B-169076, MAR. 9, 1970

B-169076: Mar 9, 1970

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THAT BID PRICE WAS INTENDED FOR ITEM 84. CONTRACTING OFFICER DETERMINED HE SHOULD HAVE BEEN AWARE OF PROBABILITY OF MISTAKE AND SHOULD HAVE VERIFIED BID PRIOR TO AWARD EVEN THOUGH WIDE RANGE OF BID PRICES IN SURPLUS SALES ORDINARILY IS NOT ENOUGH TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR BUT. KUNZIG: REFERENCE IS MADE TO LETTER DATED FEBRUARY 13. NORMAN CARROLL FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF THE SALES CONTRACT WAS MADE BY THE GENERAL SERVICES ADMINISTRATION. AMONG THE ARTICLES LISTED IN THE SALES INVITATION WERE ITEMS NOS. 84 AND 85. BIDS WERE OPENED SEPTEMBER 16. CARROLL WAS THE HIGH BIDDER ON ITEM 85. NOTICE OF AWARD WAS ISSUED TO MR.

B-169076, MAR. 9, 1970

SALES--BIDS--MISTAKES--CONTRACT CANCELLATION--BID PRICE ON WRONG ITEM WHERE PURCHASER ALLEGED AFTER AWARD OF CONTRACT FOR ITEM 85, 1961 GMC DUMP TRUCK, THAT BID PRICE WAS INTENDED FOR ITEM 84, INTERNATIONAL CRAWLER TRACTOR, BECAUSE OF DIFFERENCE BETWEEN HIGH BID, UPSET PRICE AND ESTIMATED MARKET VALUE, CONTRACTING OFFICER DETERMINED HE SHOULD HAVE BEEN AWARE OF PROBABILITY OF MISTAKE AND SHOULD HAVE VERIFIED BID PRIOR TO AWARD EVEN THOUGH WIDE RANGE OF BID PRICES IN SURPLUS SALES ORDINARILY IS NOT ENOUGH TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF POSSIBILITY OF ERROR BUT, IN VIEW OF CONTRACTING OFFICER'S OWN STATEMENTS AND SINCE EVIDENCE OF RECORD ESTABLISHES ERROR AS ALLEGED, CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY TO BIDDER AS ADMINISTRATIVELY RECOMMENDED. SEE COMP. GEN. DECS. AND CT. CASES CITED.

TO MR. KUNZIG:

REFERENCE IS MADE TO LETTER DATED FEBRUARY 13, 1970, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, SUBMITTING FOR OUR DECISION A REQUEST BY MR. NORMAN CARROLL FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF THE SALES CONTRACT WAS MADE BY THE GENERAL SERVICES ADMINISTRATION, AUBURN, WASHINGTON.

THE AUBURN REGIONAL OFFICE ISSUED SALES INVITATION NO. 10DPS-70-221 ON AUGUST 25, 1969, COVERING 222 ITEMS OF MISCELLANEOUS VEHICLES AND MACHINERY. AMONG THE ARTICLES LISTED IN THE SALES INVITATION WERE ITEMS NOS. 84 AND 85, A 1953 INTERNATIONAL CRAWLER TRACTOR AND A 1961 GMC DUMP TRUCK, RESPECTIVELY. BIDS WERE OPENED SEPTEMBER 16, 1969, AND MR. CARROLL WAS THE HIGH BIDDER ON ITEM 85, THE 1961 GMC DUMP TRUCK, IN THE AMOUNT OF $1,056.98. NOTICE OF AWARD WAS ISSUED TO MR. CARROLL ON SEPTEMBER 26, 1969.

