B-169892, JUN. 3, 1970

B-169892: Jun 3, 1970

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WHEREAS OTHER TWO BIDS SUBMITTED WERE $0.0511 AND $0.0363. MAY HAVE SAID ITEM CANCELED. SINCE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND SHOULD HAVE VERIFIED BID PRIOR TO AWARD BECAUSE OF SUBSTANTIAL DISPARITY WHICH EXISTED BETWEEN BID ACCEPTED. TO GENERAL HEDLUND: REFERENCE IS MADE TO A LETTER DATED MAY 21. TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 41-0134-047 IS BASED. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEM 12 AND THREE OTHER ITEMS ON MAY 4. IT IS REPORTED THAT ON MAY 5. THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS ON ITEM 12 WERE IN THE AMOUNTS OF $0.0511 AND $0.0363 PER POUND. WAS $0.20 PER POUND. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT AN ERROR IN THE BID OF THE CORPORATION AS TO ITEM 12 WAS NOT SUSPECTED PRIOR TO AWARD BECAUSE OF THE AMOUNT OF THE CURRENT APPRAISAL VALUE OF THAT ITEM AND THE TYPE OF PROPERTY OFFERED FOR SALE THEREUNDER.

B-169892, JUN. 3, 1970

SALES--BIDS--MISTAKES--CONTRACTING OFFICER'S ERROR DETECTION DUTY--ERROR VERIFICATION REQUIREMENT PURCHASER AT GOVERNMENT SALE WHO ALLEGES HE MISTAKENLY SUBMITTED BID PRICE OF $0.4589, INSTEAD OF $0.04589 AS SHOWN ON WORKSHEET, PER POUND ON ITEM 12 SCRAP METAL HAVING MARKET VALUE OF $0.20 PER POUND, WHEREAS OTHER TWO BIDS SUBMITTED WERE $0.0511 AND $0.0363, MAY HAVE SAID ITEM CANCELED, AS ADMINISTRATIVELY RECOMMENDED, SINCE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND SHOULD HAVE VERIFIED BID PRIOR TO AWARD BECAUSE OF SUBSTANTIAL DISPARITY WHICH EXISTED BETWEEN BID ACCEPTED, NEXT HIGH BID, AND CURRENT MARKET VALUE. SEE COMP. GEN. DECS. CITED.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO A LETTER DATED MAY 21, 1970, FILE REFERENCE DSAH G, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, CAMERON STATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY ZIDELL EXPLORATIONS, INC; TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 41-0134-047 IS BASED.

THE DEFENSE SURPLUS SALES OFFICE, DEFENSE DEPOT OGDEN STATION, OGDEN, UTAH, BY INVITATION NO. 41-0134 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS, INCLUDING ITEM 12 DESCRIBED AS COPPER, WIRE AND CABLE, INSULATED, SCRAP, 10,000 POUNDS. IN RESPONSE, ZIDELL EXPLORATIONS, INC; SUBMITTED A BID DATED APRIL 24, 1970, OFFERING TO PURCHASE, AMONG OTHER ITEMS, THE SCRAP UNDER ITEM 12 AT A UNIT PRICE OF $0.4589 PER POUND. THE BID OF THE CORPORATION WAS ACCEPTED AS TO ITEM 12 AND THREE OTHER ITEMS ON MAY 4, 1970.

IT IS REPORTED THAT ON MAY 5, 1970, THE SECRETARY OF THE CORPORATION TELEPHONED THE CONTRACTING OFFICER AND ALLEGED THAT AN ERROR HAD BEEN MADE IN THE CORPORATION'S BID ON ITEM 12. IN A LETTER DATED MAY 5, 1970, THE MANAGER OF THE CORPORATION'S SCRAP DIVISION STATED THAT IN USING THE WORKSHEET PREPARED BY HIM, HIS SECRETARY MISREAD $0.04589 AS $0.4589 AND INSERTED THAT AMOUNT IN THE CORPORATION'S BID AS THE UNIT PRICE FOR ITEM 12. IN SUPPORT OF HIS REQUEST THAT ITEM 12 BE DELETED FROM THE CONTRACT, THE MANAGER SUBMITTED HIS WORKSHEET THAT ALLEGEDLY SHOWS A UNIT PRICE OF $0.04589 FOR ITEM 12.

THE ABSTRACT OF BIDS SHOWS THAT THE TWO OTHER BIDS ON ITEM 12 WERE IN THE AMOUNTS OF $0.0511 AND $0.0363 PER POUND. THE CURRENT MARKET APPRAISAL VALUE, KNOWN TO THE CONTRACTING OFFICER PRIOR TO BID OPENING, WAS $0.20 PER POUND. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT AN ERROR IN THE BID OF THE CORPORATION AS TO ITEM 12 WAS NOT SUSPECTED PRIOR TO AWARD BECAUSE OF THE AMOUNT OF THE CURRENT APPRAISAL VALUE OF THAT ITEM AND THE TYPE OF PROPERTY OFFERED FOR SALE THEREUNDER. IN THAT CONNECTION, THE DEFENSE LOGISTICS SERVICES CENTER STATES THAT THE CENTER IS OF THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE CORPORATION'S BID BECAUSE OF THE FOLLOWING FACTORS. IT IS POINTED OUT THAT THE PROPERTY OFFERED FOR SALE UNDER ITEM 12 CONSISTED OF SCRAP METAL; THAT IT IS A GENERALLY ACCEPTED FACT THAT BIDS ON SCRAP METAL DO NOT VARY AS GREATLY AS DO BIDS ON USEABLE SURPLUS PROPERTY; AND THAT THERE IS A SUBSTANTIAL DISPARITY BETWEEN THE CORPORATION'S BID ON ITEM 12 AND THE NEXT HIGH BID AND THE CURRENT MARKET APPRAISAL OF THAT ITEM. IN SUPPORT OF ITS RECOMMENDATION THAT ITEM 12 BE DELETED FROM THE CONTRACT, THE CENTER HAS CITED OUR DECISIONS B-158334, JANUARY 21, 1966; B-160704, FEBRUARY 16, 1967; AND B-169254, MARCH 25, 1970. WE AGREE WITH THE CENTER THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND THAT THE BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD.

ACCORDINGLY, ITEM 12 OF CONTRACT NO. 41-0134-047 MAY BE CANCELED WITHOUT LIABILITY TO THE CORPORATION.