B-159013, MAY 12, 1966

B-159013: May 12, 1966

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DEFENSE SUPPLY AGENCY: REFERENCE IS MADE TO A LETTER DATED APRIL 22. THE UNIT ACQUISITION COST OF WHICH WAS STATED TO BE $596.00. THIS BID OF THE COMPANY WAS ACCEPTED AS TO ITEMS 219 THROUGH 226 ON DECEMBER 17. AWARD WAS ALSO MADE TO THE SAME BIDDER ON 10 OTHER ITEMS. COMPLAINED THAT THE BIDS FOR ITEMS 219 THROUGH 226 WERE IN ERROR THROUGH A MISUNDERSTANDING ON THE PART OF HIS AGENT WHO ADVISED THE MANAGER TO PLACE $101.88 BIDS ON THE ITEMS. IT WAS THE OWNER'S INTENTION TO HAVE BIDS OF $18.96. THE OWNER DESCRIBED WHAT THE PRICES SHOULD HAVE BEEN. FURTHER EXPLAINED THAT HIS MANAGER WAS OVERWORKED. FEVERISH AND TIRED AT THE TIME THE BID WAS SUBMITTED. THE ITEMS ARE THE SAME TYPE UNITS DESCRIBED AS FOLLOWS: "TRANSFER UNITS.

B-159013, MAY 12, 1966

TO DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED APRIL 22, 1966, FROM MR. R. F. S. HOMANN, YOUR ASSISTANT COUNSEL, SUBMITTING FOR OUR CONSIDERATION THE REQUEST OF CALIFORNIA TRUCK PARTS AND EQUIPMENT COMPANY, FOR RESCISSION OF CERTAIN ITEMS UNDER SALES CONTRACT DSA 46-6030-169 BECAUSE OF AN ALLEGED MISTAKE IN BID MADE AFTER AWARD OF THE CONTRACT.

THE DEFENSE SURPLUS SALES OFFICE, DEFENSE LOGISTICS SERVICES CENTER, SAN DIEGO, CALIFORNIA, BY INVITATION FOR BIDS NO. 46-6030 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, 178 TRANSFER UNITS, ITEMS 219 THROUGH 226, THE UNIT ACQUISITION COST OF WHICH WAS STATED TO BE $596.00. IN RESPONSE, CALIFORNIA TRUCK PARTS AND EQUIPMENT COMPANY, GARDENA, CALIFORNIA, SUBMITTED TWO BIDS, ONE DATED DECEMBER 13, 1965, SIGNED BY THE COMPANY MANAGER, AND THE SECOND DATED DECEMBER 14, 1965, SIGNED BY AN AUTHORIZED COMPANY AGENT. THE DECEMBER 13, 1965, BID OFFERED TO PURCHASE AMONG OTHERS, 178 TRANSFER UNITS COVERED BY ITEMS 219 THROUGH 226 AT AN ALL OR NONE UNIT PRICE OF $101.88 EACH, WHICH AMOUNTS TO A TOTAL PRICE OF $18,134.64. THIS BID OF THE COMPANY WAS ACCEPTED AS TO ITEMS 219 THROUGH 226 ON DECEMBER 17, 1965. AWARD WAS ALSO MADE TO THE SAME BIDDER ON 10 OTHER ITEMS.

ON DECEMBER 29, 1965, THE OWNER OF THE COMPANY PERSONALLY APPEARED AT THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA, AND COMPLAINED THAT THE BIDS FOR ITEMS 219 THROUGH 226 WERE IN ERROR THROUGH A MISUNDERSTANDING ON THE PART OF HIS AGENT WHO ADVISED THE MANAGER TO PLACE $101.88 BIDS ON THE ITEMS. IT WAS THE OWNER'S INTENTION TO HAVE BIDS OF $18.96, $32.96 TO $52.96 PLACED ON THE TRANSFER UNITS, DEPENDING ON CONDITION. IN A LETTER, RECEIVED JANUARY 3, 1966, ADDRESSED TO THE CONTRACTING OFFICER, THE OWNER DESCRIBED WHAT THE PRICES SHOULD HAVE BEEN, AND FURTHER EXPLAINED THAT HIS MANAGER WAS OVERWORKED, FEVERISH AND TIRED AT THE TIME THE BID WAS SUBMITTED. HE ALSO POINTED OUT THAT SOME OF THE MOST COMPETENT SPARE PARTS FIRMS IN THE COUNTRY BID CONSIDERABLY LESS THAN HIS COMPANY, AND AGAIN REQUESTED RESCISSION.

