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B-131641, JUN. 12, 1957

B-131641 Jun 12, 1957
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INC.: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 9. REQUIRING FULL PAYMENT FOR THE PROPERTY PRIOR TO ITS REMOVAL BY THE SUCCESSFUL BIDDER WHICH WAS TO BE MADE WITHIN 15 CALENDAR DAYS AFTER NOTICE OF AWARD. UNTIL ALL ITEMS WERE REMOVED. YOUR BID WAS ACCOMPANIED BY A BID GUARANTEE DEPOSIT OF $375. ON THE SAME DAY YOUR BID ON THESE ITEMS WAS ACCEPTED. THIS ALLEGATION OF ERROR WAS CONFIRMED BY YOUR COMPANY. YOU HAVE "JUNK" DRUMS UNDER ITEMS NOS. 46 THROUGH 51 BUT HAD INTENDED TO BID ON THE "GOOD" DRUMS UNDER ITEMS NOS. 42. YOU ADMITTED THAT THE ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID WAS ENTIRELY YOURS. - AND THAT THE GOVERNMENT WAS IN NO WAY RESPONSIBLE. YOU WERE ADVISED THAT YOU HAD THE ALTERNATIVE OF EITHER CARRYING OUT THE SALE IN ACCORDANCE WITH THE TERMS OF THE CONTRACT AWARDED TO YOU AND THEN FILING CLAIM IN WRITING FOR "REBATE.

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B-131641, JUN. 12, 1957

TO EVANS COOPERAGE COMPANY, INC.:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 9, 1957, REQUESTING REVIEW OF YOUR CLAIM BASED ON AN ALLEGED ERROR IN YOUR BID WHICH, UPON ACCEPTANCE, BECAME CONTRACT NO. DA/S/-41-117-AIV-2250, DATED MAY 9, 1956, AND RECONSIDERATION OF THE MATTER OF YOUR INDEBTEDNESS RESULTING FROM YOUR DEFAULT UNDER THE CONTRACT. IN EFFECT, YOU REQUEST THAT THE CONTRACT BE CANCELLED AND YOUR BID DEPOSIT BE REFUNDED.

THE SALVAGE BRANCH, RED RIVER ARSENAL, DEPARTMENT OF THE ARMY, TEXARKANA, TEXAS, BY INVITATION NO. 4-117-S-56-24, DATED APRIL 17, 1956, REQUESTED BIDS--- TO BE OPENED AT 11 A.M. ON MAY 8, 1956--- FOR THE PURCHASE FROM THE GOVERNMENT OF 90 ITEMS OF SURPLUS PROPERTY. THE INVITATION CONTAINED THE USUAL CLAUSES CAUTIONING BIDDERS TO INSPECT THE PROPERTY BEFORE SUBMITTING THEIR BIDS, AND REQUIRING FULL PAYMENT FOR THE PROPERTY PRIOR TO ITS REMOVAL BY THE SUCCESSFUL BIDDER WHICH WAS TO BE MADE WITHIN 15 CALENDAR DAYS AFTER NOTICE OF AWARD. ALSO, THE INVITATION REQUIRED THAT A DEPOSIT OF 20 PERCENT OF THE TOTAL AMOUNT BID MUST ACCOMPANY THE BID. WHEN FAILURE OF THE SUCCESSFUL BIDDER TO COMPLY WITH THE TERMS REGARDING REMOVAL AND PAYMENT FOR THE PROPERTY, THE GOVERNMENT HAD THE RIGHT TO CHARGE THE LOSS, IF ANY, OCCASIONED THEREBY, TO THE DEFAULTING BIDDER, TOGETHER WITH STORAGE CHARGES AT THE RATE OF 1/10 OF ONE PERCENT OF THE PURCHASE PRICE PER CALENDAR DAY, UNTIL ALL ITEMS WERE REMOVED.

IN RESPONSE TO THE INVITATION YOU SUBMITTED A BID, DATED MAY 8, 1956 OFFERING TO PURCHASE ITEMS NOS. 46 TO 51, INCLUSIVE, CONSISTING OF 1,250 DRUMS, FOR $1.50 EACH--- A TOTAL OF $1,875. YOUR BID WAS ACCOMPANIED BY A BID GUARANTEE DEPOSIT OF $375. ON THE SAME DAY YOUR BID ON THESE ITEMS WAS ACCEPTED, CONSUMMATING A CONTRACT NUMBERED DA/S/41-117-AIV-2250.

