B-182388, NOV 25, 1974

B-182388: Nov 25, 1974

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WAS MORE THAN TWELVE HIGHER THAN CURRENT MARKET VALUE. WAS WELL ABOVE VALUE FOR SIMILAR PROPERTY FROM PAST SALES EXPERIENCE. SALES CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR IN BID ALLEGED AFTER AWARD. SINCE NO VERIFICATION OF HIGH BID WAS REQUESTED OR MADE. THERE IS NO OBJECTION TO REFORMATION OF CONTRACT TO EXTENT OF NEXT HIGH BID. CITY IRON AND METAL COMPANY: INVITATION FOR BIDS (IFB) NO. 31-4298 WAS ISSUED BY THE DEFENSE PROPERTY DISPOSAL REGION (DPDR) FOR THE SALE OF 129 ITEMS OF SCRAP METAL. ONE OF WHICH WAS ITEM 128. 160.90 WAS ACCEPTED AND A CONTRACT AWARDED TO IT ON MAY 9. REMOVAL OF THE BATTERIES WAS EFFECTED ON JUNE 7. IN THAT ITS PRICE OF $0.575 PER POUND SHOULD HAVE BEEN $0.0575 PER POUND WITH A TOTAL BID PRICE OF $1.

B-182388, NOV 25, 1974

WHERE HIGH BIDDER'S PRICE FOR SCRAP METAL OFFERED FOR SALE BY DEFENSE SUPPLY AGENCY EXCEEDED NEXT HIGH BID BY TEN TIMES, WAS MORE THAN TWELVE HIGHER THAN CURRENT MARKET VALUE, AND WAS WELL ABOVE VALUE FOR SIMILAR PROPERTY FROM PAST SALES EXPERIENCE, SALES CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR IN BID ALLEGED AFTER AWARD. SINCE NO VERIFICATION OF HIGH BID WAS REQUESTED OR MADE, THERE IS NO OBJECTION TO REFORMATION OF CONTRACT TO EXTENT OF NEXT HIGH BID.

CITY IRON AND METAL COMPANY:

INVITATION FOR BIDS (IFB) NO. 31-4298 WAS ISSUED BY THE DEFENSE PROPERTY DISPOSAL REGION (DPDR) FOR THE SALE OF 129 ITEMS OF SCRAP METAL. CITY IRON AND METAL COMPANY (CITY IRON) SUBMITTED A BID FOR TWO OF THE ITEMS, ONE OF WHICH WAS ITEM 128, CONSISTING OF 15, 932 POUNDS OF SCRAP LEAD BATTERIES. CITY IRON'S HIGH BID OF $0.575 PER POUND WITH A TOTAL BID PRICE OF $9,160.90 WAS ACCEPTED AND A CONTRACT AWARDED TO IT ON MAY 9, 1974. REMOVAL OF THE BATTERIES WAS EFFECTED ON JUNE 7, 1974.

SUBSEQUENTLY, BY LETTER OF JUNE 13, 1974, CITY IRON NOTIFIED DPDR THAT IT HAD MADE A MISTAKE IN ITS BID FOR ITEM 128, IN THAT ITS PRICE OF $0.575 PER POUND SHOULD HAVE BEEN $0.0575 PER POUND WITH A TOTAL BID PRICE OF $1,146.55. CITY IRON REQUESTS A REFUND OF ITS OVERPAYMENT IN THE AMOUNT OF $8,014.35.

A REVIEW OF THE ABSTRACT OF BIDS INDICATES THAT THE NEXT HIGH BID FOR THE ITEM WAS $0.069 PER POUND AND THE CURRENT MARKET APPRAISAL WAS $0.044 PER POUND. MOREOVER, PAST SALES EXPERIENCE FOR SIMILAR PROPERTY OFFERED FOR SALE ESTABLISHED THE RANGE OF THE PROPERTY VALUE TO BE FROM $0.0416 TO $0.0879 PER POUND.

IN VIEW OF THE FACT THAT CITY IRON'S BID WAS NEARLY TEN TIMES AS HIGH AS THE NEXT LOW BID, WAS MORE THAN TWELVE TIMES HIGHER THAN THE CURRENT MARKET PRICE, AND WAS WELL ABOVE THE VALUE FOR SIMILAR PROPERTY FROM PAST SALES EXPERIENCE, WE BELIEVE THE RECORD ADEQUATELY ESTABLISHES THE EXISTENCE OF A MISTAKE IN CITY IRON'S BID PRICE FOR ITEM 128 OF WHICH THE SALES CONTRACTING OFFICER HAD CONSTRUCTIVE NOTICE PRIOR TO AWARD. ACCORDINGLY, SINCE NO VERIFICATION OF CITY IRON'S BID WAS REQUESTED OR MADE, OUR OFFICE WILL NOT OBJECT TO REFORMATION OF THE CONTRACT PRICE TO THE EXTENT OF THE NEXT HIGH BID AT $0.069 PER POUND, AS ADMINISTRATIVELY RECOMMENDED. SEE MATTER OF BARSTOW TRUCK PARTS AND EQUIPMENT COMPANY, INC., B-180869, MAY 21, 1974.