B-173931, OCT 21, 1971

B-173931: Oct 21, 1971

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HIGH BID WAS $1. THE CONTRACTING OFFICER MAY BE CONSIDERED TO HAVE HAD NOTICE OF THE MISTAKE. KUNZIG: REFERENCE IS MADE TO LETTER DATED AUGUST 23. INFORMAL COMPETITIVE BIDS WERE INVITED FOR 38 ITEMS OF MISCELLANEOUS PROPERTY LOCATED AT VARIOUS SITES IN NEVADA. ITEM 38 OF THE SALE WAS DESCRIBED AS FOLLOWS: "BACKHOE. WAS AS FOLLOWS: "BACKHOE. BACKHOE IS WORN OUT - ESTIMATED COST TO REPAIR: NEW SWING CYLINDER AND MINOR PARTS: $ 500.00 NEW PUMP & TANK 900.00 PLUS LABOR 600.00 TOTAL $2. AN UPSET PRICE OF $100 WAS ESTABLISHED. 152 FOR ITEM 38 AND WAS AWARDED THE SALE UNDER CONTRACT NO. -5087 ON JUNE 11. THE RECORD SHOWS THAT A TOTAL OF 13 BIDS WERE RECEIVED FOR ITEM 38 WHICH RANGED FROM A LOW OF $31.57 TO A SECOND HIGH OF $531.13.

B-173931, OCT 21, 1971

SALES CONTRACTS - MISTAKE - CONSTRUCTIVE NOTICE DECISION GRANTING RELIEF TO MR. LYLE MALONE FOR MISTAKE MADE IN BID UNDER SALES LETTER ISSUED BY GSA, PROPERTY MANAGEMENT AND DISPOSAL SERVICE. ALTHOUGH WIDE VARIANCE IN BID PRICES DOES NOT NECESSARILY GIVE CONSTRUCTIVE NOTICE OF MISTAKE TO A CONTRACTING OFFICER, WHERE, AS HERE, HIGH BID WAS $1,152 AND THE OTHER 13 BIDS RANGED FROM $31.57 TO SECOND HIGH OF $531.13, THE CONTRACTING OFFICER MAY BE CONSIDERED TO HAVE HAD NOTICE OF THE MISTAKE.

TO MR. KUNZIG:

REFERENCE IS MADE TO LETTER DATED AUGUST 23, 1971, WITH ENCLOSURES, FROM YOUR GENERAL COUNSEL, SUBMITTING FOR OUR DECISION THE REQUEST OF MR. LYLE MALONE, BATTLE MOUNTAIN, NEVADA, FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. GS-09-DP-(S)-1-5087 UNDER SALES LETTER NO. 9- DPSSF)71-142, ISSUED BY THE PROPERTY MANAGEMENT AND DISPOSAL SERVICE, SAN FRANCISCO, CALIFORNIA.

INFORMAL COMPETITIVE BIDS WERE INVITED FOR 38 ITEMS OF MISCELLANEOUS PROPERTY LOCATED AT VARIOUS SITES IN NEVADA.

ITEM 38 OF THE SALE WAS DESCRIBED AS FOLLOWS:

"BACKHOE, JOHN DEERE, HYDRAULIC, MODEL 50, 24" BUCKET, USED ON MODEL 500, JOHN DEERE TRACTOR, REPAIRS REQUIRED. 1 EACH"

THE DESCRIPTION OF THE ITEM FURNISHED TO THE SELLING ACTIVITY BY THE PORTLAND SERVICE CENTER, BUREAU OF LAND MANAGEMENT, WAS AS FOLLOWS:

"BACKHOE, JOHN DEERE, HYDRAULIC, MDL. 50, 24 INCH BUCKET, USED ON MDL. 500 JOHN DEERE TRACTOR PURCHASED IN 1961.

"ACQUISITION COST PER UNIT - $2750.00

"POOR CONDITION REPAIRS REQUIRED.

BACKHOE IS WORN OUT - ESTIMATED COST TO REPAIR:

NEW SWING CYLINDER AND MINOR PARTS: $ 500.00

NEW PUMP & TANK 900.00

PLUS LABOR 600.00

TOTAL $2,000.00"

IN VIEW OF THIS INFORMATION, AN UPSET PRICE OF $100 WAS ESTABLISHED. MR. LYLE MALONE SUBMITTED A BID OF $1,152 FOR ITEM 38 AND WAS AWARDED THE SALE UNDER CONTRACT NO. -5087 ON JUNE 11, 1971. THE RECORD SHOWS THAT A TOTAL OF 13 BIDS WERE RECEIVED FOR ITEM 38 WHICH RANGED FROM A LOW OF $31.57 TO A SECOND HIGH OF $531.13.

BY LETTERS DATED JUNE 10 AND 27, 1971, MR. MALONE REQUESTED RELIEF BASED ON A CLAIM OF MISTAKE IN BID. PAYMENT HAS NOT BEEN MADE AND PERFORMANCE OF THE CONTRACT HAS BEEN SUSPENDED PENDING RESOLUTION OF MR. MALONE'S REQUEST FOR RELIEF.

ORDINARILY, A WIDE RANGE OF BID PRICES IN SURPLUS PROPERTY SALES IS NOT DEEMED TO BE CONSTRUCTIVE NOTICE OF ERROR BECAUSE OF THE MANY POSSIBLE USES TO WHICH THE PROPERTY MAY BE PUT. B-170955, NOVEMBER 10, 1970. HOWEVER, THE SALES CONTRACTING OFFICER HAS STATED THAT THE WIDE DISPARITY BETWEEN MR. MALONE'S BID AND THE UPSET PRICE AND THE OTHER BIDS RECEIVED PLACED HIM ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR AND THAT HE SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD. THIS IS CONCURRED IN BY YOUR GENERAL COUNSEL.

WE AGREE THAT THE SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF PROBABILITY OF ERROR IN THE BID UPON WHICH THE SALES CONTRACT WAS BASED. B-172881, JULY 16, 1971.

ACCORDINGLY, AS ADMINISTRATIVELY RECOMMENDED, THE SALES CONTRACT MAY BE RESCINDED WITHOUT LIABILITY TO MR. LYLE MALONE.