B-172880, JUN 2, 1971

B-172880, JUN 2, 1971

CONTRACTS - MISTAKE IN BID - RESCISSION ALLOWING RESCISSION OF A SALES CONTRACT AWARDED TO MYERS NEW STEEL & METALS UNDER AN IFB ISSUED BY DEFENSE SURPLUS SALES OFFICE, FOREST PARK, GA., FOR SALE OF SCRAP CABLE. THE DISPARITY BETWEEN THE MYERS BID AND THE NEXT HIGH BID, THE GENERAL BIDDING PATTERN, AND THE KNOWLEDGE THAT BIDS FOR SCRAP METAL DO NOT GENERALLY VARY MUCH SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE IN THE BID.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTER DSAH-G DATED MAY 4, 1971, FROM THE ASSISTANT COUNSEL, SUBMITTING FOR DECISION THE REQUEST OF MYERS NEW STEEL & METALS FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF SALES CONTRACT NO. 21-1110-044 UNDER INVITATION FOR BIDS (IFB) NO. 21 1110, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, FOREST PARK, GEORGIA.

AMONG THE ITEMS LISTED FOR SALE IN THE IFB WERE ITEMS 38 AND 39: "COPPER, LEAD COVERED CABLE, SCRAP." ITEM 38 WAS LISTED AT 80,000 POUNDS AND ITEM 39 AT 100,000 POUNDS. IN ADDITION, ITEM 39 WAS DESCRIBED AS BEING "CLOTH AND ARMOR COVERED UNDERGROUND CABLE."

BIDS WERE OPENED MARCH 9, 1971. MYERS BID $0.1768 PER POUND FOR BOTH ITEMS. THE BID WAS SECOND HIGHEST ON ITEM 38 AND HIGHEST ON ITEM 39. AWARD WAS MADE TO MYERS FOR ITEM 39 ON MARCH 15, 1971.

AFTER AWARD WAS MAILED, MR. MYERS TELEPHONED THE SALES CONTRACTING OFFICER (SCO) AND RECALLED AN EARLIER CONVERSATION WITH THE SCO OR PROPERTY DISPOSAL OFFICER WHO HAD ALLEGEDLY INFORMED HIM THAT ITEMS 38 AND 39 WERE THE SAME MATERIALS, THEREBY PROMPTING THE IDENTICAL BIDS. THIS INFORMATION WAS REPEATED IN LETTER OF MARCH 15, 1971, RELATING THAT DISCOVERY OF THE MISTAKE OCCURRED WHEN A CHECK WAS MADE TO DETERMINE WHY IT HAD NOT RECEIVED AWARD FOR BOTH ITEMS.

IT IS REPORTED THAT THE MYERS BID WAS $0.012 PER POUND LESS THAN THE HIGH BID ON ITEM 38 AND, ON ITEM 39, 1.6 TIMES THE NEXT HIGH BID AND 2.4 TIMES THE THIRD HIGH BID. FURTHER, THE CURRENT MARKET APPRAISAL FOR BOTH ITEMS 38 AND 39 WAS $0.10 PER POUND. OF THE 10 OTHER BIDS ON BOTH ITEMS, ALL WERE SUBSTANTIALLY LOWER ON ITEM 39 THAN ITEM 38, MOST LESS THAN HALF AS MUCH.

FROM THE FOREGOING, THE SCO CONCLUDED THAT HE SHOULD HAVE BEEN ON NOTICE OF THE POSSIBILITY OF AN ERROR IN BID. ALTHOUGH A WIDE RANGE OF BID PRICES IN SURPLUS SALES IS NOT ORDINARILY CONSIDERED TO BE CONSTRUCTIVE NOTICE OF ERROR, WIDE PRICE VARIATIONS ARE GENERALLY NOT ENCOUNTERED IN THE SALE OF SCRAP METAL DUE TO LIMITED USES TO WHICH IT MAY BE PUT. COMP. GEN. 199 (1969); B-172285, APRIL 23, 1971.

WE AGREE THAT THE DISPARITY BETWEEN THE MYERS BID AND THE NEXT HIGH BID, THE GENERAL BIDDING PATTERN, AND THE KNOWLEDGE THAT BIDS FOR SCRAP METAL DO NOT GENERALLY VARY GREATLY SHOULD HAVE PLACED THE SCO ON NOTICE OF A POSSIBILITY OF A MISTAKE IN BID, THEREBY OCCASIONING A REQUEST FOR BID VERIFICATION. B-170955, NOVEMBER 10, 1970.

ACCORDINGLY, AS ADMINISTRATIVELY RECOMMENDED, THE SALES CONTRACT SHOULD BE RESCINDED WITHOUT ANY LIABILITY TO MYERS.