B-150740, FEB. 15, 1963

B-150740: Feb 15, 1963

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

TO THE SECRETARY OF DEFENSE: REFERENCE IS MADE TO LETTER DATED JANUARY 30. WAS AWARDED MAY BE GRANTED. THE ACQUISITION COST OF WHICH WAS STATED TO BE A TOTAL OF $44. THE BIDDER WAS NOT IN ATTENDANCE DURING THE CONDUCT OF THE SALE BUT HAD DEPOSITED ITS BID CARDS IN THE BOX AT THE SALE SITE PRIOR TO THE BEGINNING OF THE SALE. AWARD WAS MADE TO ZIMM AND SONS AT THE TIME OF THE SALE AND WAS CONFIRMED BY NOTICE OF AWARD DATED SEPTEMBER 19. ZIMM AND SONS REQUESTED THAT IT BE DEFAULTED AS TO ITEM NO. 26 AND STATED THAT IT DID NOT INTEND TO BID ON THIS ITEM AND THAT THE CONTRACTING OFFICER SHOULD HAVE CHECKED THIS BEFORE AWARD SINCE OTHER LOTS OF THE SAME ITEM BROUGHT ONLY ONE THIRD AS MUCH AS ITS BID.

B-150740, FEB. 15, 1963

TO THE SECRETARY OF DEFENSE:

REFERENCE IS MADE TO LETTER DATED JANUARY 30, 1963 (DSAH-G), WITH ENCLOSURES FROM MR. R. F. S. HOMANN, ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY, REQUESTING A DECISION AS TO WHETHER THE RELIEF SOUGHT BY ZIMM AND SONS, OAKLAND, CALIFORNIA, FROM ITS BID ON WHICH CONTRACT NO. DSA 43-S- 264, DATED SEPTEMBER 19, 1962, WAS AWARDED MAY BE GRANTED.

THE DEFENSE SURPLUS SALES OFFICE, LAS VEGAS, NEVADA, BY INVITATION NO. 43 -S-63-15, AS AMENDED, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, ITEM NO. 26 CONSISTING OF 100 SEXTANTS, BUBBLE TYPE, PACKED IN FOUR WOODEN BOXES, THE ACQUISITION COST OF WHICH WAS STATED TO BE A TOTAL OF $44,500. IN RESPONSE, ZIMM AND SONS SUBMITTED A SPOT BID CARD OFFERING TO PURCHASE, AMONG OTHERS, THE ITEM IN QUESTION AT A UNIT PRICE OF $16.11 OR $1,611 FOR THE LOT. THE BIDDER WAS NOT IN ATTENDANCE DURING THE CONDUCT OF THE SALE BUT HAD DEPOSITED ITS BID CARDS IN THE BOX AT THE SALE SITE PRIOR TO THE BEGINNING OF THE SALE. THE BIDDER MADE REFERENCE TO ITS ANNUAL BID BOND ON THE REVERSE SIDE OF ITS BID CARDS IN LIEU OF THE REQUIRED 20 PERCENT BID DEPOSIT. AWARD WAS MADE TO ZIMM AND SONS AT THE TIME OF THE SALE AND WAS CONFIRMED BY NOTICE OF AWARD DATED SEPTEMBER 19, 1962.

MY LETTER DATED SEPTEMBER 26, 1962, ZIMM AND SONS REQUESTED THAT IT BE DEFAULTED AS TO ITEM NO. 26 AND STATED THAT IT DID NOT INTEND TO BID ON THIS ITEM AND THAT THE CONTRACTING OFFICER SHOULD HAVE CHECKED THIS BEFORE AWARD SINCE OTHER LOTS OF THE SAME ITEM BROUGHT ONLY ONE THIRD AS MUCH AS ITS BID. BY LETTER DATED SEPTEMBER 30, 1962, THE PURCHASER RENEWED ITS PRIOR REQUEST. HOWEVER, BY LETTER DATED OCTOBER 2, 1962, THE CONTRACTING OFFICER NOTIFIED THE PURCHASER THAT THE CONTRACT WAS TERMINATED AND THAT 20 PERCENT OF THE PURCHASE PRICE WAS BEING RETAINED AS LIQUIDATED DAMAGES. BY LETTER OF THE SAME DATE, THE PURCHASER REQUESTED A FULL REFUND OF THE PURCHASE PRICE BECAUSE OF ITS MISTAKE AND IN SUPPORT OF SUCH REQUEST IT ENCLOSED A COPY OF THE INVITATION ON THE DESCRIPTIVE PAGES OF WHICH IT HAD ENTERED THE BID PRICES OFFERED FOR VARIOUS ITEMS. THE INVITATION SUBMITTED DID NOT CONTAIN ANY ENTRY OPPOSITE ITEM NO. 26 BUT ON PAGE 26 IT SHOWED AN ENTRY OF $16.11 OPPOSITE ITEM NO. 46 WHICH CONSISTED OF 53 COMPRESSED GAS CYLINDERS. THE PURCHASER'S BID PRICE ON ITEM NO. 46 WAS CONSISTENT WITH THE AWARD PRICE OF $18.06 EACH ON THIS ITEM AND WITH THE AWARD PRICE OF $17.50 EACH ON ANOTHER LOT OF THE SAME ITEM.

