B-149626, AUG. 31, 1962

B-149626: Aug 31, 1962

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO YOUR ASSISTANT COUNSEL'S LETTER OF AUGUST 3. THE ORIGINAL ACQUISITION COST OF WHICH WAS STATED TO BE $29. THE BID OF AMCAN AIRPARTS WAS ACCEPTED AS TO ITEM 58 AND OTHER ITEMS ON JUNE 28. IT IS REPORTED THAT ON JULY 2. THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY AMCAN AIRPARTS TO INDICATE THAT THE PRICE QUOTED FOR ITEM 58 WAS NOT AS INTENDED. ALTHOUGH THE BID SUBMITTED BY AMCAN AIRPARTS WAS CONSIDERABLY HIGHER THAN THE NEXT HIGHEST BID RECEIVED. IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE.

B-149626, AUG. 31, 1962

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO YOUR ASSISTANT COUNSEL'S LETTER OF AUGUST 3, 1962, REQUESTING A DECISION AS TO WHETHER THE REQUEST OF AMCAN AIRPARTS FOR RELIEF UNDER SALES CONTRACT NO. AF 02/617/A-850 MAY BE GRANTED.

THE DEFENSE SURPLUS SALES OFFICE, DAVIS-MONTHAN AIR FORCE BASE, TUCSON, ARIZONA, BY INVITATION NO. 02-617-S-62-41 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, ONE LOT OF AUTO PILOT CONTROLS, ITEM 58, THE ORIGINAL ACQUISITION COST OF WHICH WAS STATED TO BE $29,950. IN RESPONSE AMCAN AIRPARTS SUBMITTED A BID DATED JUNE 21, 1962, OFFERING TO PURCHASE, AMONG OTHERS, THE AUTO PILOT CONTROLS COVERED BY ITEM 58 AT A LOT PRICE OF $1,444.88. THE BID OF AMCAN AIRPARTS WAS ACCEPTED AS TO ITEM 58 AND OTHER ITEMS ON JUNE 28, 1962.

IT IS REPORTED THAT ON JULY 2, 1962, A REPRESENTATIVE OF AMCAN AIRPARTS ADVISED THE CONTRACTING OFFICER THAT A MISTAKE HAD BEEN MADE BY THE COMPANY IN ITS BID ON ITEM 58.

IN A CONFIRMING LETTER DATED JULY 5, 1962, THE COMPANY STATED THAT IT HAD INTENDED TO QUOTE A PRICE OF $444.88 INSTEAD OF $1,444.88 FOR THE ITEM AND IT ALLEGED THAT ITS SECRETARY, IN FILLING OUT THE BID SHEET, HAD ERRONEOUSLY TAKEN A PART OF THE DOLLAR SIGN TO BE AN ADDITIONAL NUMBER AND FILLED IN THE BID AS $1,444.88 INSTEAD OF THE INTENDED SUM OF $444.88. THE COMPANY REQUESTED THAT THE ITEM BE CANCELED OR, IN THE ALTERNATIVE, THAT THE PRICE OF THE ITEM BE CORRECTED TO READ $444.88. IN SUPPORT OF ITS ALLEGATION OF ERROR, THE COMPANY SUBMITTED ITS WORKSHEET, WHICH APPEARS TO BE A COPY OF THE DESCRIPTION SHEET COVERING ITEM 58 AND CERTAIN OTHER ITEMS. THE WORKSHEET INDICATES A BID OF $444.88 FOR ITEM 58.

THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY AMCAN AIRPARTS TO INDICATE THAT THE PRICE QUOTED FOR ITEM 58 WAS NOT AS INTENDED. THE ABSTRACT OF BIDS SHOWS THAT THE FOUR OTHER BIDS ON THIS ITEM RANGED FROM $333.33 TO $15.65. ALTHOUGH THE BID SUBMITTED BY AMCAN AIRPARTS WAS CONSIDERABLY HIGHER THAN THE NEXT HIGHEST BID RECEIVED, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE. SEE UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; AND ID. 601. IN THE SABIN CASE, SUPRA, THE PRICE DISPARITY ON THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. THE COURT, AT PAGE 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING, AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID OF AMCAN AIRPARTS WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BIDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. IT IS THEREFORE CONCLUDED THAT THE COMPANY IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT, ARE RETURNED.