BY LETTER OF OCTOBER 8, 1969, MR. CARROLL NOTIFIED THE AUBURN OFFICE THAT HE HAD MADE A MISTAKE IN HIS BID AND REQUESTED CANCELLATION OF THE CONTRACT FOR ITEM 85. IN HIS LETTER MR. CARROLL STATED THAT HE INTENDED TO BID ON ITEM 84, 1953 INTERNATIONAL CRAWLER, AND, THROUGH INADVERTANCE ON HIS PART, ENTERED HIS BID ON THE LINE FOR ITEM 85, RATHER THAN ON THE LINE FOR ITEM 84. IN SUPPORT OF HIS CONTENTION, MR. CARROLL'S LETTER WAS ACCOMPANIED BY A LETTER FROM A BUREAU OF LAND MANAGEMENT EMPLOYEE STATING HE HAD INSPECTED ITEM 84 FOR MR. CARROLL; THAT HE HAD CONSIDERED PURCHASING THE ITEM WITH MR. CARROLL; AND THAT HE THOUGHT THE MISTAKE ON THE PART OF MR. CARROLL TO BE AN HONEST ONE.

THE SUMMARY OF BIDS REVEALS THAT THE 12 BIDS SUBMITTED BY OTHER BIDDERS ON ITEM 85 RANGED FROM A LOW OF $60 TO $805, THE LATTER BEING THE SECOND HIGHEST BID AFTER THAT OF MR. CARROLL. THE 33 BID PRICES SUBMITTED ON ITEM 84 RANGED FROM A LOW OF $50 TO A HIGH OF $2,055 AND IF MR. CARROLL'S BID HAD BEEN SUBMITTED, IT WOULD HAVE BEEN THE 10TH HIGHEST.

WHERE A MISTAKE HAS BEEN ALLEGED AFTER AWARD OF THE CONTRACT, OUR OFFICE WILL GRANT RELIEF IF THE MISTAKE WAS MUTUAL OR THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. WENDER PRESSES, INC. V UNITED STATES, 343 F. 2D 961 (1965); C. N. MONROE MANUFACTURING COMPANY V UNITED STATES, 143 F. SUPP. 449 (1956); B-165568, NOVEMBER 21, 1968; B-158334, JANUARY 21, 1966. A WIDE RANGE OF BID PRICES IN RESPONSE TO A SURPLUS SALE IS NOT SUFFICIENT TO PLACE A CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR. SEE UNITED STATES V SABIN METAL CORPORATION, 151 F. SUPP. 683 (1957). HOWEVER, IN SURPLUS SALES CASES WHEREIN ADDITIONAL CIRCUMSTANCES KNOWN TO THE CONTRACTING OFFICER AT THE TIME OF AWARD MAY BE SAID TO CONSTITUTE NOTICE OF POSSIBLE MISTAKE IN BID, OUR OFFICE HAS ALLOWED RESCISSION OF THE SALES CONTRACT. SEE B-157656, SEPTEMBER 23, 1965.

THE CONTRACTING OFFICER HAS REPORTED THAT THE UPSET PRICE FOR ITEM 85, THE 1961 GMC TRUCK, WAS $500, THIS PRICE BEING BASED ON PREVIOUS SALES FOR SIMILAR ITEMS. HE FURTHER STATED THAT THE ESTIMATED MARKET VALUE FOR THE TRUCK WAS $800 AND THAT THIS WAS THE PRICE THAT WAS EXPECTED FOR THE ITEM IN THAT AREA. BECAUSE OF THE DIFFERENCE BETWEEN THE HIGH BID, THE UPSET PRICE AND THE ESTIMATED MARKET VALUE, THE CONTRACTING OFFICER DETERMINED THAT HE SHOULD HAVE BEEN AWARE OF THE PROBABILITY OF MISTAKE AND THAT HE SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD.

IN VIEW OF THE CONTRACTING OFFICER'S OWN STATEMENTS THAT HE SHOULD HAVE BEEN ON NOTICE OF ERROR IN THE BID, AND SINCE THE EVIDENCE OF RECORD ESTABLISHES THE ERROR AS ALLEGED, THE CONTRACT SHOULD BE CANCELED WITHOUT LIABILITY TO THE BIDDER AS ADMINISTRATIVELY RECOMMENDED. COPY ENCLOSED.