B-155577, JAN. 8, 1965

B-155577: Jan 8, 1965

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TO WOLVERINE METAL COMPANY: FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11. DSA 34-S-3420 IN VIEW OF AN ERROR MADE IN YOUR BID UPON WHICH THE CONTRACT WAS AWARDED. IT WAS ACCEPTED ON JUNE 3. IN THAT THE UNIT PRICE INTENDED TO BE BID FOR THIS ITEM WAS $0.054876 INSTEAD OF THE PRICE OF $0.1266 THAT WAS QUOTED. LETTER CONFIRMING THE ERROR WAS LATER SUBMITTED BY YOU EXPLAINING THAT IT WAS INTENDED TO BID A TOTAL PRICE OF $1. THE AMOUNT WAS DIVIDED BY THE NET WEIGHT THEREBY ARRIVING AT THE HIGHER ERRONEOUS $0.1266 UNIT PRICE. A WORKSHEET ALSO WAS FURNISHED BY YOU IN SUPPORT OF THIS EXPLANATION. THE SOLE QUESTION FOR DETERMINATION IN GOVERNMENT SALE CASES OF THIS KIND IS NOT WHETHER AN ERROR WAS.

B-155577, JAN. 8, 1965

TO WOLVERINE METAL COMPANY:

FURTHER REFERENCE IS MADE TO YOUR LETTER DATED NOVEMBER 11, 1964, REQUESTING TO BE RELIEVED FROM YOUR OBLIGATION UNDER DEFENSE SUPPLY AGENCY CONTRACT NO. DSA 34-S-3420 IN VIEW OF AN ERROR MADE IN YOUR BID UPON WHICH THE CONTRACT WAS AWARDED.

IT APPEARS THAT IN RESPONSE TO SALES INVITATION NO. 34-S-64-84, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, DEFENSE LOGISTICS SERVICES CENTER, OKLAHOMA CITY, OKLAHOMA, YOU SUBMITTED A BID DATED MAY 28, 1964, OFFERING TO PURCHASE, AMONG OTHERS, ITEM NO. 4, COVERING AN ESTIMATED 30,000 POUNDS OF VANES, SCRAP, AT $0.1266 A POUND, OR FOR A TOTAL PRICE OF $3,798. YOUR BID BEING THE HIGHEST BID RECEIVED FOR THIS ITEM, IT WAS ACCEPTED ON JUNE 3, 1964. SUBSEQUENT TO THE ACCEPTANCE OF YOUR BID YOU ADVISED THE CONTRACTING OFFICE ON JUNE 3, 1964, BY TELEPHONE THAT AN ERROR HAD BEEN MADE ON ITEM NO. 4, IN THAT THE UNIT PRICE INTENDED TO BE BID FOR THIS ITEM WAS $0.054876 INSTEAD OF THE PRICE OF $0.1266 THAT WAS QUOTED. LETTER CONFIRMING THE ERROR WAS LATER SUBMITTED BY YOU EXPLAINING THAT IT WAS INTENDED TO BID A TOTAL PRICE OF $1,646.81 FOR ITEM NO. ; THAT INSTEAD OF DIVIDING THIS AMOUNT BY THE GROSS WEIGHT TO ARRIVE AT A UNIT PRICE, THE AMOUNT WAS DIVIDED BY THE NET WEIGHT THEREBY ARRIVING AT THE HIGHER ERRONEOUS $0.1266 UNIT PRICE. A WORKSHEET ALSO WAS FURNISHED BY YOU IN SUPPORT OF THIS EXPLANATION. BY REASON OF THE ERROR YOU REQUEST RELIEF FROM YOUR CONTRACTUAL OBLIGATION.

THE SOLE QUESTION FOR DETERMINATION IN GOVERNMENT SALE CASES OF THIS KIND IS NOT WHETHER AN ERROR WAS, IN FACT, MADE IN THE BID UPON WHICH THE CONTRACT WAS AWARDED BUT RATHER WHETHER THE GOVERNMENT CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR IN THE BID PRIOR TO ITS ACCEPTANCE. IN THIS CASE, THE CONTRACTING OFFICER HAD NO ACTUAL NOTICE OF THE ERROR WHICH YOU ALLEGE WAS MADE IN YOUR BID. INSOFAR AS CONSTRUCTIVE NOTICE IS CONCERNED, OUR OFFICE CONSISTENTLY HAS HELD THAT A COMPARISON OF THE BID PRICES GENERALLY USED AS AN EVALUATION FACTOR IN DETERMINING WHETHER A PROBABLE ERROR HAS BEEN MADE IN A BID COVERING A GOVERNMENT PURCHASE IS OF LITTLE, IF ANY, USE FOR SUCH A DETERMINATION IN A GOVERNMENT SALE OF SURPLUS PROPERTY. WE HAVE LONG RECOGNIZED THE FACT THAT A WIDE RANGE OF PRICES ORDINARILY ARE RECEIVED ON GOVERNMENT SALES OF WASTE, SALVAGE, AND SURPLUS PROPERTY, AND, THEREFORE, A MERE DIFFERENCE IN THE PRICES BID BY PROSPECTIVE PURCHASERS MAY NOT BE ACCEPTED AS PLACING A GOVERNMENT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY FROM THE GOVERNMENT AS DOES A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. THUS, THE FACT THAT YOUR BID FOR ITEM NO. 4 MAY HAVE BEEN SUBSTANTIALLY HIGHER THAN ANY OF THE OTHER BIDS RECEIVED FOR THIS ITEM--- YOUR PRICE WAS $0.1266, THE SIX OTHER UNIT PRICES RECEIVED RANGING FROM $0.0566 TO $0.0138--- WOULD NOT OF ITSELF HAVE ALERTED THE CONSTRUCTING OFFICER TO THE PROBABILITY OF AN ERROR IN YOUR BID. UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. THE VALUE OF PARTICULAR EQUIPMENT OR SUPPLIES TO A PROSPECTIVE PURCHASER MIGHT VERY WELL DEPEND UPON THE AMOUNT OF SUCH STOCK ON HAND, THE DEMAND THAT THE PARTICULAR PURCHASER OR DEALER HAS FOR SUCH MATERIAL AT THE TIME OF THE SALE OR UPON SUCH OTHER URGENT UTILIZATION THE PURCHASER MIGHT HAVE FOR IT AT THE SPECIFIC TIME. SUCH CONSIDERATIONS MUST BE GIVEN BY THE GOVERNMENT CONTRACTING OFFICERS IN ALL TYPES OF SALES INVOLVING THE DISPOSITION OF GOVERNMENT SURPLUS PROPERTY. MOREOVER, THE DEFENSE SUPPLY AGENCY REPORTS THAT A REVIEW OF THE BID PRICES RECEIVED ON PREVIOUS SALES OF "GROUP 5" SCRAP SHOWED A VARIATION IN UNIT PRICES BID OF BETWEEN $0.05 AND $0.235 A POUND. THUS, SINCE THERE WAS NO INDICATION ON THE FACE OF YOUR BID OR IN THE ATTENDING CIRCUMSTANCES THAT THE PRICE QUOTED BY YOU WAS NOT AS INTENDED, THERE EXISTS NO JUSTIFICATION FOR CHARGING THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF AN ERROR IN YOUR BID PRIOR TO ITS ACCEPTANCE. UNDER THE CIRCUMSTANCES, WE MUST CONCLUDE THAT THE CONTRACTING OFFICER'S ACCEPTANCE OF YOUR BID CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF TO YOU UNDER CONTRACT NO. DSA 34-S-3420.