B-149027, JUN. 25, 1962

B-149027, JUN. 25, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED MAY 25, 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 NATIONAL METALS COMPANY, PHOENIX, ARIZONA, UNDER CONTRACT NO. AF 02 (617/S-675.

IN RESPONSE TO INVITATION NO. 02-617-S-62-24, ISSUED ON JANUARY 5, 1962, BY THE CONSOLIDATED SURPLUS SALES OFFICE, DAVIS-MONTHAN AIR FORCE BASE, THE NATIONAL METALS COMPANY SUBMITTED A BID DATED FEBRUARY 13, 1962, OFFERING TO PURCHASE ITEM NO. 1, COVERING ONE LOT OF APPROXIMATELY 1,017 GROSS TONS OF IRON AND STEEL SCRAP FOR A TOTAL PRICE OF $24,384.76. FOUR OTHER BIDS WERE RECEIVED FOR THE ITEM RANGING IN TOTAL AMOUNTS FROM $22,467 TO $12,608.08. THE BID OF THE NATIONAL METALS COMPANY, BEING THE HIGHEST BID RECEIVED, WAS ACCEPTED BY THE SURPLUS SALES OFFICE ON FEBRUARY 14, 1962, THEREBY CONSUMMATING CONTRACT NO. AF 02 (617/S-675. SUBSEQUENT TO THE AWARD IT WAS DISCOVERED THAT THE LOT OF IRON AND STEEL SCRAP CONTAINED ONLY 397 GROSS TONS INSTEAD OF THE APPROXIMATE 1,017 GROSS TONS SET FORTH IN THE INVITATION. BY REASON OF THE WEIGHT DISCREPANCY THE NATIONAL METALS COMPANY SEEKS REVOCATION OF THE CONTRACT.

THE SCRAP COVERED BY ITEM NO. 1 CONSISTED OF DEMILITARIZED PRACTICE BOMBS LOCATED AT FOUR SEPARATE BOMBING RANGES. THE BOMBS WERE NOT STORED IN AN ORDERLY FASHION ON ANY OF THE RANGES BUT RATHER WERE SCATTERED ON THE GROUND IN NUMEROUS LOW-PILED SCATTERED PILES. THE CONTRACTING OFFICER REPORTS THAT WHAT APPEARS TO HAVE CAUSED THE GROSS WEIGHT DISCREPANCY WAS THAT THE EMPLOYEE WHO HAD SET UP AND MAINTAINED THE RECORDS OF THE DEMILITARIZED BOMBS HAD KEPT A RUNNING TOTAL OF THE NUMBER OF BOMBS AS THEY WERE REPORTED IN BUT THAT WHEN A NEW EMPLOYEE, WHO WAS NOT INFORMED OF THIS, SUBSEQUENTLY STARTED TO KEEP THESE RECORDS HE APPARENTLY HAD TOTALED THE NUMBER OF BOMBS AT EACH SITE BY ADDING THE RUNNING TOTAL FIGURES. THE CONTRACTING OFFICER FURTHER REPORTS THAT THE MAINTENANCE OF THESE RECORDS WAS TOO INFORMAL WHICH RESULTED IN INADEQUATE RECORDS. STATES THAT THEY WERE KEPT MERELY ON A RULED SCRATCH PAD IN PENCIL, THAT ERASURES HAD BEEN MADE THEREON, THAT NO TALLY SHEETS HAD BEEN TURNED IN FROM ANY OF THE FOUR RANGE SITES, AND THAT THE REPORTING WAS DONE EITHER BY TELEPHONE OR BY SOMEONE STOPPING BY THE OFFICE AND MAKING AN ORAL REPORT. THUS, SINCE IT APPEARS THAT THE GROSS MISDESCRIPTION OF THE WEIGHT INVOLVED RESULTED FROM TOTALING PREVIOUSLY COMPUTED RUNNING TOTAL AMOUNTS WHICH MISDESCRIPTION, IN TURN, APPEARS TO HAVE BEEN LARGELY ATTRIBUTABLE TO THE INADEQUATE PROCEDURE FOLLOWED IN MAINTAINING SUCH RECORDS, WE DO NOT BELIEVE IT PROPERLY MAY BE HELD THAT THE DESCRIPTIVE INFORMATION PERTAINING TO THE APPROXIMATE WEIGHT WAS BASED ON THE "BEST AVAILABLE INFORMATION," AS STATED IN PARAGRAPH 2 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE INVITATION.

IN VIEW OF THE FOREGOING, AND SINCE IT ALSO WOULD BE UNCONSCIONABLE FOR THE NATIONAL METALS COMPANY TO HAVE TO PAY, AS REPORTED, APPROXIMATELY $14,000 MORE THAN THE MAXIMUM VALUE OF THE PROPERTY, CONTRACT AF 02 (617/S -675 MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE STATEMENT OF THE CONTRACTING OFFICER, HIS REPORT OF FIELD TRIP DATED MARCH 23, 1962, AND THE ADMINISTRATIVE REPORT OF THE DEFENSE LOGISTICS SERVICES CENTER, ..END :