THE RECORD SHOWS THAT SOMETIME DURING THE WEEK FOLLOWING THE DATE OF NOTICE OF THE AWARD OF SALE TO YOU A REPRESENTATIVE OF YOUR COMPANY VISITED RED RIVER ARSENAL AND, AFTER INSPECTING THE PROPERTY WHICH HAD BEEN SOLD TO YOU UNDER THE ABOVE-CITED CONTRACT, INFORMED THE PROPERTY DISPOSAL OFFICER THAT THE COMPANY HAD MADE AN ERROR IN THAT IT HAD NOT INTENDED TO BID ON ITEMS NOS. 46 THROUGH 51--- DESCRIBED ON PAGE 10 OF THE INVITATION AS "DRUMS, STEEL, OPEN END, USED, APPROXIMATELY 55 GALLON CAPACITY, WITH DRAIN HOLES IN BOTTOM AND/OR SIDE. ESTIMATED ACQUISITION COST $3.75 EACH.' RATHER, IT HAD INTENDED TO BID ON ITEMS NOS. 42, 43 AND 44--- ALSO LISTED ON PAGE 10 OF THE INVITATION--- DESCRIBED AS FOLLOWS:

"42. DRUMS, STEEL, CLOSED END, USED, APPROXIMATELY 55 GALLON CAPACITY. ESTIMATED ACQUISITION COST $4.75 EACH.

"43. SAME AS ITEM 42.

"44. DRUMS, STEEL, OPEN END, USED, APPROXIMATELY 55 GALLON CAPACITY. ESTIMATED ACQUISITION COST $3.75 EACH.'

WITH 100 UNITS IN EACH ITEM. SUBSEQUENTLY, IN TELEPHONE CALLS TO THE CONTRACTING OFFICER ON MAY 22 AND JUNE 19, AND IN LETTER OF JUNE 19, 1956, THIS ALLEGATION OF ERROR WAS CONFIRMED BY YOUR COMPANY, IT BEING EXPLAINED THAT YOUR SECRETARY HAD INADVERTENTLY PLACED YOUR PRICE QUOTATIONS OPPOSITE ITEMS NOS. 46 THROUGH 51. YOU HAVE "JUNK" DRUMS UNDER ITEMS NOS. 46 THROUGH 51 BUT HAD INTENDED TO BID ON THE "GOOD" DRUMS UNDER ITEMS NOS. 42, 43 AND 44, AND THAT YOU HAD NO USE FOR THE 1,250 STEEL DRUMS WITH HOLES IN THEM. YOU ADMITTED THAT THE ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID WAS ENTIRELY YOURS--- DUE SOLELY TO YOUR CARELESSNESS OR OVERSIGHT--- AND THAT THE GOVERNMENT WAS IN NO WAY RESPONSIBLE.

AS EARLY AS MAY 22, 1956, AND REPEATEDLY THEREAFTER, YOU WERE ADVISED THAT YOU HAD THE ALTERNATIVE OF EITHER CARRYING OUT THE SALE IN ACCORDANCE WITH THE TERMS OF THE CONTRACT AWARDED TO YOU AND THEN FILING CLAIM IN WRITING FOR "REBATE," OR DEFAULTING ON THE CONTRACT AND ASSUMING LIABILITY FOR THE DIFFERENCE BETWEEN ANY RESALE PRICE RECEIVED AND YOUR BID PRICE PLUS ANY ACCUMULATED STORAGE CHARGES AND OTHER COSTS INCURRED FOR YOUR ACCOUNT. IN LETTER OF JUNE 7, 1956, YOU WERE ADVISED THAT, AS NONE OF THE MATERIALS PURCHASED BY YOU UNDER THIS CONTRACT HAD BEEN REMOVED, STORAGE CHARGES HAD BEEN ACCUMULATING AT THE RATE OF $1.88 PER DAY SINCE MAY 27, 1956, AND THAT THERE WAS A BALANCE OF $1,500 IN ADDITION TO THE ACCUMULATED STORAGE CHARGES DUE ON THIS PURCHASE WHICH WOULD HAVE TO BE PAID BEFORE PICKING UP THE MATERIAL. FINALLY, BY LETTER OF JUNE 22, 1956, YOU WERE GIVEN UNTIL JUNE 29, 1956, TO ADVISE THE PROPERTY DISPOSAL OFFICER OF RED RIVER ARSENAL OF YOUR DECISION. DUE TO YOUR FAILURE TO SO ADVISE THE PROPERTY DISPOSAL OFFICER OR TO REMOVE THE MATERIAL BY JUNE 29, 1956, THE ARSENAL HAD NO OPTION EXCEPT TO PROCEED UNDER THE TERMS OF THE CONTRACT AND RESELL THE DRUMS. ACCORDINGLY, THE MATERIALS SOLD TO YOU WERE OFFERED FOR RESALE AS ITEMS NOS. 66 THROUGH 71, ON INVITATION TO BID NO. 41-117-S-57-1, DATED JULY 3, 1956--- BIDS TO BE OPENED ON JULY 24, 1956--- AND YOU WERE GIVEN NOTICE OF THE RESALE. BY LETTER OF JULY 24, 1956, YOU WERE ADVISED THAT THE HIGH BID ON THESE DRUMS WHEN RESOLD WAS $0.62 EACH--- A TOTAL OF $775 FOR THE 1,250 DRUMS, AND YOU WERE CALLED UPON TO MAKE REMITTANCE OF $788.92 AS THE BALANCE YOU OWED THE GOVERNMENT AS A RESULT OF YOUR DEFAULT ON YOUR CONTRACT. A STATEMENT OF YOUR ACCOUNT WAS FURNISHED YOU IN OUR OFFICE LETTER OF FEBRUARY 19, 1957.

