B-183135, MAR 21, 1975

B-183135: Mar 21, 1975

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WHERE BID FOR USED VEHICLE WAS MORE THAN 36 PERCENT HIGHER THAN NEXT HIGH BID ON THE SAME ITEM. THE SALES CONTRACT MAY BE RESCINDED SINCE THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD. JR.: THIS DECISION IS IN RESPONSE TO A LETTER DATED JANUARY 30. KALINEC'S BID WAS OVER 36 PERCENT HIGHER THAN THE NEXT HIGH BID FOR ITEM 205 AND MORE COMPARABLE WITH BIDS RECEIVED FOR ITEM 204. (3) THE PREDETERMINED FAIR MARKET VALUE OF THE VEHICLE ESTIMATED BY THE GOVERNMENT 4 MONTHS PRIOR TO THE SALE WAS $1. ITEMS SOLD AT SURPLUS SALES ARE SPECIALTY ITEMS NOT NORMALLY SOLD IN THE COMMERCIAL MARKET AND WITHOUT A SET VALUE. HAS FOLLOWED THE RULE THAT WIDE VARIANCE IN THE BID PRICES QUOTED FOR A SURPLUS PROPERTY SALE ORDINARILY IS NOT SUFFICIENT TO PLACE A CONTRACTING OFFICER ON NOTICE OF A MISTAKE.

B-183135, MAR 21, 1975

WHERE BID FOR USED VEHICLE WAS MORE THAN 36 PERCENT HIGHER THAN NEXT HIGH BID ON THE SAME ITEM, THE SALES CONTRACT MAY BE RESCINDED SINCE THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR AND BID SHOULD HAVE BEEN VERIFIED PRIOR TO AWARD.

MISTAKE IN BID ALLEGED BY JOE F. KALINEC, JR.:

THIS DECISION IS IN RESPONSE TO A LETTER DATED JANUARY 30, 1975, WITH ENCLOSURES, FROM THE GENERAL SERVICES ADMINISTRATION, RECOMMENDING RECISION OF SURPLUS SALES CONTRACT NO. GS-07-DPS)-50041, AWARDED TO JOE F. KALINEC, JR., FOR A 1970 USED CHEVROLET SEDAN AT A PRICE OF $1,200 UNDER ITEM 205 OF SALES INVITATION NO. 7FWS-75-41.

THE ADMINISTRATIVE FILE DISCLOSES THAT (1) MR. KALINEC CONTENDS HE MISTAKENLY BID ON ITEM 205 INSTEAD OF ITEM 204; (2) MR. KALINEC'S BID WAS OVER 36 PERCENT HIGHER THAN THE NEXT HIGH BID FOR ITEM 205 AND MORE COMPARABLE WITH BIDS RECEIVED FOR ITEM 204, AND (3) THE PREDETERMINED FAIR MARKET VALUE OF THE VEHICLE ESTIMATED BY THE GOVERNMENT 4 MONTHS PRIOR TO THE SALE WAS $1,000.

GENERALLY, ITEMS SOLD AT SURPLUS SALES ARE SPECIALTY ITEMS NOT NORMALLY SOLD IN THE COMMERCIAL MARKET AND WITHOUT A SET VALUE. THIS OFFICE, THEREFORE, HAS FOLLOWED THE RULE THAT WIDE VARIANCE IN THE BID PRICES QUOTED FOR A SURPLUS PROPERTY SALE ORDINARILY IS NOT SUFFICIENT TO PLACE A CONTRACTING OFFICER ON NOTICE OF A MISTAKE. UNITED STATES V. SABIN METAL CORP., 151 F. SUPP. 683 (S.D.N.Y. 1957), AFF'D, 253 F.2D 956 (2D CIR. 1958) AND 17 COMP. GEN. 601 (1938). THIS RULE, HOWEVER, DOES NOT APPLY HERE BECAUSE WE ARE DEALING WITH USED VEHICLES WHICH ARE IN GENERAL SUPPLY AND HAVE A FAIRLY WELL DEFINED MARKET PRICE. ON THE RECORD BEFORE US WE THINK THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF THE ERROR, AND SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD.

ACCORDINGLY, THE SALES CONTRACT MAY BE RESCINDED AS RECOMMENDED.