B-149434, AUG. 17, 1962

B-149434, AUG. 17, 1962

TO MR. DAVID J. LEVY:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JULY 9, 1962, TO THE CONTRACTING OFFICER, GENERAL SERVICES ADMINISTRATION, SAN FRANCISCO, CALIFORNIA, A COPY OF WHICH WAS FORWARDED TO OUR OFFICE, PROTESTING ON BEHALF OF A GROUP OF PURCHASERS THE FAILURE TO ACCEPT THEIR BID OF $98,960 FOR A CERTAIN PARCEL OF LAND LOCATED AT STONEMAN MILITARY RESERVATION, PITTSBURG, CALIFORNIA.

THE INVOLVED LAND, DESCRIBED AS PARCEL 3, AND AS CONTAINING 123.7 ACRES, IS PART OF A TRACT CONTAINING APPROXIMATELY 813.51 ACRES REPORTED AS SURPLUS ON JUNE 2, 1959, BY THE DEPARTMENT OF THE ARMY. THE FACTS AS REPORTED BY GENERAL SERVICES ADMINISTRATION SHOW THAT PARCEL 3 WAS FIRST OFFERED FOR SALE WITH BID OPENING DATE ON FEBRUARY 17, 1960. FOUR BIDS, THE HIGHEST OF WHICH WAS $25,000, WERE RECEIVED AND REJECTED. PARCEL 3 WAS AGAIN OFFERED FOR SALE AT A PUBLIC AUCTION SALE HELD ON JUNE 8, 1960. YOU WERE THE HIGH BIDDER AT THIS SALE WITH A BID OF $98,960. AT THIS TIME, GSA HAD AN APPRAISED VALUE ON PARCEL 3 OF $237,600 BASED ON AN APPRAISAL BY FRED D. PRAKEL, A CONTRACT APPRAISER. BY LETTER DATED JUNE 20, 1960, THE ROSS-DOVE COMPANY, THE AUCTIONEERS, ADVISED YOU THAT GSA BELIEVED THE LAND SHOULD BRING $1,150 PER ACRE AND REQUESTED ADVICE AS TO WHETHER YOU WOULD BE WILLING TO PAY THAT PRICE FOR PARCEL 3. IN YOUR REPLY YOU REFUSED TO PAY THE PRICE SUGGESTED BY THE AUCTIONEERS OR ANY AMOUNT IN EXCESS OF YOUR BID PRICE OF $98,960. YOUR BID WAS REJECTED BY LETTER DATED AUGUST 5, 1960.

PARCEL 3 WAS AGAIN OFFERED FOR SALE ALONG WITH OTHER PARCELS CONTAINING APPROXIMATELY 696 ACRES, BY INVITATION NO. GSA-PBS-9-LB-34 WITH BID OPENING DATE 3 P.M., PACIFIC DAYLIGHT SAVING TIME, JUNE 14, 1961. IN THE MEANTIME, PARCEL 3 HAD BEEN REAPPRAISED AS OF JANUARY 26, 1961, AT $88,500 BY CONTRACT APPRAISER DAVID CONGER. THE ABSTRACT OF BIDS SHOWS THAT AT THIS SALE YOU AND DR. S. L. BERNSTEIN BID JOINTLY ON SEVERAL OTHER PARCELS OF LAND AND WERE AWARDED SIX PARCELS BUT THAT YOU DID NOT SUBMIT A BID FOR PARCEL 3. THE HIGH BID FOR PARCEL 3 WAS SUBMITTED BY MR. B. SELLICK, SAN FRANCISCO, CALIFORNIA, IN THE AMOUNT OF $13,031 BUT THE ABSTRACT OF BIDS SHOWS THAT THE BIDDER FAILED TO SUBMIT THE REQUIRED BID DEPOSIT WITH HIS BID. SUCH FAILURE PLUS THE FACT THAT THE BID WAS FAR BELOW THE APPRAISED VALUE OF PARCEL 3 RESULTED IN THE REJECTION OF THIS BID.

ON APRIL 2, 1962, PARCEL 3 WAS APPRAISED AT $74,200 BY CONTRACT APPRAISER DAVID CONGER, AND BY INVITATION NO. GSA-UDS-9-LB-8 BIDS WERE INVITED FOR THE PURCHASE OF THIS PARCEL ALONG WITH OTHER SURPLUS PROPERTY AT CAMP STONEMAN WITH BID OPENING MAY 3, 1962. THE ABSTRACT OF THE BIDS SHOWS THAT THREE BIDS WERE RECEIVED FOR PARCEL 3 AND THAT AWARD WAS MADE TO THE HIGHEST BIDDER R. SCHUMACHER, OAKLAND, CALIFORNIA, WHOSE BID OF $93,111 WAS IN EXCESS OF THE LATEST APPRAISED VALUE FOR THAT PARCEL.

