B-165930, JAN. 27, 1969

B-165930: Jan 27, 1969

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TO GENERAL HEDLUND: REFERENCE IS MADE TO A LETTER OF JANUARY 7. CHANDLER WAS AWARDED ITEMS 70 AND 147 ON NOVEMBER 14. BIDDERS WERE REQUESTED TO SUBMIT UNIT PRICES AND TOTAL BID PRICES. THE CONTRACTOR TELEPHONED THE SALES CONTRACTING OFFICER TO INFORM HIM THAT THE AWARD WAS IN ERROR IN THAT THE CONTRACT INDICATED A TOTAL BID OF $4. CHANDLER STATED THAT HIS TOTAL BID FOR ITEM 147 WAS ACTUALLY $402.50 BASED ON HIS INTENDED UNIT BID PRICE OF $0.0175. CHANDLER'S BID WAS AS FOLLOWS: TOTAL UNIT BID BID ITEM NOMENCLATURE QUANTITY PRICE AMOUNT . 000 $0.175 $402.50 SCRAP POUNDS IT IS REPORTED THAT THE SALES OFFICE. THE CORRECT EXTENDED TOTAL SHOULD HAVE BEEN $4. THE FACE OF THE BID SHOWS THAT A BID DEPOSIT WAS FURNISHED WHICH WAS INSUFFICIENT TO COVER 20 PERCENT OF HIS TOTAL BID PRICE ON ALL ITEMS BID UPON.

B-165930, JAN. 27, 1969

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER OF JANUARY 7, 1969, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, FORWARDING FOR OUR DECISION THE REQUEST OF MR. DONALD A. CHANDLER FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF SURPLUS SALES CONTRACT 16-9042-001.

ON NOVEMBER 5, 1968, THE DEFENSE SURPLUS SALES OFFICE, NEWPORT, RHODE ISLAND, OPENED BIDS RECEIVED UNDER SEALED BID SALE NO. 16-9042, COVERING A QUANTITY OF SCRAP MATERILS, AS SPECIFIED THEREIN. DONALD A. CHANDLER WAS AWARDED ITEMS 70 AND 147 ON NOVEMBER 14, 1968. ITEM 147 COVERED 23,000 POUNDS OF SCRAP LEAD BATTERIES, AND BIDDERS WERE REQUESTED TO SUBMIT UNIT PRICES AND TOTAL BID PRICES.

UPON RECEIPT OF THE NOTICE OF AWARD, THE CONTRACTOR TELEPHONED THE SALES CONTRACTING OFFICER TO INFORM HIM THAT THE AWARD WAS IN ERROR IN THAT THE CONTRACT INDICATED A TOTAL BID OF $4,025 FOR ITEM 147 WHEN, IN FACT, HE HAD BID $402.50. BY LETTER DATED NOVEMBER 19, 1968, MR. CHANDLER STATED THAT HIS TOTAL BID FOR ITEM 147 WAS ACTUALLY $402.50 BASED ON HIS INTENDED UNIT BID PRICE OF $0.0175. MR. CHANDLER'S BID WAS AS FOLLOWS:

TOTAL

UNIT BID BID ITEM NOMENCLATURE QUANTITY PRICE AMOUNT ---- --------------- -------- - ------ ------- 147 LEAD BATTERIES, 23,000 $0.175 $402.50

SCRAP POUNDS

IT IS REPORTED THAT THE SALES OFFICE, WITHOUT REQUESTING CONFIRMATION OF THE BID, ACCEPTED MR. CHANDLER'S BID FOR ITEM 147 AT HIS UNIT PRICE OF $0.175 FOR A TOTAL PRICE OF $4,025 FOR THE 23,000 POUNDS. AT THE UNIT PRICE OF $0.175, THE CORRECT EXTENDED TOTAL SHOULD HAVE BEEN $4,025. ALSO, THE FACE OF THE BID SHOWS THAT A BID DEPOSIT WAS FURNISHED WHICH WAS INSUFFICIENT TO COVER 20 PERCENT OF HIS TOTAL BID PRICE ON ALL ITEMS BID UPON.

UNIT BID PRICES RECEIVED FROM ALL BIDDERS ON ITEM 147 CLEARLY SHOW THE BID OF CHANDLER TO BE OUT OF PROPORTION AND INCONSISTENT WITH OTHER BIDS AS FOLLOWS:

BIDDER NUMBER ITEM 147

1 (CHANDLER) $0.175

56 0.03961

66 0.0376

95 0.03699

99 0.0331 119

0.0286

THE DSA CURRENT MARKET APPRAISAL VALUE FOR ITEM 147 WAS ?02 PER POUND AND THE CURRENT METAL MARKET APPRAISAL VALUE IS REPORTED AS ?0325 PER POUND.

THE CONTRACTING OFFICER AFTER REVIEWING THE MATTER HAS DETERMINED THAT A MISTAKE IN BID ON ITEM 147 WAS PATENT ON THE FACE OF THE BID SHEET DUE TO THE INCOMPATIBILITY OF THE UNIT BID WITH THE TOTAL BID. THE FACT THAT THE CONTRACTOR HAD BID ON OTHER ITEMS OF SCRAP LEAD AT A MUCH LESSER UNIT BID SHOULD HAVE REMOVED ANY DOUBT THAT THE BID INTENDED WAS THE TOTAL BID ENTERED FOR ITEM 147, RATHER THAN HIS UNIT PRICE AS ADMINISTRATIVELY EXTENDED. THE UNIT BID PRICE EXCEEDED THE CURRENT MARKET APPRAISAL BY NEARLY 9 TIMES AND THE NEXT HIGH BID BY NEARLY 5 TIMES.

AFTER REVIEWING THE RECORD, AND HAVING REGARD FOR ARTICLE 23 OF THE GENERAL SALES TERMS AND CONDITIONS, WE BELIEVE THAT AN HONEST MISTAKE HAS BEEN MADE BY MR. CHANDLER AS CLAIMED AND THAT THE SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF A PROBABLE MISTAKE REQUIRING BID CONFIRMATION PRIOR TO AWARD. SEE B-159490, JULY 1, 1966; B-162206, AUGUST 16, 1967; B-165454, NOVEMBER 8, 1968, AND DECISIONS CITED THEREIN.

SINCE ACCEPTANCE OF A BID WITH KNOWLEDGE, EITHER CONSTRUCTIVE OR ACTUAL, OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT, THE CONTRACT MAY BE AMENDED BY DELETING ITEM 147, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO THE CONTRACTOR.