THE ITEMS ARE THE SAME TYPE UNITS DESCRIBED AS FOLLOWS:

"TRANSFER UNITS. TINKEN-DETROIT AXLE CO., MODEL T138, INCLUDES INPUT AND OUTPUT FLANGES, PARKING BRAKE AND AIR CYLINDER. APPLICABLE TO TRUCK, 5- TON, 6 BY 6, M SERIES.'

EACH ITEM WAS LISTED AS "USED" WITH VARIOUS PARTS MISSING, AND THEIR CONDITION AS FAIR TO POOR. OTHER BIDS ON ITEMS 219 THROUGH 226 RANGED FROM $10.50 EACH TO $79.00 EACH. THE MAJORITY OF THE OTHER UNIT BIDS RECEIVED WERE APPROXIMATELY ONE-HALF THAT OF CALIFORNIA TRUCK PARTS AND THEIR BID OF $101.88 IS APPROXIMATELY 17.25 PERCENT OF THE ACQUISITION COST OF EACH UNIT. THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY CALIFORNIA TRUCK PARTS TO INDICATE THAT THE BID SUBMITTED WAS NOT AS INTENDED, AS THE BID WAS BOTH CLEAR AND UNAMBIGUOUS.

THE BASIC QUESTION FOR CONSIDERATION IS NOT WHETHER CALIFORNIA TRUCK PARTS MADE A MISTAKE IN THEIR BID, BUT WHETHER THE ACCEPTANCE OF THE BID BY THE CONTRACTING OFFICER CONSUMMATED A VALID AND BINDING CONTRACT. ANY ERROR WHICH MAY HAVE BEEN MADE WAS DUE SOLELY TO THE NEGLIGENCE OF THE BIDDER SINCE THE INVITATION WAS CLEAR AS TO THE MATERIALS COVERED BY THE VARIOUS ITEMS.

THE GENERAL RULE IS THAT RELIEF WILL NOT BE GRANTED TO A BIDDER ALLEGING A UNILATERAL MISTAKE AFTER AWARD, UNLESS THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505 (D.C.E.D.PA. 1944). WHERE THERE IS A MATERIAL DIFFERENCE IN THE PRICE QUOTED ON NEW SUPPLIES OR EQUIPMENT TO BE FURNISHED TO THE GOVERNMENT AS COMPARED WITH THE RANGE OF PRICES CONTAINED IN ALL THE OTHER BIDS, THE CONTRACTING OFFICER IS ON CONSTRUCTIVE NOTICE THAT THE BIDDER MAY HAVE MADE AN ERROR AND VERIFICATION MUST BE REQUESTED FROM THE BIDDER BEFORE MAKING AWARD. HOWEVER, IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICE BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR SUCH PROPERTY. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MIGHT WISH TO TAKE. UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; AND ID. 601.

IN THE INSTANT CASE THE ALLEGED ERROR WAS NOT APPARENT ON THE FACE OF THE PROPOSAL, AND THE DIFFERENCE IN THE PRICE BID DOES NOT CONSTITUTE A BASIS TO CHARGE THE CONTRACTING OFFICER WITH CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR. THE ACCEPTANCE OF THE BID WAS IN GOOD FAITH--- NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD OF THE CONTRACT. SUCH AWARD CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND OBLIGATIONS OF THE PARTIES. UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313 (1919); AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75 (1922).

ACCORDINGLY, THERE APPEARS NO LEGAL BASIS FOR RELIEVING CALIFORNIA TRUCK PARTS AND EQUIPMENT COMPANY FROM ITS BID.