B-150670, JAN. 30, 1963

B-150670, JAN. 30, 1963

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 18, 1963, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, DEFENSE SUPPLY AGENCY, CAMERON STATION, REQUESTING OUR DECISION AS TO WHETHER THE BERNS COMPANY, LONG BEACH, CALIFORNIA, MAY BE RELIEVED OF THE AWARD OF ITEMS NOS. 43 AND 44 UNDER CONTRACT NO. DSA-16-S-1206, IN VIEW OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH THIS PART OF THE CONTRACT WAS AWARDED.

IN RESPONSE TO SALES INVITATION NO. 16-S-63-53, ISSUED ON NOVEMBER 23, 1962, BY THE DEFENSE SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, THE BERNS COMPANY SUBMITTED A BID DATED DECEMBER 7, 1962, OFFERING TO PURCHASE ITEM NO. 43, COVERING ONE ELECTRIC FORKLIFT TRUCK FOR $960, AND ITEM NO. 44, COVERING ONE ELECTRIC FORKLIFT, ALSO FOR $960. FOUR OTHER BIDS WERE RECEIVED EACH FOR ITEMS NOS. 43 AND 44 RANGING FROM $380 TO $110 AND FROM $335 TO $175, RESPECTIVELY. THE BID OF THE BERNS COMPANY, BEING THE HIGHEST BID RECEIVED FOR ITEMS NOS. 43 AND 44, AS WELL AS FOR ITEM NO. 48, WAS ACCEPTED AS TO THESE THREE ITEMS ON DECEMBER 13, 1962, BY THE SURPLUS SALES OFFICE IN THE TOTAL AMOUNT OF $2,770, THEREBY CONSUMMATING CONTRACT NO. DSA-16-S-1206. SEVERAL DAYS SUBSEQUENT TO THE AWARD THE BERNS COMPANY ADVISED THE SURPLUS SALES OFFICE THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT THE PRICES QUOTED FOR ITEMS NOS. 43 AND 44 WERE INTENDED FOR ITEMS NOS. 45 AND 46. IN VIEW OF THE ERROR THE COMPANY SEEKS RESCISSION OF ITEMS NOS. 43 AND 44 FROM THE CONTRACT.

IN THE ADMINISTRATIVE REPORT IT IS STATED THAT THE CONTRACTING OFFICER HAD ACKNOWLEDGED THAT SHE ACTUALLY HAD SUSPECTED A MISTAKE IN ITEMS NOS. 43 AND 44 OF THE BID OF THE BERNS COMPANY AT THE TIME OF THE OPENING OF BIDS, NOT PRIMARILY BECAUSE OF THE DISPARITY BETWEEN THE COMPANY'S BID AND THE PRICES FROM THE OTHER BIDDERS RECEIVED FOR THESE ITEMS, BUT RATHER BECAUSE SHE CONSIDERED THE BID OF THE BERNS COMPANY FOR ITEMS NOS. 43 AND 44 HIGH FOR THE ELECTRIC FORKLIFTS COVERED BY THOSE ITEMS, AND THAT SUCH A BID WAS MORE NEARLY IN LINE WITH THE RETURN USUALLY RECEIVED FOR GAS FORKLIFT TRUCKS--- SUCH AS THOSE COVERED BY ITEMS NOS. 45 AND 46--- WHICH HAVE A HIGHER RESALE VALUE. THUS, REGARDLESS OF THE BASIS OF THE CONTRACTING OFFICER'S SUSPICION OF PROBABLE ERROR IN THIS CASE, THE FACT REMAINS THAT SHE DID SUSPECT THAT AN ERROR HAD BEEN MADE. THIS BEING THE CASE, WE BELIEVE SHE OWED THE DUTY TO GRANT THE BERNS COMPANY THE OPPORTUNITY TO VERIFY ITS BID ON THESE ITEMS PRIOR TO THE ACCEPTANCE OF THE BID RATHER THAN MERELY CONFERRING WITH THE MERCHANDISING MEN IN THE DEFENSE SURPLUS SALES OFFICE AS TO THE LIKELIHOOD OF ERROR.

ACCORDINGLY, SINCE THE WORKSHEET SUBMITTED BY THE BERNS COMPANY IN THE MATTER LEAVES LITTLE, IF ANY, DOUBT THAT AN ERROR WAS, IN FACT, MADE IN ITEMS NOS. 43 AND 44 OF THE BID OF THE COMPANY, THESE ITEMS MAY BE CANCELED FROM CONTRACT NO. DSA-16-S-1206 WITHOUT LIABILITY TO THE COMPANY.

THE PAPERS, WITH THE EXCEPTION OF THE FINDINGS OF THE SALES CONTRACTING OFFICER AND THE ADMINISTRATIVE REPORT DATED JANUARY 16, 1963, OF THE DEFENSE LOGISTICS SERVICES CENTER, ARE RETURNED HEREWITH.