B-181884, AUG 15, 1974

B-181884: Aug 15, 1974

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218 AND $238 ON USED TRUCK IN SURPLUS SALE AND WHO WAS AWARDED TRUCK FOR $1. MAY HAVE CONTRACT REFORMED BY DELETING TRUCK THEREFROM. ORDINARILY WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT DEEMED SUFFICIENT TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID: HOWEVER. GAO AGREES WITH ADMINISTRATIVE POSITION THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE. UNDER CIRCUMSTANCES WHERE NEXT HIGH BID WAS $388. TRUCK'S CURRENT MARKET APPRAISAL WAS $400 AND CONTRACTING OFFICER ACTUALLY DID SUSPECT ERROR BUT MISTAKENLY FAILED TO VERIFY. WHICH WAS LISTED AS A USED STEP VAN TRUCK DESCRIBED AS BEING IN POOR CONDITION AND REQUIRING REPAIRS. 218 BID WAS THE HIGHEST RECEIVED. MEMPHIS WAS AWARDED ITEM 283 AS PART OF SALE CONTRACT NO. 27- 4311-335.

B-181884, AUG 15, 1974

BIDDER, WHO MISTAKENLY SUBMITTED DUPLICATE BIDS OF $1,218 AND $238 ON USED TRUCK IN SURPLUS SALE AND WHO WAS AWARDED TRUCK FOR $1,218, MAY HAVE CONTRACT REFORMED BY DELETING TRUCK THEREFROM. ORDINARILY WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT DEEMED SUFFICIENT TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID: HOWEVER, GAO AGREES WITH ADMINISTRATIVE POSITION THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE, UNDER CIRCUMSTANCES WHERE NEXT HIGH BID WAS $388, TRUCK'S CURRENT MARKET APPRAISAL WAS $400 AND CONTRACTING OFFICER ACTUALLY DID SUSPECT ERROR BUT MISTAKENLY FAILED TO VERIFY.

MEMPHIS EQUIPMENT COMPANY:

PURSUANT TO SALE NO. 27-4311, THE DEFENSE PROPERTY DISPOSAL SERVICE, DEFENSE SUPPLY AGENCY, COLUMBUS, OHIO, INVITED BIDS FOR VARIOUS SURPLUS GOVERNMENT VEHICLES AND VEHICULAR EQUIPMENT. THE MEMPHIS EQUIPMENT COMPANY (MEMPHIS) SUBMITTED BIDS ON 31 DIFFERENT ITEMS, INCLUDING DUPLICATE BIDS ON ITEM 283, WHICH WAS LISTED AS A USED STEP VAN TRUCK DESCRIBED AS BEING IN POOR CONDITION AND REQUIRING REPAIRS, IN THE AMOUNTS OF $1,218 AND $238. INASMUCH AS MEMPHIS' $1,218 BID WAS THE HIGHEST RECEIVED, MEMPHIS WAS AWARDED ITEM 283 AS PART OF SALE CONTRACT NO. 27- 4311-335.

MEMPHIS HAS REQUESTED THAT THIS CONTRACT BE REFORMED BY DELETING ITEM 283, DUE TO A MISTAKE IN ITS BID. MEMPHIS CLAIMS THAT IT INTENDED TO BID $238 FOR ITEM 283 AND THE $1,218 BID WAS INTENDED FOR ITEM 286.

FROM THE RECORD BEFORE US, WE ARE PURSUADED THAT MEMPHIS MADE A BONA FIDE MISTAKE IN BID. HOWEVER, REFORMATION OF THIS CONTRACT CAN ONLY BE ALLOWED, IF THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE THAT MEMPHIS HAD MADE A MISTAKE IN BID. ORDINARILY, A WIDE RANGE OF BID PRICES IN SURPLUS PROPERTY SALES IS NOT DEEMED TO BE SUFFICIENT TO PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR BECAUSE OF THE MANY POSSIBLE USES TO WHICH THE PROPERTY MAY BE PUT. WENDER PRESSES, INC. V. UNITED STATES, 170 CT. CL. 483 (1965); B-174940, APRIL 20, 1972; B-179305, OCTOBER 23, 1973.

HOWEVER, IN THE PRESENT CASE, MEMPHIS' DUPLICATE $1,218 BID FOR ITEM 283 FAR EXCEEDED THE NEXT HIGH BID OF $388.91 AND THE TRUCK'S $400 CURRENT MARKET APPRAISAL. MOREOVER, THE SALES CONTRACTING OFFICER DID, IN FACT, SUSPECT AN ERROR IN MEMPHIS' DUPLICATE BID ON ITEM 283 AND MADE A NOTATION TO ASK MEMPHIS FOR VERIFICATION OF ITS BID PRICE. HOWEVER, DUE TO A CLERICAL ERROR, SUCH VERIFICATION WAS NEVER ACTUALLY REQUESTED. UNDER THESE CIRCUMSTANCES, WE BELIEVE THAT THE SALES CONTRACTING OFFICER WAS ON CONSTRUCTIVE (IF NOT ACTUAL) NOTICE OF A MISTAKE IN MEMPHIS' BID. SEE B- 176123, JULY 3, 1972; B-177167, OCTOBER 30, 1972; B-180673, APRIL 2, 1974; B-180824, APRIL 12, 1974.

ACCORDINGLY, WE AGREE WITH THE ADMINISTRATIVE RECOMMENDATION THAT THIS CONTRACT BE REFORMED BY DELETING ITEM 283 THEREFROM, WITHOUT LIABILITY TO MEMPHIS.