B-182652, DEC 16, 1974

B-182652: Dec 16, 1974

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EVEN THOUGH WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT ORDINARILY DEEMED SUFFICIENT TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID. ADMINISTRATIVE POSITION IS CORRECT THAT UNDER CIRCUMSTANCES WHERE BIDDER MISTAKENLY BID ON WRONG CONTRACT AND HIS BID PRICE OF $641 ON USED TRUCK WAS MORE THAN TWICE NEXT HIGH BID AND NEARLY THREE TIMES CURRENT MARKET VALUE OF ITEM. CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND CONTRACT MAY BE RESCINDED. 2. SINCE RECORD ESTABLISHES THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR. ROBERT CLAYTON EVANS BE RESCINDED ON THE GROUNDS THAT HIS BID ON ONE ITEM WAS MORE THAN TWICE THE NEXT HIGH BID AND NEARLY THREE TIMES THE CURRENT MARKET VALUE OF THE ITEM.

B-182652, DEC 16, 1974

1. EVEN THOUGH WIDE RANGE OF BID PRICES IN SURPLUS SALE IS NOT ORDINARILY DEEMED SUFFICIENT TO PUT CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF MISTAKE IN BID, ADMINISTRATIVE POSITION IS CORRECT THAT UNDER CIRCUMSTANCES WHERE BIDDER MISTAKENLY BID ON WRONG CONTRACT AND HIS BID PRICE OF $641 ON USED TRUCK WAS MORE THAN TWICE NEXT HIGH BID AND NEARLY THREE TIMES CURRENT MARKET VALUE OF ITEM, CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND CONTRACT MAY BE RESCINDED. 2. WHERE BID PRICE OF $451 FOR FOUR TRUCK TIRES EXCEEDED ACQUISITION COST OF $136 AND CURRENT MARKET VALUE OF $20, SALES CONTRACT MAY BE RESCINDED, SINCE RECORD ESTABLISHES THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR.

ROBERT CLAYTON EVANS:

BY LETTER DATED NOVEMBER 7, 1974, THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY (DSA), IN CONCURRENCE WITH THE DEFENSE PROPERTY DISPOSAL SERVICE (DPDS) RECOMMENDED THAT SALES CONTRACT NO. 27-5059-094, AWARDED TO MR. ROBERT CLAYTON EVANS BE RESCINDED ON THE GROUNDS THAT HIS BID ON ONE ITEM WAS MORE THAN TWICE THE NEXT HIGH BID AND NEARLY THREE TIMES THE CURRENT MARKET VALUE OF THE ITEM, AND THAT HIS BID ON ANOTHER ITEM EXCEEDED THE ACQUISITION COST OF THE PROPERTY.

PURSUANT TO SALE NO. 27-5059, THE DEFENSE PROPERTY DISPOSAL SERVICE, DEFENSE SUPPLY AGENCY, COLUMBUS, OHIO, INVITED BIDS FOR VARIOUS SURPLUS GOVERNMENT VEHICLES AND VEHICULAR EQUIPMENT. ITEM 41, A 1966 1/2 TON PICKUP TRUCK; ITEM 172, 4 TRUCK TIRES; AND ITEM 173, A 1969 1/2 TON PICKUP TRUCK, WERE OFFERED FOR SALE. MR. EVANS SUBMITTED A BID OF $641 FOR ITEM 41. FIFTEEN OTHER BIDS RANGING FROM $301 TO $10 WERE RECEIVED ON THIS ITEM. THE CURRENT MARKET APPRAISAL OF THE ITEM WAS $220. MR. EVANS' BID FOR THE FOUR TRUCK TIRES UNDER ITEM 172 WAS $451. THE LISTED ACQUISITION COST FOR THE TIRES WAS $136 AND THE CURRENT MARKET APPRAISAL WAS $20. HIS BID FOR THE PICKUP TRUCK UNDER ITEM 173 WAS $673. ADMINISTRATIVE OFFICIALS HAVE DETERMINED THAT THERE IS NO BASIS TO SUSPECT AN ERROR AS TO THIS ITEM.

ON SEPTEMBER 24, 1974, THE CONTRACT FOR THE THREE ITEMS WAS AWARDED TO MR. EVANS. BY LETTER OF SEPTEMBER 28, 1974, MR. EVANS ALLEGED A MISTAKE IN BID, STATING THAT HE DID NOT INTEND TO BID ON SALE NO. 27 5059, BUT THAT HE HAD INTENDED TO BID ON SALE NO. 31-5048.

ALTHOUGH IT APPEARS FROM THE RECORD THAT MR. EVANS MADE A BONA FIDE MISTAKE IN BID, RECISSION OF THIS CONTRACT CAN ONLY BE ALLOWED IF THE CONTRACTING OFFICER HAD ACTUAL OR CONSTRUCTIVE NOTICE OF A POTENTIAL ERROR. BY MEMORANDUM DATED OCTOBER 7, 1974, THE CONTRACTING OFFICER STATES THAT HE WAS NOT ON NOTICE OF A MISTAKE IN BID PRIOR TO AWARD. 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, THE RECORD IN THE PRESENT CASE INDICATES THAT MR. EVANS' BID OF $641 FOR ITEM 41 WAS MORE THAN TWICE THE NEXT HIGH BID OF $301, AND WAS NEARLY THREE TIMES THE $220 MARKET VALUE OF THE ITEM. UNDER THESE CIRCUMSTANCES, WE BELIEVE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF A MISTAKE IN BID AS TO ITEM 41 AND THAT HE SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD. SEE B-176835, OCTOBER 4, 1972; MATTER OF A & H TRUCK SALES, B-180824, APRIL 12, 1974; MATTER OF MEMPHIS EQUIPMENT COMPANY, B-181884, AUGUST 15, 1974.

WITH RESPECT TO ITEM 172, OUR OFFICE HAS OBSERVED THAT A BID MORE THAN 88 PERCENT OF THE ACQUISITION COST IS SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. B-157656, SEPTEMBER 23, 1965; B-174423, NOVEMBER 26, 1971. SINCE THE EVANS' BID OF $451 FOR ITEM 172 EXCEEDED THE ITEM'S ACQUISITION COST OF $136 BY 232 PERCENT, IT MUST BE CONCLUDED THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF POSSIBLE ERROR IN THIS BID, AND SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD. SEE B-176123, JULY 3, 1972, AND MATTER OF WINSOR METAL PRODUCTS, B-180187, JANUARY 29, 1974.

WITH RESPECT TO ITEM 173, WE ACCEPT THE ADMINISTRATIVE DETERMINATION THAT ALTHOUGH "*** THERE IS NO SUBSTANTIAL DISPARITY OR OTHER BASIS TO SUSPECT AN ERROR AS TO ITEM 173, IT IS APPARENT THAT HAD THE BIDS FOR ITEMS 41 AND 172 BEEN VERIFIED AS REQUIRED, THE FACT THAT THERE WAS NO INTENT TO BID FOR ANY PROPERTY ON SALE 27-5059 WOULD HAVE BEEN ASCERTAINED."

IN THE CIRCUMSTANCES, WE AGREE WITH DPDS AND THE ASSISTANT COUNSEL FOR DSA THAT THE EVANS' BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD.

ACCORDINGLY, CONTRACT NO. 27-5059-094 MAY BE CANCELED WITHOUT LIABILITY TO MR. EVANS, AS ADMINISTRATIVELY RECOMMENDED.