B-163837, APR. 8, 1968

B-163837: Apr 8, 1968

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KNOTT: REFERENCE IS MADE TO A LETTER OF MARCH 15. SUEHS BID ON 16 OF THE 17 ITEMS AND WAS HIGH BIDDER ON ITEMS 13 THROUGH 17 IN THE AMOUNTS OF $501. AWARD WAS MADE TO HIM ON NOBEMBER 20. THE SECOND HIGH BIDS ON THESE ITEMS WERE $330. SUEHS' BIDS WERE FROM 100 TO 130 PERCENT ABOVE THE APPRAISAL PRICES. SUBSTANTIATION OF THE ERROR WAS REQUESTED BY THE CONTRACTING OFFICER. WHICH SHOW THAT HIS BID PRICE RANGE WAS IN THE 1964 AVERAGE WHOLESALE AND AVERAGE LOAN VALUE RANGE FOR THE VEHICLES AS ALLEGED. SUEHS' REQUEST FOR RELIEF IN ACCORDANCE WITH MISTAKE IN BID PROCEDURE HE DETERMINED THAT THE MISTAKE WAS UNILATERAL ON THE BIDDER'S PART AND WAS NOT SO APPARENT AS TO CHARGE HIM WITH NOTICE OF THE PROBABILITY OF A MISTAKE.

B-163837, APR. 8, 1968

TO MR. KNOTT:

REFERENCE IS MADE TO A LETTER OF MARCH 15, 1968, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, FORWARDING FOR OUR DECISION THE REQUEST OF MR. EUGENE SUEHS, CASTROVILLE, TEXAS, FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF A SALE OF SURPLUS VEHICLES.

THE FORT WORTH REGIONAL OFFICE INVITED SEALED BIDS UNDER SALE NO. 7DPS-68 -153 COVERING 17 VEHICLES WITH BID OPENING ON NOVEMBER 16, 1967. MR. SUEHS BID ON 16 OF THE 17 ITEMS AND WAS HIGH BIDDER ON ITEMS 13 THROUGH 17 IN THE AMOUNTS OF $501, $576, $576, $576, AND $606.99, RESPECTIVELY, IN THE TOTAL AMOUNT OF $2,835.99. ITEMS 13 THROUGH 16 COVERED 1962 PLYMOUTH AUTOMOBILES AND ITEM 17 COVERED A 1963 PLYMOUTH AUTOMOBILE. AWARD WAS MADE TO HIM ON NOBEMBER 20, 1967, FOR ITEMS 13 THROUGH 17. THE SECOND HIGH BIDS ON THESE ITEMS WERE $330, $330, $330, $387.50, AND $437, RESPECTIVELY, OR FOR A TOTAL OF $1,814.50. MR. SUEHS' BIDS WERE FROM 100 TO 130 PERCENT ABOVE THE APPRAISAL PRICES, AND 49 TO 75 PERCENT ABOVE THE NEXT HIGH BIDS RECEIVED FOR THOSE ITEMS. BY LETTER DATED NOVEMBER 22, 1967, MR. SUEHS ALLEGED THAT HE MADE A MISTAKE IN HIS BID ON THESE ITEMS AND REQUESTED THAT THE AWARD BE RESCINDED. IN MAKING BIDS ON SURPLUS GENERAL SERVICES ADMINISTRATION VEHICLES, MR. SUEHS UTILIZED THE CURRENT NADA OFFICIAL USED CAR GUIDE. HE CONTENDS THAT UPON RECEIPT OF THE AWARD HE FOUND THAT HE HAD INADVERTENTLY REFERRED TO THE WRONG PAGE OF THE NADA GUIDE IN ARRIVING AT HIS BID PRICES. MR. SUEHS STATES THAT HE USED PAGE 138 OF THE GUIDE WHICH PERTAINS TO 1964 MODEL PLYMOUTH VEHICLES INSTEAD OF PAGE 140 WHICH PERTAINS TO 1962 MODEL PLYMOUTHS, THEREBY MISTAKENLY USING THE WRONG REFERENCE TO ARRIVE AT HIS BID PRICE FOR THE VEHICLES. ALLEGES FURTHER THAT HE USED THE SUGGESTED NADA AVERAGE LOAN VALUE, OR BELOW, AS A GUIDE ON ALL HIS BIDS FOR SURPLUS VEHICLES. SUBSTANTIATION OF THE ERROR WAS REQUESTED BY THE CONTRACTING OFFICER, AND IN REPLY MR. SUEHS FORWARDED PHOTOGRAPHIC COPIES OF PAGES 138 AND 140 OF THE NADA USED CAR GUIDE FOR OCTOBER 1967, WHICH SHOW THAT HIS BID PRICE RANGE WAS IN THE 1964 AVERAGE WHOLESALE AND AVERAGE LOAN VALUE RANGE FOR THE VEHICLES AS ALLEGED.

THE CONTRACTING OFFICER REPORTS THAT AT THE TIME HE PROCESSED MR. SUEHS' REQUEST FOR RELIEF IN ACCORDANCE WITH MISTAKE IN BID PROCEDURE HE DETERMINED THAT THE MISTAKE WAS UNILATERAL ON THE BIDDER'S PART AND WAS NOT SO APPARENT AS TO CHARGE HIM WITH NOTICE OF THE PROBABILITY OF A MISTAKE. HOWEVER, HE NOW REPORTS THAT HE HAD WONDERED AT THE TIME OF AWARD WHETHER MR. SUEHS HAD MADE A MISTAKE IN HIS BIDS AND THAT HE SHOULD HAVE REQUESTED VERIFICATION. IN VIEW THEREOF, IT IS BELIEVED THAT UNDER THE CIRCUMSTANCES AN HONEST MISTAKE HAS BEEN MADE BY MR. SUEHS AND THAT HE HAS FURNISHED CLEAR AND CONVINCING EVIDENCE OF HIS MISTAKE. IT IS THEREFORE RECOMMENDED THAT THE CONTRACT BE RESCINDED.

WE AGREE THAT THE PRICES RECEIVED FOR THOSE VEHICLES WERE GROSSLY OUT OF LINE WITH THE APPRAISAL PRICES SET FOR THE VEHICLES AND THAT THE DISPARITY BETWEEN THE PRICES SUBMITTED BY THE TWO HIGHEST BIDDERS SHOULD HAVE RAISED ENOUGH DOUBT AS TO THEIR CORRECTNESS TO HAVE MOTIVATED THE CONTRACTING OFFICER AND IMPOSED A DUTY ON HIM TO VERIFY THE BIDS. WHILE A WIDE RANGE OF BID PRICES IN SURPLUS SALES ORDINARILY IS NOT ENOUGH TO PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR, WE FEEL THAT THE RELATED CIRCUMSTANCES, PARTICULARLY THE FACT THAT THE BIDS WERE QUESTIONED BUT NOT VERIFIED, ARE SUFFICIENT TO REQUIRE US TO CONCLUDE THAT THE CONTRACTING OFFICER HAD CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR IN THE BID PRIOR TO AWARD.

SINCE THE ACCEPTANCE OF A BID WITH KNOWLEDGE, EITHER CONSTRUCTIVE OR ACTUAL, OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT, RESCISSION OF THE CONTRACT, AS ADMINISTRATIVELY RECOMMENDED, IS AUTHORIZED.