YOUR PROTEST OF THE AWARD MADE TO MR. SCHUMACHER IS ON THE GROUND THAT PARCEL 3 IS WORTH MORE THAN THE AMOUNT OF THE ACCEPTED BID. YOU CALL ATTENTION TO THE FACT THAT AT THE PUBLIC AUCTION SALE HELD ON JUNE 8, 1960, YOU SUBMITTED A BID FOR PARCEL 3 IN THE AMOUNT OF $98,960 ON BEHALF A GROUP OF PURCHASERS WHICH BID WAS REJECTED BY GSA BECAUSE AT THAT TIME THERE WAS AN APPRAISED VALUE OF $237,600 ON THE PROPERTY. YOU STATE THAT IT WOULD SEEM THAT IF GSA WAS INTERESTED IN GETTING THE HIGHEST RETURN ON THE PROPERTY IT WOULD HAVE AT LEAST COMMUNICATED WITH INTERESTED PERSONS WHO PREVIOUSLY HAD SUBMITTED BIDS IN EXCESS OF THE AMOUNT FOR WHICH THE PARCEL WAS EVENTUALLY SOLD. ALSO, YOU STATE THAT GSA DID NOT EVEN ADVISE YOU THAT PARCEL 3 WOULD BE OFFERED FOR SALE AGAIN AFTER REJECTION OF ALL BIDS SUBMITTED AT THE PUBLIC AUCTION ON JUNE 8, 1960, OR THAT THE PARCEL HAD BEEN REAPPRAISED FOR A LESSER AMOUNT THAN THE APPRAISAL PREVAILING ON JUNE 8, 1960.

CONCERNING YOUR CONTENTIONS WITH RESPECT TO THE ABSENCE OF NOTICE THAT PARCEL 3 WOULD AGAIN BE OFFERED FOR SALE FOLLOWING THE PUBLIC AUCTION ON JUNE 8, 1960, THIS PARCEL KNOWN AS THE RIFLE RANGE AREA WAS SPECIFICALLY INCLUDED IN BID INVITATION NO. GSA-PBS-9-LB-34 AND GSA HAS REPORTED THAT YOU AND DR. S. L. BERNSTEIN JOINTLY SUBMITTED BIDS ON OTHER PARCELS OFFERED AT THIS SALE BUT THAT YOU FAILED TO SUBMIT A BID ON PARCEL 3. TO THE SEALED BID SALE HELD ON MAY 3, 1962, GSA HAS REPORTED THAT NOTICE OF SALE OF THE PROPERTY OFFERED AT THAT SALE APPEARED IN THE SAN FRANCISCO EXAMINER, SAN FRANCISCO CHRONICLE, SAN FRANCISCO NEWS CALL BULLETIN, OAKLAND TRIBUNE, SACRAMENTO BEE, LOS ANGELES TIMES, PHOENIX REPUBLIC GAZETTE, SAN DIEGO TRIBUNE, AND WALL STREET JOURNAL. IT IS FURTHER REPORTED THAT COPIES OF THE BID INVITATION WERE SENT TO ALL WHO WERE REGISTERED ON THE GSA MAILING LIST FOR THIS PARTICULAR TYPE PROPERTY AND THAT A COPY OF THE BID INVITATION WAS MAILED TO YOU. IT WOULD THUS APPEAR THAT EVERY EFFORT WAS MADE TO OBTAIN THE WIDEST PUBLICITY FOR THIS SALE AND WE FIND NOT BASIS FOR YOUR COMPLAINT IN THIS RESPECT. NEITHER DO WE FIND ANY BASIS FOR YOUR COMPLAINT CONCERNING LACK OF NOTICE THAT THE PARCEL HAD BEEN REAPPRAISED. THERE IS NOTHING IN THE RECORD WHICH MADE IT OBLIGATORY ON THE CONTRACTING OFFICER UPON READVERTISEMENT OF THE PARCEL, TO INFORM PROSPECTIVE BIDDERS OF THE CHANGES IN ITS APPRAISED VALUE.

WHILE IT IS TRUE THAT YOUR BID OF $98,960 EXCEEDED THE BID OF $93,111 SUBMITTED BY THE SUCCESSFUL BIDDER, AT THE TIME YOUR BID WAS SUBMITTED PARCEL 3 WAS APPRAISED BY $237,600 WHEREAS AT THE TIME THE SUCCESSFUL BID WAS SUBMITTED THE PARCEL WAS APPRAISED AT ONLY $74,200. THEORETICALLY, THE FAIR MARKET VALUE OF PROPERTY IS WHAT A WILLING SELLER WOULD TAKE AND A WILLING BUYER WOULD OFFER, WHICH THEORY IF APPLIED TO THIS CASE WOULD BE $93,111 AT THE TIME OF SALE. WHILE IT MAY BE TRUE THAT THIS PARCEL IS WORTH MORE THAN THE PURCHASE PRICE OF $93,111, THERE IS NOTHING IN THE RECORD TO INDICATE BAD FAITH ON THE PART OF THE CONTRACTING OFFICER OR THE CONTRACT APPRAISERS. IN THE CIRCUMSTANCES, AND SINCE THE PURCHASE PRICE EXCEEDS THE APPRAISED VALUE CURRENT AT THE TIME OF THE SALE OF PARCEL 3 TO MR. SCHUMACHER WE FIND NO PROPER BASIS FOR OBJECTING THERETO OR DIRECTING CANCELLATION OF THE AWARD AND REOPENING THE SALE AS REQUESTED BY YOU. THEREFORE YOUR PROTEST IS DENIED.