B-182946, JAN 24, 1975

B-182946, JAN 24, 1975

SALES CONTRACT MAY BE RESCINDED AFTER AWARD WHERE BIDS WERE 1-1/2 TIMES HIGHER, AND OFTEN AS MUCH AS 30 TIMES HIGHER, THAN THE NEXT HIGHEST BID AND BIDS WERE 1-1/2 TIMES HIGHER, AND OFTEN AS MUCH AS 18 TIMES HIGHER, THAN THE FAIR MARKET VALUE ESTABLISHED FOR EACH ITEM SINCE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR AND BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD.

GUARDIOLA USED AUTO PARTS:

ON JULY 23, 1974, BIDS WERE OPENED UNDER INVITATION FOR BIDS NO. 7FWS 75- 2 ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR THE SALE OF SURPLUS PERSONAL PROPERTY. MR. GUARDIOLA OF GUARDIOLA USED AUTO PARTS (GUARDIOLA) BID ON 16 LINE ITEMS OF VARIOUS TYPES OF OFFICE ELECTRICAL AND MEDICAL EQUIPMENT. ON JULY 29, 1974, THE CONTRACT FOR ITEMS 22-26, 29-34 AND 36 WAS AWARDED TO GUARDIOLA.

ON JULY 30, 1974, GUARDIOLA NOTIFIED GSA THAT IT HAD MADE A MISTAKE IN BID. GUARDIOLA INDICATED THAT IT HAD INTENDED TO BID ON USED AUTOMOBILES ADVERTISED IN INVITATION NO. 7FWS-75-4 AND THAT IT HAD MISTAKENLY USED THE ITEM NUMBERS FOR INVITATION NO. 7FWS-75-4 ON THE BID SHEET FOR INVITATION NO. 7FWS-75-2 AND BELIEVED IT WAS BIDDING ON USED AUTOMOBILES. ITS STATEMENT IS SUPPORTED BY THE INVITATION TO BID 7FWS-75-4 BOOKLET WHICH IS MARKED WITH BID PRICES AT THE PROPER ITEM NUMBERS. ALSO, IT IS REASONABLE TO ASSUME THAT GUARDIOLA WOULD MORE LIKELY BE BIDDING ON USED AUTOMOBILES AS ADVERTISED IN INVITATION NO. 7FWS-75-4 RATHER THAN ON USED OFFICE EQUIPMENT AND MEDICAL SUPPLIES ADVERTISED IN INVITATION NO. 7FWS-75-2.

THE RECORD SHOWS THAT OF THE THREE HIGH BIDS RECEIVED ON EACH ITEM, GUARDIOLA'S BIDS WERE AT LEAST 1-1/2 TIMES HIGHER, OFTEN AS MUCH AS 30 TIMES HIGHER, THAN THE NEXT HIGHEST BIDS FOR THE ITEMS. FURTHERMORE, GUARDIOLA'S BIDS WERE ALL AT LEAST 1-1/2 TIMES HIGHER, OFTEN AS MUCH AS 18 TIMES HIGHER, THAN THE FAIR MARKET VALUE ESTABLISHED FOR EACH ITEM. THE BIDS RECEIVED FROM GUARDIOLA WERE MORE IN LINE WITH THE BIDS RECEIVED FOR THE SAME ITEM NUMBERS ON INVITATION NO. 7FWS-75-4 FOR USED AUTOMOBILES.

CONSIDERING THE TYPE OF EQUIPMENT INVOLVED IN THIS CASE, ITS AGE AND POOR CONDITION, THE GREAT DISPARITY BETWEEN GUARDIOLA'S BIDS AND THE NEXT TWO HIGHEST BIDDERS, THE DISPARITY BETWEEN GUARDIOLA'S BIDS AND THE FAIR MARKET VALUE OF EACH ITEM, AND THE FACT THAT THE NAME OF THE FIRM CLEARLY INDICATES THAT THE BIDS WERE ON PROPERTY UNRELATED TO ITS BUSINESS, IT MAY BE CONCLUDED THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR IN THE GUARDIOLA BID.

ACCORDINGLY, SINCE BID VERIFICATION WAS NOT REQUESTED PRIOR TO AWARD, THE SALES CONTRACT MAY BE RESCINDED AS ADMINISTRATIVELY RECOMMENDED. 179315, AUGUST 17, 1973; MATTER OF MITCHELL MACHINE WORKS, INC., B 181622, JULY 17, 1974.