B-155258, OCT. 30, 1964

B-155258: Oct 30, 1964

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DEFENSE SUPPLY AGENCY: WE HAVE RECEIVED A LETTER DATED SEPTEMBER 22. ITEMS 30 AND 42 WERE AWARDED TO THE COMPANY AS THE HIGHEST BIDDER. IT WAS ASSERTED THAT THE BID ON ITEM 42 HAD BEEN INTENDED FOR ITEM 43. AS FURTHER EVIDENCE OF THE MISTAKE WE HAVE A COPY OF PAGE SEVEN OF THE INVITATION BEARING NOTATIONS MADE BY THE COMPANY'S REPRESENTATIVES DURING AN INSPECTION TOUR WHICH OCCURRED PRIOR TO BID SUBMISSION. AGAIN ITEM 42 WAS NEGLECTED AND ALL THE NOTATIONS PERTAINED TO ITEM 43. WE ARE INFORMED THAT ITEMS 41 AND 42 OF THE INVITATION WERE VIRTUALLY IDENTICAL IN THAT EACH COVERED ONE AUTOMATIC LATHE MANUFACTURED BY JONES AND LAMSON ADVERTISED AS USED AND IN POOR CONDITION. THE FACE OF THE BID REFERS TO ITEM 42 AS AN AUTOMATIC LATHE AND GIVES NO INDICATION OF THE MISTAKE WHICH IS NOW ALLEGED.

B-155258, OCT. 30, 1964

TO VICE ADMIRAL JOSEPH M. LYLE, DIRECTOR, DEFENSE SUPPLY AGENCY:

WE HAVE RECEIVED A LETTER DATED SEPTEMBER 22, 1964, FROM HEADQUARTERS, DEFENSE SUPPLY AGENCY, YOUR REFERENCE SYMBOL DSAH-G, FORWARDING FOR OUR DISPOSITION THE REQUEST OF JOHN J. NORMOYLE COMPANY FOR RELEASE FROM ITS OBLIGATION TO BUY ITEM NO. 42 UNDER SURPLUS SALES INVITATION NO. 32-S-64- 48 ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, ROCK ISLAND ARSENAL, ROCK ISLAND, ILLINOIS.

BY CONTRACT NO. DSA-32-S-2169 DATED APRIL 3, 1964, ITEMS 30 AND 42 WERE AWARDED TO THE COMPANY AS THE HIGHEST BIDDER. BY LETTER OF APRIL 6, 1964, IT WAS ASSERTED THAT THE BID ON ITEM 42 HAD BEEN INTENDED FOR ITEM 43. THE BIDDER HAS SUBMITTED A PHOTOCOPY OF ITS ORIGINAL WORKSHEET INDICATING AN INTENT TO BID ON ITEMS 9, 12, 14, 30 AND 43 BUT OMITTING ANY REFERENCE TO ITEM 42. AS FURTHER EVIDENCE OF THE MISTAKE WE HAVE A COPY OF PAGE SEVEN OF THE INVITATION BEARING NOTATIONS MADE BY THE COMPANY'S REPRESENTATIVES DURING AN INSPECTION TOUR WHICH OCCURRED PRIOR TO BID SUBMISSION. AGAIN ITEM 42 WAS NEGLECTED AND ALL THE NOTATIONS PERTAINED TO ITEM 43.

WE ARE INFORMED THAT ITEMS 41 AND 42 OF THE INVITATION WERE VIRTUALLY IDENTICAL IN THAT EACH COVERED ONE AUTOMATIC LATHE MANUFACTURED BY JONES AND LAMSON ADVERTISED AS USED AND IN POOR CONDITION. ITEM 43 COVERED A SALLE TYPE LATHE MANUFACTURED BY WARNER AND SWASEY IN SIMILAR CONDITION. THE BIDDER STATES IT HAS PURCHASED A NUMBER OF SURPLUS MACHINES INVARIABLY OF WARNER AND SWASEY MANUFACTURE BUT HAS NEVER BID ON AN AUTOMATIC LATHE. THE FACE OF THE BID REFERS TO ITEM 42 AS AN AUTOMATIC LATHE AND GIVES NO INDICATION OF THE MISTAKE WHICH IS NOW ALLEGED.

