B-159404, AUG. 4, 1966

B-159404: Aug 4, 1966

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TO CALIFORNIA TRUCK PARTS AND EQUIPMENT CO.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 7. THE SUBJECT CONTRACT WAS AWARDED ON JUNE 6. WHICH WAS COMPRISED OF 3. APPEARS THAT THIS WAS THE ONLY ITEM. YOUR BID WAS IN THE AMOUNT OF $2.16 EACH FOR A TOTAL BID OF $7. THE CONTRACT WAS AWARDED IN THIS AMOUNT. YOU ALLEGE THAT A MISTAKE WAS MADE IN PREPARING YOUR BID AND THAT YOU INTENDED TO BID $ .216 EACH RATHER THAN $2.16 EACH. THE MISTAKE IS ALLEGED TO HAVE BEEN MADE IN COPYING THE BID FIGURE FROM THE WORK COPY TO THE FINAL BID SHEET BY TRANSPOSING THE DECIMAL POINT. AS EVIDENCE OF THE MISTAKE YOU HAVE SUBMITTED YOUR WORKSHEET ON WHICH THE FIGURE ".216" IS WRITTEN OPPOSITE ITEM 104. FIVE OTHERS WERE RECEIVED ON ITEM 104.

B-159404, AUG. 4, 1966

TO CALIFORNIA TRUCK PARTS AND EQUIPMENT CO.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF JUNE 7, 1966, WITH ENCLOSURE, REQUESTING RELIEF UNDER CONTRACT NO. 27-6090-149, AWARDED BY THE DEFENSE SURPLUS SALES OFFICE, COLUMBUS, OHIO.

THE SUBJECT CONTRACT WAS AWARDED ON JUNE 6, 1966, FOR ITEM 104 OF INVITATION FOR BIDS NO. 27-6090, WHICH WAS COMPRISED OF 3,426 UNUSED PISTON RING SETS, HAVING A TOTAL ACQUISITION COST OF $14,046.60. APPEARS THAT THIS WAS THE ONLY ITEM, OF SOME 174 ITEMS OFFERED, THAT YOU BID ON. YOUR BID WAS IN THE AMOUNT OF $2.16 EACH FOR A TOTAL BID OF $7,400.16, AND THE CONTRACT WAS AWARDED IN THIS AMOUNT. YOU ALLEGE THAT A MISTAKE WAS MADE IN PREPARING YOUR BID AND THAT YOU INTENDED TO BID $ .216 EACH RATHER THAN $2.16 EACH. THE MISTAKE IS ALLEGED TO HAVE BEEN MADE IN COPYING THE BID FIGURE FROM THE WORK COPY TO THE FINAL BID SHEET BY TRANSPOSING THE DECIMAL POINT. AS EVIDENCE OF THE MISTAKE YOU HAVE SUBMITTED YOUR WORKSHEET ON WHICH THE FIGURE ".216" IS WRITTEN OPPOSITE ITEM 104.

IN ADDITION TO YOUR BID, FIVE OTHERS WERE RECEIVED ON ITEM 104. THEY WERE IN THE AMOUNTS OF $ .511, $ .225, $ .19, $ .112 AND $ .10. YOUR BID REPRESENTS APPROXIMATELY 52 PERCENT OF THE ACQUISITION COST. THE CONTRACTING OFFICER TAKES THE POSITION THAT HE HAD NO REASON TO SUSPECT A MISTAKE SINCE A BID OF 52 PERCENT OF THE ACQUISITION COST OF SURPLUS PROPERTY AND FOUR TIMES THE AMOUNT OF THE NEXT HIGHEST BID IS NOT UNUSUAL. THIS IS PARTICULARLY TRUE, HE ADDS, WHERE THE ITEM BEING SOLD IS "UNUSED.' IT IS THEREFORE ADMINISTRATIVELY RECOMMENDED THAT YOUR REQUEST FOR RELIEF BE DENIED.

IN ORDER FOR YOUR FIRM TO BE ENTITLED TO SOME RELIEF UNDER THIS CONTRACT YOU MUST ESTABLISH BOTH A MISTAKE IN YOUR BID AND KNOWLEDGE, ACTUAL OR CONSTRUCTIVE, OF THE MISTAKE ON THE PART OF THE GOVERNMENT. EVEN IF THERE WAS IN FACT A MISTAKE, ALTHOUGH WE BELIEVE THE EVIDENCE SUBMITTED TO ESTABLISH THE EXISTENCE OF SUCH A MISTAKE IS INCONCLUSIVE, SUCH FACTOR ALONE WOULD NOT ENTITLE YOU TO RELIEF FROM THE CONTRACT. THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF THE ERROR WHICH YOU ALLEGE WAS MADE IN YOUR BID, AND 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. 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. THUS, THE FACT THAT YOUR BID FOR ITEM 104 MAY HAVE BEEN SUBSTANTIALLY HIGHER THAN ANY OF THE OTHER BIDS RECEIVED FOR THIS ITEM WOULD NOT OF ITSELF HAVE ALERTED THE CONTRACTING OFFICER TO THE PROBABILITY OF ERROR IN YOUR BID. UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956. WE BELIEVE THE SAME REASONING IS APPLICABLE INSOFAR AS THE RELATIONSHIP BETWEEN THE BID PRICE AND ACQUISITION COST OF THE SURPLUS PROPERTY IS CONCERNED, SINCE THE BID PRICE IS ONLY ABOUT ONE HALF OF THE ORIGINAL COST OF THE RINGS WHICH ARE UNUSED AND APPEAR TO BE IN GOOD CONDITION AND THE VALUE OF PARTICULAR EQUIPMENT OR SUPPLIES TO A PROSPECTIVE PURCHASER IS OFTEN GOVERNED BY VARIOUS AND SUNDRY FACTORS NOT COGNIZABLE TO THE CONTRACTING OFFICER.

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. IN THESE 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 YOU ANY RELIEF FROM YOUR OBLIGATION UNDER THE CONTRACT.