B-175769, JUN 1, 1972

B-175769: Jun 1, 1972

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SINCE THE AWARD WAS MADE AT A BID PRICE OF $3.03 PER UNIT AND THE ABSTRACT OF BIDS SHOWS THAT THE OTHER SIX BIDS RANGED FROM $1.44 TO $0.676 PER UNIT. AGREES THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID. ROBINSON: REFERENCE IS MADE TO LETTER DSAH-G DATED APRIL 18. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY HARRY STANOFF WAR SURPLUS TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 41-2129-037 IS BASED. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEM 99 AND OTHER ITEMS ON MARCH 27. IT IS REPORTED THAT ON MARCH 28. STANOFF STATED THAT THE ERROR WAS MADE IN COPYING THE AMOUNT INTENDED TO THE BID FORM.

B-175769, JUN 1, 1972

CONTRACT - CANCELLATION - MISTAKE IN BID DECISION ALLOWING CANCELLATION OF A PORTION OF A SALES CONTRACT AWARDED TO HARRY STANOFF WAR SURPLUS BY THE DEFENSE SURPLUS SALES OFFICE, OGDEN, UTAH. SINCE THE AWARD WAS MADE AT A BID PRICE OF $3.03 PER UNIT AND THE ABSTRACT OF BIDS SHOWS THAT THE OTHER SIX BIDS RANGED FROM $1.44 TO $0.676 PER UNIT, THE COMP. GEN. AGREES THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON CONSTRUCTIVE NOTICE OF AN ERROR IN THE BID.

TO GENERAL WALLACE H. ROBINSON:

REFERENCE IS MADE TO LETTER DSAH-G DATED APRIL 18, 1972, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, HEADQUARTERS, CAMERON STATION, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY HARRY STANOFF WAR SURPLUS TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 41-2129-037 IS BASED.

THE DEFENSE SURPLUS SALES OFFICE, DEFENSE DEPOT OGDEN STATION, OGDEN, UTAH, BY INVITATION FOR BIDS NO. 41-2129 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS, INCLUDING ITEM 99 DESCRIBED AS 1,200 EACH MAN'S COLD WEATHER COAT LINERS, USED, GOOD CONDITION, REPAIRS REQUIRED. IN RESPONSE HARRY STANOFF WAR SURPLUS SUBMITTED A BID DATED MARCH 17, 1972, OFFERING TO PURCHASE, AMONG OTHER ITEMS, THE COAT LINERS UNDER ITEM 99 AT A UNIT PRICE OF $3.03. THE BID OF THE COMPANY WAS ACCEPTED AS TO ITEM 99 AND OTHER ITEMS ON MARCH 27, 1972.

IT IS REPORTED THAT ON MARCH 28, 1972, MR. STANOFF TELEPHONED THE SALES CONTRACTING OFFICER AND ALLEGED THAT AN ERROR HAD BEEN MADE ON ITEM 99 IN THAT HE HAD INTENDED TO BID $1.03 INSTEAD OF $3.03 AS THE UNIT PRICE FOR ITEM 99. IN A CONFIRMING LETTER, MR. STANOFF STATED THAT THE ERROR WAS MADE IN COPYING THE AMOUNT INTENDED TO THE BID FORM. HOWEVER, NO EVIDENCE ESTABLISHING THE INTENDED BID WAS SUBMITTED.

THE ABSTRACT OF BIDS SHOWS THAT THE SIX OTHER BIDS ON ITEM 99 RANGED FROM $1.44 TO $0.676 EACH. THE CURRENT MARKET APPRAISAL VALUE, KNOWN TO THE CONTRACTING OFFICER PRIOR TO BID OPENING, WAS $1 EACH. IN HIS REPORT THE CONTRACTING OFFICER STATES THAT HE SHOULD HAVE BEEN ON NOTICE OF A MISTAKE IN THE BID OF HARRY STANOFF WAR SURPLUS BECAUSE MR. STANOFF BID THE SAME PRICE FOR MEN'S FIELD COATS, ALSO OFFERED UNDER THE INVITATION, AS HE HAD BID FOR THE LINERS FOR THESE COATS. IN THAT CONNECTION, THE ACTING COUNSEL FOR THE DEFENSE LOGISTICS SERVICES CENTER EXPRESSES THE OPINION THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED VERIFICATION OF THE COMPANY'S BID. THE BASIS FOR THIS OPINION IS THAT THE ACTUAL MARKET VALUE OF THE LINERS WAS ESTABLISHED BY OTHER BIDS RECEIVED ON OTHER INVITATION ITEMS FOR LINERS IDENTICAL TO THOSE COVERED BY ITEM 99, AND THAT THE DIFFERENCE BETWEEN THE BID PRICE OF HARRY STANOFF WAR SURPLUS ON ITEM 99 AND THE OTHER BID PRICES RECEIVED ON THE OTHER ITEMS WAS SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF MISTAKE IN THE BID. THE CENTER, TOGETHER WITH THE CONTRACTING OFFICER, HAS RECOMMENDED THAT ITEM 99 OF THE CONTRACT BE CANCELED.

IN THE CIRCUMSTANCES, WE AGREE WITH THE CENTER THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A POSSIBLE ERROR WHICH SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD. SEE B-165568, NOVEMBER 21, 1968.

ACCORDINGLY, ITEM 99 OF CONTRACT NO. 41-2129-037 MAY BE CANCELED WITHOUT LIABILITY TO HARRY STANOFF WAR SURPLUS, AS ADMINISTRATIVELY RECOMMENDED.