B-183329, MAR 26, 1975

B-183329, MAR 26, 1975

SINCE BID UNDER SALES IFB WAS 3-1/2 TIMES HIGHER THAN NEXT HIGH BID AND 4 TIMES HIGHER THAN CURRENT MARKET PRICE, CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID, AND VERIFICATION OF BID PRICE SHOULD HAVE BEEN REQUESTED PRIOR TO AWARD, THERE IS NO LEGAL OBJECTION TO RECOMMENDATION BY AGENCY THAT CONTRACT BE RESCINDED.

L & R SURPLUS, INC.:

SALES INVITATION FOR BIDS (IFB) NO. 7FWS-75-61 WAS ISSUED BY THE GENERAL SERVICES ADMINISTRATION (GSA) FOR THE SALE OF 96 ITEMS OF MISCELLANEOUS PROPERTY LOCATED IN VARIOUS PLACES IN TEXAS AND OKLAHOMA. BIDS WERE OPENED ON JANUARY 15, 1975.

ITEM 9 OF THE IFB CONSISTED OF A USED AMBULANCE WITH LOOSE PARTS, A SMALL GENERATOR, AND A SPRING-TOOTH HARROW, ALL OF WHICH WERE REPORTED TO BE IN VERY POOR CONDITION. L & R SURPLUS, INC. (L&R), SAN ANTONIO, TEXAS, SUBMITTED THE HIGH BID FOR ITEM 9 IN THE AMOUNT OF $1,057 AND RECEIVED AWARD. SUBSEQUENTLY, L&R INFORMED THE CONTRACTING OFFICER THAT IT HAD MADE A MISTAKE IN ITS BID. THE COMPANY STATED THAT IT HAD INTENDED TO BID $1,057 FOR ITEM 8, BUT HAD INADVERTENTLY LISTED ITEM 9 ON ITS BID SCHEDULE. L&R, THEREFORE, REQUESTS RELIEF FROM ITS OBLIGATION TO PURCHASE ITEM 9 AT THE EXCESSIVE AND ERRONEOUS PRICE SUBMITTED IN ITS BID.

THE CONTRACTING OFFICER STATED IN HIS REPORT THAT IN RECHECKING THE ABSTRACT OF BIDS RECEIVED, IT WAS NOTICED THAT L&R'S BID WAS MORE IN LINE WITH THE OTHER BIDS RECEIVED FOR ITEM 8, WHICH CONSISTED OF SCRAP GENERATORS, LIFTERS AND OTHER ELECTRICAL EQUIPMENT. IT WAS ALSO ESTABLISHED THAT L&R'S BID FOR ITEM 9 WAS 3-1/2 TIMES HIGHER THAN THE NEXT LOW BID AT $288.88 FOR ITEM 9, AND 4 TIMES HIGHER THAN THE CURRENT MARKET PRICE AT $225.00. NO VERIFICATION OF L&R'S BID WAS REQUESTED. COUNSEL FOR GSA HAS CONCLUDED THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF ERROR IN THE L&R BID AND SHOULD HAVE VERIFIED THE BID PRICE PRIOR TO AWARD. ON THIS BASIS, GSA THEREFORE RECOMMENDS RESCISSION OF THE CONTRACT.

UNDER THE CIRCUMSTANCES, WE AGREE WITH COUNSEL FOR GSA. WHILE VARIATIONS IN BIDS WOULD NOT ORDINARILY BE SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR, THE GREAT DISPARITY BETWEEN THE BID PRICE OF L&R, THE MARKET VALUE, AND THE NEXT HIGH BID WAS SUFFICIENT TO RAISE SOME DOUBT AS TO THE ACCURACY OF THE BID AND REQUIRE VERIFICATION.

ACCORDINGLY, WE FIND NO LEGAL OBJECTION TO RESCISSION OF THE CONTRACT. SEE MATTER OF KENT LUNDT, B-182640, JANUARY 16, 1975, MATTER OF A.H. TRUCK SALES, B-180824, APRIL 12, 1974.