THE QUESTION TO BE RESOLVED IS WHETHER OR NOT THE SALES CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, AT THE TIME THE BID OF THE NORMOYLE COMPANY WAS ACCEPTED, THAT THE BID OSTENSIBLY DIRECTED AT ITEM 42 WAS IN ACTUALITY INTENDED TO APPLY TO ITEM 43. THE FOLLOWING INFORMATION WAS THEN AVAILABLE TO THE SALES PERSONNEL:

CHART

ITEM 41 ITEM 42 ITEM 43 HIGHEST BID TENDERED $ 1,168.00 $ 2,389.50 $ 3,158.00

(NORMOYLE) ORIGINAL ACQUISITION COST 7,778.00

7,618.00 10,980.50 CURRENT MARKET APPRAISAL 3,500.00 RANGE OF BIDS

160.00 160.00 110.00

1,168.00 756.00 3,158.00

AS CAN BE NOTICED FROM THE ABOVE DATA, THE NORMOYLE BID ON ITEM 42 WAS SUBSTANTIALLY BELOW BOTH THE ORIGINAL ACQUISITION COST OF THE MACHINE AND ITS CURRENT MARKET APPRAISAL. FURTHERMORE, THE SALES CONTRACTING OFFICER REPORTS THE PRICE SUBMITTED FOR ITEM 42 IS NOT FAR IN EXCESS OF BIDS RECEIVED FOR A LIKE ITEM ON PREVIOUS SALES. ALTHOUGH THE NORMOYLE PRICE WAS APPROXIMATELY THREE TIMES THE AMOUNT OF THE NEXT HIGHEST BID HERE IN QUESTION WERE ON USED EQUIPMENT AND SALVAGE PROPERTY AS DISTINGUISHED FROM BIDS FOR THE PROCUREMENT OF GOODS OR FOR THE PERFORMANCE OF SERVICES. CONSEQUENTLY THERE MIGHT BE EXPECTED A WIDE RANGE IN THE BIDS WHICH WOULD REFLECT DIFFERENCES IN THE VARIOUS BIDDERS' PROPOSED USES FOR THE PARTICULAR PROPERTY OR IN THEIR PROSPECTS OF RESALE. THE MERE DIFFERENCE IN THE PRICES BID FOR SUCH MACHINERY WOULD NOT NECESSARILY PUT THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683 (1957), AFFIRMED AT 253 F.2D 956; 16 COMP. GEN. 596, 597; 17 ID. 601, 603; ID. 976, 977; 28 ID. 550, 551; ID. 261, 262.

THE ERROR HAVING NOT BEEN ALLEGED UNTIL AFTER AWARD, ON THE BASIS OF THE RECORD BEFORE US THE CONCLUSION APPEARS INESCAPABLE THAT THE GOVERNMENT ACCEPTED THE NORMOYLE BID IN GOOD FAITH AND THAT ACCEPTANCE GAVE RISE TO A BINDING AND SUBSISTING CONTRACT BETWEEN THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313 (1919); AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75 (1922). SUCH ACCEPTANCE VESTED IN THE GOVERNMENT A RIGHT WHICH CANNOT BE GIVEN AWAY OR SURRENDERED BY ANY OF ITS OFFICERS. UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389 (1928), AFFIRMED 32 F.2D 141, CERTIORARI DENIED 280 U.S. 574; PACIFIC HARDWARE AND STEEL CO. V. UNITED STATES, 49 CT.CL. 327, 335 (1914); AND BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 CT.CL. 584, 607 (1934), CERTIORARI DENIED 292 U.S. 645.

SINCE THE JOHN J. NORMOYLE COMPANY HAS REFUSED TO REMOVE ITEM 42 AND TO PAY THE BALANCE OF THE PURCHASE PRICE DUE THEREON, THE GOVERNMENT HAS NO ALTERNATIVE BUT TO DECLARE THE TWENTY PERCENT BID DEPOSIT APPORTIONABLE TO THE ITEM, I.E. THE SUM OF $477.90, FORFEITED IN ACCORDANCE WITH ARTICLE SEVEN, ENTITLED "DEFAULT," OF THE GENERAL SALE TERMS AND CONDITIONS WHICH WERE SET FORTH ON STANDARD FORM 114-C, MARCH 1960 EDITION, AS A PART OF THE INVITATION.