B-174525, DEC 20, 1971

B-174525: Dec 20, 1971

Additional Materials:

Contact:

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

 

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

THE SECOND HIGH BID WAS $144.45. WHICH IS USED AS A WORKSHEET SHOWING PRICE OF $1. ITEM 51 IS THE 4TH ITEM ON PAGE 7. ITEM 64 IS THE 4TH ITEM ON PAGE 8. BOTH OCCUPY THE SAME RELATIVE POSITION ON THESE PAGES WHICH ARE OPPOSITE ONE ANOTHER. A VALID TRANSPOSITION ERROR SEEMS TO HAVE OCCURRED AND UNDER THE CIRCUMSTANCES (THE WIDE DIFFERENCE IN PRICE BETWEEN THE HIGH BID OF ALTSHULE AND ALL OTHERS) THE CONTRACTING OFFICER SHOULD HAVE VERIFIED THE BID. ITEM 51 OF THE SALES LETTER WAS DESCRIBED AS FOLLOWS: "RAINCOAT. AN UPSET PRICE OF $100 WAS ESTABLISHED FOR THE ITEM. THE SECOND HIGHEST BID WAS $144.45. ITEM 51 IS THE FOURTH ITEM ON SALES LETTER PAGE 7. ITEM 64 IS THE FOURTH ITEM ON SALES LETTER PAGE 8.

B-174525, DEC 20, 1971

CONTRACTS - MISTAKE IN BID - RELIEF GRANTING RELIEF TO ALTSHULE SALES COMPANY FROM MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT UNDER A SALES LETTER ISSUED BY GSA, PROPERTY MANAGEMENT AND DISPOSAL SERVICE, SAN FRANCISCO, CA. ON ITEM 51 (MAN'S RAINCOAT, ACTUAL COST FOR 104 INVOLVED - $655.20) ALTSHULE SUBMITTED A BID OF $1,348.88. OF THE 20 BIDS, THE SECOND HIGH BID WAS $144.45. IN SUPPORT OF THE ALLEGATION ALTSHULE FURNISHED THE SALES LETTER, WHICH IS USED AS A WORKSHEET SHOWING PRICE OF $1,348.88 OPPOSITE ITEM 64, INSTEAD OF ITEM 51. ITEM 51 IS THE 4TH ITEM ON PAGE 7; ITEM 64 IS THE 4TH ITEM ON PAGE 8. BOTH OCCUPY THE SAME RELATIVE POSITION ON THESE PAGES WHICH ARE OPPOSITE ONE ANOTHER. A VALID TRANSPOSITION ERROR SEEMS TO HAVE OCCURRED AND UNDER THE CIRCUMSTANCES (THE WIDE DIFFERENCE IN PRICE BETWEEN THE HIGH BID OF ALTSHULE AND ALL OTHERS) THE CONTRACTING OFFICER SHOULD HAVE VERIFIED THE BID. ACCORDINGLY, THE CONTRACT MAY BE RESCINDED AS TO ITEM 51.

TO MR. ROBERT L. KUNZIG:

WE REFER TO A LETTER OF NOVEMBER 11, 1971, FROM YOUR GENERAL COUNSEL, SUBMITTING FOR DECISION A REQUEST BY ALTSHULE SALES COMPANY, INC. (ALTSHULE), FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF CONTRACT NO. GS-09-DP-(S)-2-0609, DATED SEPTEMBER 21, 1971, UNDER SALES LETTER NO. 9DPSSF) 72-37, ISSUED AUGUST 27, 1971, BY THE PROPERTY MANAGEMENT & DISPOSAL SERVICE, SAN FRANCISCO, CALIFORNIA.

ITEM 51 OF THE SALES LETTER WAS DESCRIBED AS FOLLOWS:

"RAINCOAT, MAN'S LIGHT-WEIGHT, DBL BREASTED W/POCKETS AND BELT, BEIGE, SIZE 44 LONG, UNUSED, APPROX. 104 EA., A/C $655.20, (HR 11-71, #20)."

AN UPSET PRICE OF $100 WAS ESTABLISHED FOR THE ITEM. OF THE TWENTY FOUR BIDS RECEIVED FOR THIS ITEM, ALTSHULE SUBMITTED THE HIGHEST BID AT $1,348.88. THE SECOND HIGHEST BID WAS $144.45.

IN A LETTER OF SEPTEMBER 21, 1971, ALTSHULE CONFIRMED ITS TELEPHONE CONVERSATION OF THE SAME DAY REQUESTING RELIEF FROM A MISTAKE IN BID ON ITEM 51. IN SUPPORT OF THE ALLEGATION OF ERROR, IT FURNISHED A COPY OF THE SALES LETTER, WHICH IT USED AS A WORKSHEET, SHOWING THE PRICE OF $1,348.88 OPPOSITE ITEM 64 INSTEAD OF ITEM 51. ITEM 51 IS THE FOURTH ITEM ON SALES LETTER PAGE 7. ITEM 64 IS THE FOURTH ITEM ON SALES LETTER PAGE 8. PAGE 7 IS OPPOSITE PAGE 8 AND ITEM 51 OCCUPIES THE SAME RELATIVE POSITION ON PAGE 7 AS ITEM 64 DOES ON PAGE 8. IT APPEARS THEREFORE THAT IN TRANSFERRING THE PRICE TO THE BID, ALTSHULE MISREAD THE PRICE ON ITS WORKSHEET FOR ITEM 64 AS APPLYING TO ITEM 51. THE STATEMENT THAT THE BID PRICE WAS INTENDED FOR ITEM 64 ALSO IS SUPPORTED BY THE FACT THAT THE HIGH BID FOR THAT ITEM WAS $2,026.11 IN LIGHT OF ITS ACQUISITION COST OF $16,516.80.

THE CONTRACTING OFFICER HAS REPORTED THAT, ON THE BASIS OF THE EVIDENCE OF THE ORIGINAL ACQUISITION COST AND THE UPSET PRICE OF THE ITEM, HE SHOULD HAVE BEEN ON NOTICE BEFORE AWARD THAT THE BIDDER HAD SUBMITTED A MISTAKEN BID. YOUR GENERAL COUNSEL CONCURS. ALTHOUGH A WIDE RANGE OF BID PRICES IN SURPLUS SALES IS NOT ORDINARILY CONSIDERED CONSTRUCTIVE NOTICE OF ERROR, WE AGREE THAT IN THIS CASE THE WIDE DISPARITY BETWEEN THE HIGH BID AND THE ACTUAL VALUE OF THE ITEM AS INDICATED BY THE ACQUISITION COST AND UPSET PRICE SHOULD HAVE PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF A MISTAKE IN BID AND THAT HE SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD. SEE B-173931, OCTOBER 21, 1971.

ACCORDINGLY, AS ADMINISTRATIVELY RECOMMENDED, THE SALES CONTRACT MAY BE RESCINDED AS TO ITEM 51.