B-174321, NOV 23, 1971

B-174321: Nov 23, 1971

Additional Materials:

Contact:

Edda Emmanuelli Perez
(202) 512-2853
EmmanuelliPerezE@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

AGREES THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF A MISTAKE IN BID ON THE SALE OF SCRAP METAL SINCE THE HIGH BID WAS $.0699 PER POUND. THE SECOND HIGH BID WAS $.00369. THE CURRENT MARKET APPRAISAL WAS $.004 PER POUND AND THE HIGHEST PRICE EVER RECEIVED WAS $.00899 PER POUND. ROBINSON: REFERENCE IS MADE TO LETTER DSAH-G DATED OCTOBER 6. MAAC'S BID PRICE OF $.0699 PER POUND WAS THE HIGHEST RECEIVED AND THE CONTRACT WAS AWARDED TO IT ON JUNE 25. OUR OFFICE WILL GRANT APPROPRIATE RELIEF. IF THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. ALTHOUGH A WIDE RANGE OF BID PRICES IN SURPLUS SALES IS NOT ORDINARILY CONSIDERED TO BE CONSTRUCTIVE NOTICE OF ERROR.

B-174321, NOV 23, 1971

CONTRACT - RECISSION - MISTAKE IN BID DECISION THAT RELIEF MAY BE GRANTED TO MILITARY ADVISORS & ARMAMENT COMPANY (MAAC) BECAUSE OF A MISTAKE IN BID ALLEGED AFTER AWARD OF A SALE CONTRACT FOR 50,000 POUNDS OF SPENT BULLET METAL. THE COMP. GEN. AGREES THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF A MISTAKE IN BID ON THE SALE OF SCRAP METAL SINCE THE HIGH BID WAS $.0699 PER POUND, THE SECOND HIGH BID WAS $.00369, THE CURRENT MARKET APPRAISAL WAS $.004 PER POUND AND THE HIGHEST PRICE EVER RECEIVED WAS $.00899 PER POUND. THEREFORE, THE SALES CONTRACT MAY BE RESCINDED WITHOUT LIABILITY TO MAAC.

TO GENERAL WALLACE H. ROBINSON:

REFERENCE IS MADE TO LETTER DSAH-G DATED OCTOBER 6, 1971, WITH ENCLOSURE, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, RECOMMENDING THAT RELIEF BE GRANTED TO MILITARY ADVISORS & ARMAMENT COMPANY (MAAC) BECAUSE OF A MISTAKE IN BID ALLEGED AFTER AWARD OF SALES CONTRACT NO. 46-1148-002 ISSUED BY DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA.

THE INVITATION OFFERED FOR SALE 50,000 POUNDS OF SPENT BULLET METAL. MAAC'S BID PRICE OF $.0699 PER POUND WAS THE HIGHEST RECEIVED AND THE CONTRACT WAS AWARDED TO IT ON JUNE 25, 1971. BY LETTER OF JUNE 30, 1971, MAAC ALLEGED THAT IT MADE AN ERROR IN BID IN THAT IT HAD INTENDED TO BID $.00699 PER POUND. THEREAFTER MAAC SUBMITTED A SWORN STATEMENT IN SUPPORT OF THE ALLEGATION OF ERROR.

OUR OFFICE WILL GRANT APPROPRIATE RELIEF, SUCH AS RESCISSION WITHOUT LIABILITY TO A CONTRACTOR, WHERE A MISTAKE HAS BEEN ALLEGED SUBSEQUENT TO THE AWARD OF THE CONTRACT, IF THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. 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 METALS DUE TO THE LIMITED USES TO WHICH IT MAY BE PUT. 49 COMP. GEN. 199 (1969); B-171981, MARCH 10, 1971; B- 172880, JUNE 2, 1971.

THE FINDINGS OF THE SALES CONTRACTING OFFICER REVEAL THAT THE NEXT HIGH BID WAS $.00369 AND THE CURRENT MARKET APPRAISAL WAS $.004 PER POUND. FURTHERMORE, THE SALES CONTRACTING OFFICER STATES THAT THE HIGHEST PRICE EVER RECEIVED FOR THIS TYPE OF MATERIAL UNDER SIMILAR CONDITIONS WAS $.00899 PER POUND.

THE CIRCUMSTANCES SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF A MISTAKE IN BID. ACCORDINGLY, THE CONTRACT SHOULD BE RESCINDED WITHOUT LIABILITY TO MAAC AS ADMINISTRATIVELY RECOMMENDED.