THE RESPONSIBILITY FOR THE PREPARATION OF A BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF AN ERROR WAS MADE IN THE PREPARATION OF YOUR BID, AS ALLEGED, IT PROPERLY MAY BE ATTRIBUTED SOLELY TO YOUR NEGLIGENCE OR OVERSIGHT, AND SINCE THE ERROR WAS UNILATERAL, NOT MUTUAL, YOU ARE NOT ENTITLED TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 248, 259; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE PRIMARY QUESTION FOR CONSIDERATION IS NOT WHETHER AN ERROR WAS MADE BUT WHETHER A VALID CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF YOUR BID. IT IS WELL ESTABLISHED THAT THE ACCEPTANCE OF A BID CONSUMMATES A VALID AND BINDING CONTRACT UNLESS THE OFFICER ACCEPTING IT WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH. SEE IN THIS REGARD 28 COMP. GEN. 550, 551.

WITH REGARD TO YOUR CONTENTION THAT THE MISTAKE WAS SO OBVIOUS THAT NO BINDING CONTRACT WAS FORMED, THE CONTRACTING OFFICER REPORTED THAT YOUR BID PRICE OF $1.50 FOR EACH DRUM DID NOT APPEAR EXCESSIVE, CONSIDERING THAT THE GOVERNMENT'S ACQUISITION COST WAS $3.75 AND THAT THE DRUMS WERE IN A USABLE CONDITION--- NOT JUNK, AS YOU CONTENDED; THAT SIMILAR DRUMS, WITH HOLES, WERE BEING SOLD FOR USE AS TRASH CANS, FOR $2.50 EACH; AND THAT THERE WAS NOTHING ON THE FACE OF THE BID TO MAKE HIM SUSPECT THAT YOUR BID WAS NOT INTENDED FOR LOTS NOS. 46 THROUGH 51, OR TO PUT HIM ON NOTICE OTHERWISE OF ANY PROBABILITY OF ERROR.

THE DESCRIPTIONS IN THE INVITATION OF THE PROPERTY TO BE SOLD UNDER LOTS NOS. 46 THROUGH 51--- ON WHICH YOU BID--- AND OF LOTS NOS. 42, 43, AND 44- -- ON WHICH YOU CONTEND YOU INTENDED TO BID--- WERE CLEAR AND UNAMBIGUOUS AND LEFT NO DOUBT AS TO WHAT WAS OFFERED FOR SALE UNDER EACH LOT. THE BID WAS REGULAR ON ITS FACE. THE VARIANCE BETWEEN YOUR BID PRICE AND OTHER BIDS ON THE STEEL DRUMS UNDER ITEMS NOS. 46 THROUGH 51 WAS NOT SO GREAT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF PROBABILITY OF ERROR AS BIDDERS MAY BE EXPECTED TO PLACE A WIDE RANGE OF VALUES ON SURPLUS PROPERTY BASED ON INDIVIDUAL NEEDS OR OPPORTUNITIES FOR RESALE. SINCE YOU DID NOT ALLEGE ERROR UNTIL AFTER AWARD OF THE CONTRACT AND SINCE IT DOES NOT APPEAR THAT THE CONTRACTING OFFICER HAD ANY REASON FOR SUCH SUSPICION OF ERROR AS WOULD REQUIRE HIM TO REQUEST VERIFICATION OF YOUR BID, THE ACCEPTANCE OF YOUR BID WAS MADE IN GOOD FAITH. ACCORDINGLY, SUCH ACCEPTANCE CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313, AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

THE CONTRACT VESTED IN THE GOVERNMENT THE RIGHT TO HAVE PERFORMANCE IN STRICT ACCORDANCE WITH THE TERMS OF THE ACCEPTED BID AND NO OFFICER OF THE GOVERNMENT HAS AUTHORITY TO GIVE AWAY OR SURRENDER ANY RIGHT VESTED IN THE GOVERNMENT OR ACQUIRED BY IT UNDER A CONTRACT. SEE UNITED STATES V. AMERICAN SALES CORPORATION, 27 F.2D 389, AFFIRMED 32 F.2D 141, AND CERTIORARI DENIED, 28 U.S. 574; BAUSCH AND LOMB OPTICAL COMPANY V. UNITED STATES, 78 C.CLS. 584, 607, CERTIORARI DENIED, 292U.S. 645; AND PACIFIC HARDWARE AND STEEL COMPANY V. UNITED STATES, 49 C.CLS. 327, 335.

WE ARE UNABLE TO FIND ANY LEGAL BASIS FOR RELIEVING YOU FROM YOUR OBLIGATION UNDER CONTRACT NO. DA/S/-41-117-AIV-2250, AND THE ACTION TAKEN IN OUR LETTER TO YOU DATED FEBRUARY 19, 1957, IN DEMANDING PAYMENT OF $788.92 IS AFFIRMED.

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