B-157617, SEP. 23, 1965

B-157617: Sep 23, 1965

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ON ACCOUNT OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH THE CONTRACT WAS AWARDED. ITEM 40 WAS DESCRIBED AS FOLLOWS: "TUBE. - UNUSED)" NINETEEN OTHER BIDS WERE RECEIVED FOR ITEM 40 WHICH RANGED FROM THE SECOND HIGH BID OF $10.66 PER UNIT TO THE LOWEST BID AT $0.64 PER UNIT. THE HIGH BID OF THE CHARTER TIRE COMPANY ON ITEM 40 WAS ACCEPTED IN THE TOTAL AMOUNT OF $1. THE COMPANY SUBMITTED ITS WORKSHEETS WHICH INDICATED THAT ITS BID WAS PROPERLY INTENDED TO BE FOR ITEM 40. THE SALES CONTRACTING OFFICER HAS STATED THAT AN ERROR WAS SUSPECTED AT THE TIME THE BID WAS SUBMITTED AND THAT VERIFICATION OF THE COMPANY'S BID SHOULD HAVE BEEN REQUESTED PRIOR TO AWARD. THE COMPANY'S TOTAL BID WAS THREE TIMES THE PUBLISHED ACQUISITION COST OF ITEM 40.

B-157617, SEP. 23, 1965

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

BY LETTER DATED AUGUST 31, 1965, WITH ENCLOSURES, YOUR ASSISTANT COUNSEL REQUESTED OUR DECISION AS TO WHETHER THE CHARTER TIRE COMPANY MAY BE RELIEVED OF ITS OBLIGATIONS UNDER CONTRACT NO. DSA-46-S-7193 DATED JUNE 25, 1965, ON ACCOUNT OF AN ERROR ALLEGED BY THE COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH THE CONTRACT WAS AWARDED.

IN RESPONSE TO SALES INVITATION FOR BIDS NO. 46-S-65-68, ISSUED ON MAY 27, 1965, BY THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA, THE COMPANY SUBMITTED A BID DATED JUNE 18, 1965, OFFERING TO PURCHASE ITEM 40 FOR $46.66 EACH, OR $1,633.10 FOR THE LOT OF 35 UNITS. ITEM 40 WAS DESCRIBED AS FOLLOWS:

"TUBE, INNER, PNEUMATIC. FIRESTONE. SPEC. MIL-T-5014C; TYPE III, SIZE 17.00 BY 16 "SKY CHAMPION LEAKPROOF.' VALVE NO. TR91. YEAR 1959. APPLICABLE TO MAIN WHEEL OF C47/R4D AIRCRAFT. (LOC: INSIDE--- IN FACTORY CARTONS--- UNUSED)"

NINETEEN OTHER BIDS WERE RECEIVED FOR ITEM 40 WHICH RANGED FROM THE SECOND HIGH BID OF $10.66 PER UNIT TO THE LOWEST BID AT $0.64 PER UNIT. THE HIGH BID OF THE CHARTER TIRE COMPANY ON ITEM 40 WAS ACCEPTED IN THE TOTAL AMOUNT OF $1,633.10. THREE DAYS AFTER AWARD, THE COMPANY ADVISED THE DISPOSAL AGENCY THAT IT HAD MADE AN ERROR IN BIDDING ON ITEM 40 IN THAT IT BELIEVED THAT THE ITEM CONSISTED OF TIRES RATHER THAN TUBES. THE COMPANY SUBMITTED ITS WORKSHEETS WHICH INDICATED THAT ITS BID WAS PROPERLY INTENDED TO BE FOR ITEM 40. THE COMPANY SEEKS RESCISSION OF THE CONTRACT ON THE BASIS OF THIS ALLEGATION OF ERROR.

THE SALES CONTRACTING OFFICER HAS STATED THAT AN ERROR WAS SUSPECTED AT THE TIME THE BID WAS SUBMITTED AND THAT VERIFICATION OF THE COMPANY'S BID SHOULD HAVE BEEN REQUESTED PRIOR TO AWARD. IN THIS REGARD, THE COMPANY'S TOTAL BID WAS THREE TIMES THE PUBLISHED ACQUISITION COST OF ITEM 40, AND WAS FOUR TIMES THE ESTIMATED MARKET APPRAISAL OF THE ITEM. WHILE THE DISPARITY BETWEEN BIDS RECEIVED UNDER SALES INVITATIONS ORDINARILY IS NOT INDICATIVE OF PROBABILITY OF ERROR, THE DISPARITY BETWEEN THE COMPANY'S BID AND THE NEXT HIGH BID IN RELATION TO THE LESSER DEGREE OF DISPARITY BETWEEN THE REMAINING 18 BIDS MAY BE VIEWED AS AN ADDITIONAL FACTOR WHICH SHOULD HAVE PROMPTED BID VERIFICATION.

ON THIS RECORD AND CONSIDERING THE FACT THAT THE CONTRACTING OFFICER SUSPECTED THAT AN ERROR HAD BEEN MADE WE BELIEVE THAT HE ERRED IN NOT AFFORDING THE COMPANY AN OPPORTUNITY TO VERIFY ITS BID PRIOR TO ACCEPTANCE. B-150670, JANUARY 30, 1963; B-150966, MARCH 25, 1963.

ACCORDINGLY, AND SINCE LITTLE IF ANY DOUBT EXISTS THAT AN ERROR WAS, IN FACT, MADE AS TO ITEM 40, CONTRACT NO. DSA-46-S-7193 MAY BE CANCELED WITHOUT LIABILITY TO THE CHARTER TIRE COMPANY.