B-181969, SEP 3, 1974

B-181969: Sep 3, 1974

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881.50 ON SURPLUS SALE ITEM WHEN INTENDED BID WAS $315.26 MAY HAVE CONTRACT AWARDED HIM RESCINDED. ORDINARILY WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT DEEMED SUFFICIENT TO PLACE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID. GAO FINDS THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE WHERE BID WAS 14 TIMES NEXT HIGH BID. WAS THE HIGHEST RECEIVED. THIS ITEM WAS AWARDED TO GROBAN UNDER SALES CONTRACT NO. 31-4203-088. ORDINARILY A WIDE RANGE OF BID PRICES IN SURPLUS PROPERTY SALES IS NOT DEEMED TO BE SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR BECAUSE OF THE MANY POSSIBLE USES TO WHICH THE PROPERTY MAY BE PUT. GROBAN'S BID WAS 14 TIMES THE NEXT HIGH BID OF $22 EACH AND 32 TIMES THE MARKET APPRAISAL OF $9.60 EACH.

B-181969, SEP 3, 1974

BIDDER, WHO MISTAKENLY BID $7,881.50 ON SURPLUS SALE ITEM WHEN INTENDED BID WAS $315.26 MAY HAVE CONTRACT AWARDED HIM RESCINDED. ORDINARILY WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT DEEMED SUFFICIENT TO PLACE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID; HOWEVER, GAO FINDS THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE WHERE BID WAS 14 TIMES NEXT HIGH BID, 32 TIMES MARKET APPRAISAL, AND APPROXIMATELY 50 PERCENT OF ACQUISITION COST FOR ELECTRONIC EQUIPMENT (ROTARY CONVERTERS) WHICH USUALLY BRINGS LOW PERCENTAGE OF ACQUISITION COST.

GROBAN SUPPLY CO., INC.:

PURSUANT TO SALE NO. 31-4203, THE DEFENSE PROPERTY DISPOSAL SERVICE, DEFENSE SUPPLY AGENCY, INVITED BIDS FOR VARIOUS SURPLUS ITEMS. GROBAN SUPPLY COMPANY SUBMITTED BIDS ON VARIOUS ITEMS. HIS BID IN THE AMOUNT OF $7,881.50 ON ITEM 28, WHICH CONSISTED OF 25 ROTARY CONVERTERS, 20 UNUSED AND 5 USED, WAS THE HIGHEST RECEIVED. CONSEQUENTLY, THIS ITEM WAS AWARDED TO GROBAN UNDER SALES CONTRACT NO. 31-4203-088.

GROBAN REQUESTS THAT THIS CONTRACT BE RESCINDED DUE TO A MISTAKE IN ITS BID. ITS PRESIDENT STATED THAT HE HAD INTENDED TO BID $315.26 FOR THE LOT, WHICH WOULD BE ABOUT $12.61 EACH, BUT BY MISTAKE BID $315.26 EACH, OR $7,881.50 FOR THE LOT.

RESCISSION OF THIS CONTRACT CAN ONLY BE ALLOWED IF THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE THAT GROBAN HAD MADE A MISTAKE IN ITS BID. ORDINARILY A WIDE RANGE OF BID PRICES IN SURPLUS PROPERTY SALES IS NOT DEEMED TO BE SUFFICIENT TO PLACE 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, 343 F. 2D 961 (170 CT. CL. 483 (1965)); B-179305, OCTOBER 23, 1973; B-174940, APRIL 20, 1972. HOWEVER, IN THE PRESENT CASE, GROBAN'S BID WAS 14 TIMES THE NEXT HIGH BID OF $22 EACH AND 32 TIMES THE MARKET APPRAISAL OF $9.60 EACH. MOREOVER, EVEN THOUGH THE ITEM CONSISTS OF ELECTRICAL EQUIPMENT, WHICH GENERALLY BRINGS A LOW PERCENTAGE OF ACQUISITION COST, GROBAN'S BID REPRESENTS APPROXIMATELY 50 PERCENT OF THE ACQUISITION COST OF THE PROPERTY. UNDER THESE CIRCUMSTANCES, WE BELIEVE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A MISTAKE IN GROBAN'S BID. 181018, MAY 13, 1974; B-180673, APRIL 2, 1974.

ACCORDINGLY, WE AGREE WITH THE ADMINISTRATIVE RECOMMENDATION THAT THIS CONTRACT BE RESCINDED WITHOUT LIABILITY TO GROBAN.