B-172881, JUL 16, 1971

B-172881: Jul 16, 1971

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AS THE MARKET VALUE OF ITEM 33 (BRASS) IN THE SOLICITATION WAS $.30 PER POUND AND THE SECOND HIGH BID WAS $.3227 PER POUND. THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT SARVER'S BID OF $.3951 PER POUND WAS A MISTAKE AND SHOULD HAVE VERIFIED THE BID. TO GENERAL HEDLUND: REFERENCE IS MADE TO LETTER DSAH-G DATED MAY 4. AMONG THE ITEMS LISTED FOR SALE WERE ITEMS 33 AND 34 ON WHICH MR. ITEM 33 WAS DESCRIBED AS BRASS SCRAP AND ITEM 34 AS COPPER SCRAP. BIDS WERE OPENED ON MARCH 30. IT WAS DETERMINED THAT MR. THE SECOND HIGH BID WAS IN THE AMOUNT OF $.3227 PER POUND. AN AWARD WAS MADE TO MR. THE CURRENT MARKET APPRAISAL FOR ITEM 33 WAS $.30 PER POUND. SARVER BID $.3012 PER POUND FOR ITEM 34 WHICH WAS APPRAISED AT $.35 PER POUND AND THE HIGH BID FOR THIS ITEM WAS $.4518 PER POUND.

B-172881, JUL 16, 1971

SALES CONTRACT - MISTAKE - RECISSION DECISION ALLOWING RECISSION OF CONTRACT UNDER BID SUBMITTED BY MR. LEWIS SARVER ON SALES INVITATION ISSUED BY DEFENSE SURPLUS SALES OFFICE FOR BRASS AND COPPER SCRAP. AS THE MARKET VALUE OF ITEM 33 (BRASS) IN THE SOLICITATION WAS $.30 PER POUND AND THE SECOND HIGH BID WAS $.3227 PER POUND, THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THAT SARVER'S BID OF $.3951 PER POUND WAS A MISTAKE AND SHOULD HAVE VERIFIED THE BID.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTER DSAH-G DATED MAY 4, 1971, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, SUBMITTING FOR DECISION THE REQUEST OF MR. JAMES H. SARVER FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF SALES CONTRACT NO. 25-1095-019 UNDER SALES INVITATION (IFB) NO. 25-1095, ISSUED BY THE DEFENSE SURPLUS SALES OFFICE, NORFOLK, VIRGINIA.

AMONG THE ITEMS LISTED FOR SALE WERE ITEMS 33 AND 34 ON WHICH MR. SARVER BID. ITEM 33 WAS DESCRIBED AS BRASS SCRAP AND ITEM 34 AS COPPER SCRAP. EACH OF THESE ITEMS CONSISTED OF 25,000 POUNDS OF SCRAP.

BIDS WERE OPENED ON MARCH 30, 1971, AND IT WAS DETERMINED THAT MR. SARVER SUBMITTED THE HIGH BID ON ITEM 33 AT $.3951 PER POUND; THE SECOND HIGH BID WAS IN THE AMOUNT OF $.3227 PER POUND. THEREFORE, AN AWARD WAS MADE TO MR. SARVER FOR ITEM 33 ON APRIL 2, 1971. THE CURRENT MARKET APPRAISAL FOR ITEM 33 WAS $.30 PER POUND. MR. SARVER BID $.3012 PER POUND FOR ITEM 34 WHICH WAS APPRAISED AT $.35 PER POUND AND THE HIGH BID FOR THIS ITEM WAS $.4518 PER POUND.

ON APRIL 14, 1971, MR. LEWIS SARVER TELEPHONED THE SALES CONTRACTING OFFICER TO ADVISE HER THAT IN EXECUTING THE BID FOR HIS FATHER, JAMES H. SARVER, HE HAD MADE AN ERROR IN BID ON ITEM 33 BY REVERSING THE INTENDED BIDS FOR ITEMS 33 AND 34, AND THAT HE HAD INADVERTENTLY ENTERED THE PRICE FOR COPPER SCRAP FIRST AND THE BID PRICE FOR BRASS SCRAP SECOND BECAUSE HE HAD NOT NOTICED THAT BRASS SCRAP WAS LISTED BEFORE THE COPPER SCRAP LISTING.

IT IS REPORTED THAT COPPER SCRAP NORMALLY BRINGS A GREATER PRICE THAN BRASS SCRAP AND THAT THE SARVER BID OF $.3951 PER POUND EXCEEDED THE CURRENT MARKET APPRAISAL AND IS 22.4 PERCENT IN EXCESS OF THE SECOND HIGH BID PRICE OF $.3227 PER POUND.

FROM THE FOREGOING, THE SALES CONTRACTING OFFICER CONCLUDED, AND WE AGREE, THAT SHE 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. 49 COMP. GEN. 199 (1969); B-172285, APRIL 23, 1971.

WE AGREE THAT THE FACTS OF RECORD ESTABLISH THAT THE HIGH BID OF JAMES H. SARVER ON ITEM 33 SHOULD NOT HAVE BEEN ACCEPTED WITHOUT FIRST REQUESTING AND RECEIVING VERIFICATION OF THE BID PRICE.

ACCORDINGLY, AS ADMINISTRATIVELY RECOMMENDED, THE SALES CONTRACT MAY BE RESCINDED WITHOUT LIABILITY TO MR. JAMES H. SARVER.