B-151268, APR. 19, 1963

B-151268, APR. 19, 1963

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED APRIL 9, 1963, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF OF NAVAL MATERIAL (FIELD OPERATIONS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY GLOBUS STEEL AND METALS TO HAVE BEEN MADE IN ITS BID WHICH WAS ACCEPTED ON MARCH 5, 1963.

IN RESPONSE TO INVITATION TO BID NO. N-1-63 DATED MARCH 4, 1963, ISSUED BY AEROJET-GENERAL CORPORATION, AZUSA, CALIFORNIA, AS AN AGENT FOR THE DEPARTMENT OF THE NAVY, GLOBUS STEEL AND METALS SUBMITTED A BID OFFERING TO PURCHASE LOT 11 AT A PRICE OF $0.09413 PER POUND, WHICH WAS IDENTIFIED AS BEING APPROXIMATELY 32,342 POUNDS OF SPECIAL TOOLING AND RELATED ITEMS, CONSISTING OF MIXED METALS. BIDS ON LOT 11 WERE SOLICITED ON A SCRAP BASIS SUBJECT TO THE EXECUTION OF A SCRAP WARRANTY.

IN HIS REPORT OF MARCH 28, 1963, THE GOVERNMENT SALES CONTRACTING OFFICER STATES THAT AT THE TIME OF THE BID OPENING IT WAS SUSPECTED THAT THE BID RECEIVED FROM GLOBUS STEEL AND METALS ON ITEM 11 WAS AN OBVIOUS ERROR SINCE IT WAS SO FAR IN EXCESS OF THE TRUE MARKET VALUE OF THE SCRAP METAL INVOLVED; AND THAT A REPRESENTATIVE OF AEROJET GENERAL CORPORATION TELEPHONED THE OWNER OF GLOBUS STEEL AND METALS AND REQUESTED THAT HE CONFIRM IN WRITING HIS BID PRICE ON LOT 11. BY TELEGRAM DATED MARCH 5, 1963, GLOBUS STEEL AND METALS ADVISED AEROJET GENERAL CORPORATION AS FOLLOWS: "IN REFERENCE TO CASE NUMBER N-1-63 LOT 11 MY BID IS .09413 STOP LOT 12 MY BID IS .1153 STOP" ON MARCH 5, 1963, THE BID OF GLOBUS STEEL AND METALS WAS ACCEPTED AS TO LOT 11 AND OTHER ITEMS.

BY LETTER DATED MARCH 15, 1963, MR. JOHN JAHODA, OWNER OF GLOBUSSTEEL AND METALS, ADVISED THAT A DECIMAL POINT ERROR WAS MADE BY HIM IN QUOTING ON LOT 11 AND THAT THE PRICE FOR THAT LOT SHOULD HAVE READ $0.009413 INSTEAD OF $0.09413 PER POUND. MR. JAHODA STATED THAT PROBABLY HIS IMPERFECT KNOWLEDGE OF THE ENGLISH LANGUAGE CAUSED HIM TO DISREGARD THE REMARKS OF MR. STEWARD OF AEROJECT-GENERAL CORPORATION WHEN HE ORALLY REQUESTED HIM TO CONFIRM HIS BID PRICE ON LOT 11 AND THAT IT WAS NOT UNTIL HE RECEIVED ANOTHER CALL FROM AEROJECT-GENERAL CORPORATION AND WAS ASKED THE QUESTION OF WHETHER HE REALLY WANTED TO PAY MORE THAN $0.09 FOR A POUND OF SCRAP IRON THAT HE DISCOVERED THE ERROR IN HIS BID.

IT IS REPORTED THAT THE ONLY OTHER BID RECEIVED ON LOT 11 WAS IN THE AMOUNT OF $0.0071 PER POUND. IT IS THUS APPARENT WHY THE REPRESENTATIVE OF AEROJECT-GENERAL CORPORATION FELT CALLED UPON TO REQUEST CONFIRMATION OF THE BID. IN RECOMMENDING THAT RELIEF BE GRANTED IN THIS CASE, THE GOVERNMENT SALES CONTRACTING OFFICER STATED THAT THE NONFERROUS METALS IN LOT 11 CONSIST OF APPROXIMATELY THREE HUNDRED TO FOUR HUNDRED POUNDS OF ALUMINUM AND BRASS, ALL AFFIXED BY BOLTS AND/OR SCREWS TO STEEL PARTS OF THE TOOLING AND THAT THE AVERAGE TRUE MARKET PRICE IN THE LOS ANGELES AREA OF SUCH A MIXTURE OF METALS IS APPROXIMATELY ONE CENT PER POUND.

IT IS THE GENERAL RULE THAT A BIDDER MAY NOT BE RELIEVED FROM THE CONSEQUENCES OF AN INCORRECT BID, ONCE HE HAS BEEN AFFORDED THE OPPORTUNITY OF CONFIRMING HIS ORIGINAL QUOTATION PRIOR TO AWARD. HOWEVER, THE FACTS IN THE INSTANT MATTER APPEAR TO MAKE THIS CASE AN EXCEPTION TO THE GENERAL RULE. THERE IS NO SHOWING THAT THE BIDDER WAS ADVISED THAT THE ONLY OTHER BID ON LOT 11 WAS IN A NOMINAL AMOUNT, AND IT APPEARS THAT THE TELEPHONIC REQUEST FOR CONFIRMATION WAS MISCONSTRUED AS CONSTITUTING MERELY A REQUEST FOR RESTATING THE AMOUNT ORIGINALLY BID RATHER THAN A REQUEST FOR VERIFYING THE CORRECTNESS OF THE BID. IN OTHER WORDS, IT IS NOT CLEAR THAT THE ENTIRE PICTURE WAS BROUGHT TO THE BIDDER'S ATTENTION. IT SEEMS REASONABLE TO ASSUME THAT HAD THIS BEEN DONE THE BIDDER WOULD HAVE DISCOVERED THE ALLEGED ERROR PRIOR TO THE AWARD. IN THE CIRCUMSTANCES, WE CONCLUDE THAT THE ACCEPTANCE OF THE BID AS TO LOT 11, EVEN AFTER VERIFICATION, SHOULD NOT BE REGARDED AS BINDING. ACCORDINGLY, LOT 11 OF THE CONTRACT MAY BE CANCELED.