11, COVERING AN ESTIMATED 75,000 POUNDS OF UNPREPARED STAINLESS STEEL SCRAP AT $0.056929 A POUND, OR FOR A TOTAL PRICE OF $4,269.68. THREE OTHER BIDS WERE RECEIVED FOR THE ITEM IN THE AMOUNTS OF $0.0445, $0.0421 AND $0.02321 A POUND. THE BID OF THE CAPCO ALLOY STEEL COMPANY, BEING THE HIGHEST BID RECEIVED, WAS ACCEPTED BY THE SURPLUS SALES OFFICE ON MARCH 21, 1962, THEREBY CONSUMMATING CONTRACT NO. N63070S-62645. THE COMPANY NOW REQUESTS RESCISSION OF THE CONTRACT OR A REDUCTION OF $750 IN THE PRICE THEREOF SINCE ITS BID ALLEGEDLY WAS BASED ON THE USE OF RAILROAD LOADING FACILITIES RATHER THAN REMOVAL OF THE PROPERTY BY TRUCK. THE TOTAL PRICE OF $4,269.68 REMAINS DUE UNDER THE CONTRACT, WHICH IS SUPPORTED BY A DEPOSIT COVERED BY AN ANNUAL BID BOND IN THE PENAL SUM OF $5,000. THE PROPERTY HAS NOT BEEN DELIVERED TO THE COMPANY.

PARAGRAPH 32 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION EXPRESSLY SET FORTH, IN CLEAR AND CONCISE LANGUAGE, THAT THE MATERIAL WAS TO BE HAULED BY TRUCK OR TRUCK AND TRAILER ONLY. MOREOVER, WE FIND NOTHING IN THE RECORD BEFORE US THAT WOULD PROVIDE A BASIS FOR CHARGING THE CONTRACTING OFFICE WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE CAPCO ALLOY STEEL COMPANY ON ITEM NO. 11. THE PRICE DISPARITY BETWEEN THE BID OF THE COMPANY AND THE THREE OTHER BIDS RECEIVED FOR THE ITEM MAY NOT BE ACCEPTED AS PROVIDING A BASIS FOR ESTABLISHING NOTICE OF PROBABLE ERROR IN VIEW OF THE WIDE VARIANCE IN BIDS GENERALLY RECEIVED IN SALES OF GOVERNMENT SURPLUS PROPERTY. IN VIEW OF THIS, AND SINCE THERE OTHERWISE APPEARED NOTHING ON THE FACT OF THE BID OF THE CAPCO ALLOY STEEL COMPANY OR IN THE ATTENDANT CIRCUMSTANCES THERETO THAT WOULD INDICATE THE COMPANY'S BID WAS ERRONEOUSLY BASED ON THE AVAILABILITY OF RAILROAD LOADING FACILITIES, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF THE BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, WE FIND NO BASIS FOR GRANTING ANY RELIEF IN THE MATTER.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF FACTS AND RECOMMENDATION OF THE ASSISTANT CONTRACTING OFFICER, AND THE REPORT OF THE DEFENSE LOGISTICS SERVICES CENTER, ARE RETURNED HEREWITH.