IN HIS REPORT AND RECOMMENDATION THE SALES CONTRACTING OFFICER NOTED THE ABSENCE OF ANY NOTATION OR FIGURES ON ITEM NO. 26 IN THE INVITATION FOR BIDS USED BY THE PURCHASER IN SUBMITTING ITS BID ON SEVERAL OF THE VARIOUS ITEMS OFFERED FOR SALE AND HE STATED THAT IT WAS OBVIOUS THAT THE BIDDER, AS EVIDENCED BY ITS BID ON SPOT BID CARDS SUBMITTED ON ITEMS NOS. 44 AND 45, WAS INTERESTED IN BUYING COMPRESSED GAS CYLINDERS. THE SALES CONTRACTING OFFICER EXPRESSED THE VIEW THAT THE FACTS AND EVIDENCE SUBMITTED INDICATED THAT THE PURCHASER IN TRANSFERRING THE UNIT BID PRICE FROM ITS WORK SHEET (INVITATION TO BID) TO ITS SPOT BID CARD INADVERTENTLY ENTERED ITEM NO. 26 INSTEAD OF ITEM NO. 46 AND THAT THE PURCHASER'S REQUEST FOR RELIEF SHOULD BE GRANTED. IN A SUPPLEMENTAL ADMINISTRATIVE REPORT, HOWEVER, THE SALES CONTRACTING OFFICER STATED THAT THE VARIANCE BETWEEN THE HIGH BID AND THE NEXT HIGH BID FOR ITEM NO. 26 DID NOT APPEAR SUFFICIENTLY UNUSUAL SO AS TO HAVE CAUSED HIM TO SUSPECT AN ERROR IN THE BID SUBMITTED BY ZIMM AND SONS; THAT THE AWARD WAS MADE TO THAT COMPANY WITHOUT ANY SUSPICION OF ERROR; AND THAT THE LACK OF ANY PREVIOUS SALES EXPERIENCE ON THIS TYPE OF PROPERTY PRECLUDED THE POSSIBILITY OF PLACING HIM ON NOTICE OF A POSSIBLE MISTAKE IN BID.

WHILE THE UNIT BID OF $16.11 ON ITEM NO. 26 SUBMITTED BY ZIMM AND SONS WAS APPROXIMATELY DOUBLE THAT OF THE NEXT HIGH BID OF $8.10 AND THE SUCCESSFUL BIDS ON ITEMS NOS. 21, 22, 23, 24 AND 25, WHICH ALSO CONSISTED OF SEXTANTS, AS POINTED OUT IN THE ADMINISTRATIVE REPORT OF THE DEFENSE LOGISTIC SERVICES CENTER, SUCH A VARIANCE IN SURPLUS SALES OF USABLE PROPERTY IS NOT AT ALL UNUSUAL AND THE PERCENTAGE OF RETURN WAS ONLY ABOUT 3.6 PERCENT OF THE ACQUISITION COST. NOTHING ON THE FACE OF THE SPOT BID CARD SUBMITTED BY ZIMM AND SONS INDICATED THAT THE PRICE QUOTED THEREIN ON ITEM NO. 26 WAS NOT INTENDED AND 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 THAT COMPANY'S BID, PARTICULARLY AS BIDDERS MAY BE EXPECTED TO PLACE A WIDE RANGE OF VALUES ON SURPLUS PROPERTY COMMENSURATE WITH INDIVIDUAL NEEDS AND OPPORTUNITIES FOR RESALE. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE BID PRICES 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, SUPPLIES, ETC. TO BE FURNISHED TO THE GOVERNMENT. SEE B-150289, JANUARY 11, 1963, AND DECISIONS THEREIN CITED. THE RECORD IN THIS CASE INDICATES THAT THE ACCEPTANCE OF THE BID ON ITEM NO. 26 WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER THE AWARD. CONSEQUENTLY, IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT.

THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 CT.CL. 120, 163. IF ZIMM AND SONS MADE AN ERROR IN BIDDING ON ITEM NO. 26 INSTEAD OF ITEM NO. 46, SUCH ERROR WAS DUE SOLELY TO ITS OWN NEGLIGENCE AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL AND, THEREFORE, DOES NOT ENTITLE THE BIDDER TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; AND SALIGMAN ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.