B-158715, MAR. 22, 1966

B-158715: Mar 22, 1966

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THE STARTERS WERE DESCRIBED IN ITEM 224 OF SALE NO. 23-6058. ALTHOUGH THE ORIGINAL COST WAS $19. THE CURRENT MARKET APPRAISAL WAS $7.50. THREE BIDS WERE RECEIVED. THE CONTRACTING OFFICER STATES THAT HE SHOULD HAVE BEEN ON NOTICE OF A POSSIBLE MISTAKE IN KAL NELSON'S BID IN VIEW OF THE MARKET APPRAISAL AND THE TWO OTHER BIDS RECEIVED. YOU ADVISE THAT YOUR OFFICE WOULD HAVE NO OBJECTION TO THAT ACTION. SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR. HE SHOULD HAVE REQUESTED VERIFICATION FROM NELSON.

B-158715, MAR. 22, 1966

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

BY LETTER DATED MARCH 11, 1966, THE ASSISTANT COUNSEL FORWARDED THE PAPERS INVOLVED IN CONTRACT DSA 23-6058-042, ISSUED TO KAL NELSON AVIATION, INC., FOR THE PURCHASE OF 18 SURPLUS AIR TURBINE ENGINE STARTERS.

THE STARTERS WERE DESCRIBED IN ITEM 224 OF SALE NO. 23-6058, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, JACKSONVILLE, FLORIDA, AS BEING IN FAIR CONDITION. ALTHOUGH THE ORIGINAL COST WAS $19,494, THE CURRENT MARKET APPRAISAL WAS $7.50. THREE BIDS WERE RECEIVED, TWO OF THEM AT $1.85 AND $1.51 AND KAL NELSON AVIATION AT $80. AFTER RECEIPT OF THE AWARD, MR. KAL NELSON ADVISED THAT HE HAD INTENDED TO BID $8 BUT THE DECIMAL POINT HAD BEEN MISPLACED BY HIS WIFE IN PREPARING THE BID, AND HE REQUESTED A CORRECTION IN THE BID.

THE CONTRACTING OFFICER STATES THAT HE SHOULD HAVE BEEN ON NOTICE OF A POSSIBLE MISTAKE IN KAL NELSON'S BID IN VIEW OF THE MARKET APPRAISAL AND THE TWO OTHER BIDS RECEIVED. HE RECOMMENDS THAT THE BID BE CORRECTED AND THE CONTRACT PRICE ADJUSTED ACCORDINGLY, AND YOU ADVISE THAT YOUR OFFICE WOULD HAVE NO OBJECTION TO THAT ACTION.

WE AGREE THAT THE GREAT DISPARITY BETWEEN THE COMPANY'S HIGH BID AND THE MARKET APPRAISAL, AS WELL AS THE SUBSTANTIAL DIFFERENCE BETWEEN THE HIGH BID OF NELSON AVIATION AND THE TWO OTHER BIDS, SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR, AND HE SHOULD HAVE REQUESTED VERIFICATION FROM NELSON. THEREFORE, THE BID SHOULD BE CORRECTED TO REFLECT THE ..END :