B-157656, SEP. 23, 1965

B-157656: Sep 23, 1965

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO LETTER DSAH-G OF SEPTEMBER 13. 500 ON ITEM 85 WAS INTENDED FOR ITEM 86. A LINE IS DRAWN THROUGH THE DESCRIPTION OF ITEM 85. WHEREAS SURROUNDING THE DESCRIPTION OF ITEM 86 THERE ARE HANDWRITTEN NOTES. " PRACTICALLY WAS THE AMOUNT OF THE GOVERNMENT'S ACQUISITION COST WHICH IS LISTED AT $1. IT IS INDICATED THAT THE APPRAISED MARKET VALUE OF THE ARTICLE WAS $400 AND THAT PREVIOUSLY PRACTICALLY IDENTICAL MACHINES HAD SOLD FOR $275 AND $300. IT IS POINTED OUT THAT THE BID IS IN LINE WITH THE OTHER BIDS RECEIVED ON ITEM 86 WHEREAS IT IS FIVE TIMES MORE THAN THE NEXT LOW BID OF $300 RECEIVED FOR ITEM 85. IT IS RECOMMENDED THAT THE CONTRACT BE CANCELED ON THE BASIS THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED ERROR IN THE BID.

B-157656, SEP. 23, 1965

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

REFERENCE IS MADE TO LETTER DSAH-G OF SEPTEMBER 13, 1965, FROM THE OFFICE OF COUNSEL, REQUESTING A DECISION WHETHER SALES CONTRACT 46 6003-210 WITH CARL'S MACHINERY CO., INC., MAY BE CANCELED AS A RESULT OF AN ERROR IN BID ALLEGED AFTER AWARD.

THE CONTRACTOR HAS ALLEGED THAT ITS BID IN THE AMOUNT OF $1,500 ON ITEM 85 WAS INTENDED FOR ITEM 86. IN SUPPORT OF ITS CONTENTION IT HAS FURNISHED THE ITEM DESCRIPTION PAGES OF THE SALES CATALOG WHICH IT USED AS WORKSHEETS. ON THE PAGE CONTAINING THE DESCRIPTION OF ITEMS 85 AND 86, A LINE IS DRAWN THROUGH THE DESCRIPTION OF ITEM 85, AS WELL AS OTHER ITEMS THE CONTRACTOR DID NOT BID UPON, WHEREAS SURROUNDING THE DESCRIPTION OF ITEM 86 THERE ARE HANDWRITTEN NOTES, APPARENTLY RELATING TO THE ARTICLE, AND THE AMOUNT $1,499.98 WRITTEN OUT AND CIRCLED.

THE SEPTEMBER 13 LETTER POINTS OUT THAT THE $1,500 BID ON ITEM 85, DESCRIBED IN THE SALES CATALOG AS "USED," PRACTICALLY WAS THE AMOUNT OF THE GOVERNMENT'S ACQUISITION COST WHICH IS LISTED AT $1,591 IN THE CATALOG. MOREOVER, IT IS INDICATED THAT THE APPRAISED MARKET VALUE OF THE ARTICLE WAS $400 AND THAT PREVIOUSLY PRACTICALLY IDENTICAL MACHINES HAD SOLD FOR $275 AND $300. IN ADDITION, IT IS POINTED OUT THAT THE BID IS IN LINE WITH THE OTHER BIDS RECEIVED ON ITEM 86 WHEREAS IT IS FIVE TIMES MORE THAN THE NEXT LOW BID OF $300 RECEIVED FOR ITEM 85. IN VIEW OF THESE FACTORS, IT IS RECOMMENDED THAT THE CONTRACT BE CANCELED ON THE BASIS THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED ERROR IN THE BID. THE CONTRACTING OFFICER AND THE SALES FACILITY, THE DEFENSE LOGISTICS SERVICES CENTER, CONCUR IN THE RECOMMENDATION.

THE BID ON ITEM 85 IS MORE THAN 94 PERCENT OF THE ACQUISITION COST OF THE ARTICLE. OUT OFFICE HAS HELD THAT A BID MORE THAN 88 PERCENT OF THE ACQUISITION COST WAS SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. B-146136, JULY 14, 1961.

IN THE CIRCUMSTANCES, IT APPEARS THAT A BONA FIDE MISTAKE WAS MADE AS ALLEGED AND THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A POSSIBLE ERROR WHICH SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD. ACCORDINGLY, THE CONTRACT WITH CARL'S MACHINERY CO., INC., FOR ITEM 85 SHOULD BE CANCELED.