B-127297, MAR. 30, 1956

B-127297, MAR. 30, 1956

TO THE HONORABLE, THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED MARCH 12, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (LOGISTICS) RELATIVE TO AN ALLEGED ERROR IN A BID DATED NOVEMBER 23, 1955, SUBMITTED BY THE FRAMINGHAM SHOE CO. ON A SALE OF GOVERNMENT-OWNED SURPLUS PROPERTY, ON WHICH CONTRACT NO. DA/S) 41-133 AIV- O.I. NO. 64 DATED NOVEMBER 23, 1955, WAS BASED.

THE SALE WAS ON AN "AS IS" BASIS WITH AN EXPRESS DISCLAIMER OF WARRANTY, AMONG OTHER THINGS, AS TO QUALITY OR DESCRIPTION, OR FITNESS FOR ANY USE OR PURPOSE. THE BIDDERS WERE INFORMED THAT THE SALE WAS NOT BY SAMPLE AND THEY WERE WARNED THAT NO CLAIM WOULD BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED. A TOTAL OF 88 ITEMS WERE OFFERED FOR SALE, BY LOT ONLY, AND WERE DESCRIBED GENERALLY BY THE HEADING OR CAPTION ON THE SCHEDULE AS "SALVAGE AND UNECONOMICAL REPARABLE FOR FURTHER ARMY USE.' BIDDERS WERE INVITED AND URGED TO INSPECT THE PROPERTY PRIOR TO SUBMITTING BIDS. THEY WERE ALSO INFORMED THAT FAILURE TO INSPECT WOULD CONSTITUTE NO GROUND FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

ITEM NO. 12 COVERED 56 PAIRS OF WOMEN'S LOW SHOES, ASSORTED SIZES (PUBLISHED ESTIMATED ACQUISITION COST $252). THE COMPANY BID $84 ($1.50 PER PAIR). THE EIGHT OTHER BIDS RANGED FROM $1.16 TO $0.28 PER PAIR.

ITEM NO. 14 COVERED 277 PAIRS OF MEN'S LOW TAN SHOES, ASSORTED SIZES (PUBLISHED ACQUISITION COST $1,375.30). THE COMPANY BID $664.80 ($2.40 PER PAIR). THE 23 OTHER BIDS RANGED FROM $1.37 TO $0.16 PER PAIR.

ITEM NO. 35 COVERED 331 PAIRS OF LEATHER COMBAT BOOTS, ASSORTED SIZES (PUBLISHED ACQUISITION COST $2,118.40). THE COMPANY BID $910.25 ($2.75 PER PAIR). THE 14 OTHER BIDS RANGED FROM $1.383 TO $0.26851 PER PAIR.

ITEM NO. 41 COVERED 560 PAIRS OF MEN'S LEATHER COMBAT BOOTS, ASSORTED SIZES (PUBLISHED ACQUISITION COST $3,584). THE COMPANY BID $1,540 ($2.75 PER PAIR). THE 17 OTHER BIDS RANGED FROM $1.20 TO $0.19841 PER PAIR.

ITEM NO. 48 COVERED 200 PARIS OF MEN'S LEATHER COMBAT BOOTS IN ASSORTED SIZES (PUBLISHED ACQUISITION COST $1,280). THE COMPANY BID $550 ($2.75 PER PAIR). THE 18 OTHER BIDS RECEIVED FOR THIS LOT RANGED FROM $1,273 TO $0.46 PER PAIR.

THE ABOVE FIVE ITEMS WERE AWARDED ON DECEMBER 1, 1955, TO THE COMPANY AT THE TOTAL CONTRACT PRICE OF $3,749.05. THE COMPANY BY TELEPHONE CONVERSATION ON DECEMBER 2, 1955, AND BY CONFIRMING LETTER OF DECEMBER 5, 1955, ADVISED THAT IT HAD MADE A MISTAKE IN THAT IT OVERLOOKED THE ADVICE THAT THE ITEMS WERE SALVAGE AND ECONOMICALLY NOT REPARABLE AND CONSEQUENTLY ITS BID PRICES WERE BASED ON THE BELIEF THAT THE SHOES AND BOOTS INVOLVED WERE NEW, NOT USED. THEREFORE, INASMUCH AS IT DID NOT DEAL IN "USED" SHOES IT RETURNED THE CONTRACT AND REQUESTED PERMISSION TO WITHDRAW ITS BID. IT FURNISHED A SWORN STATEMENT OF THE VICE PRESIDENT OF THE FIRST NATIONAL BANK OF BOSTON TO SUPPORT THE COMPANY'S CONTENTION THAT IT DID NOT DEAL IN USED MERCHANDISE.

THE BASIC QUESTION FOR DETERMINATION IS NOT WHETHER THE CONTRACTOR MADE A MISTAKE IN ITS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE THEREOF. WHILE IT MAY BE SEEN THAT THERE IS A SUBSTANTIAL VARIANCE BETWEEN THE CONTRACTOR'S BIDS AND THE OTHER BIDS RECEIVED ON THE FIVE ITEMS, SUCH VARIANCE IS NOT NECESSARILY UNUSUAL, SINCE IN A SALVAGE SALE OF GOVERNMENT-OWNED SURPLUS PROPERTY THERE MIGHT BE EXPECTED A WIDE RANGE IN THE BIDS WHICH WOULD BE BASED MORE OR LESS ON THE USE TO WHICH THE PROPERTY WAS INTENDED TO BE PUT BY THE PARTICULAR BIDDER OR THE CHANCE OF RESALE THEREOF. IN OTHER WORDS, A MERE DIFFERENCE IN THE PRICES BID FOR SURPLUS PROPERTY SUCH AS HERE INVOLVED, PARTICULARLY WHEN SOLD BY LOT, WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 598; 17 ID. 388; ID. 601; ID. 976; AND 28 ID. 550. APPARENTLY THE CONTRACTING OFFICER DID NOT NOTICE OR SUSPECT ANY ERROR IN THE BID PRIOR TO HIS ACCEPTANCE THEREOF. THERE WAS NOTHING APPEARING ON THE FACE OF THE BID TO INDICATE THAT THE BID WAS NOT AS INTENDED, OR TO JUSTIFY THE CONCLUSION, UNDER THE CIRCUMSTANCES, THAT THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED ERROR THEREIN. THE ITEMS WERE EXACTLY DESCRIBED. WHILE THE CONTRACTOR'S BID PRICES WERE CONSIDERABLY HIGHER THAN THE OTHERS RECEIVED, THEY NEVERTHELESS WERE SUBSTANTIALLY LESS THAN THE PUBLISHED ACQUISITION COST OF THE ITEMS, AND IN THE LIGHT OF THE WIDE RANGE OF OTHER BIDS THEY DO NOT APPEAR TO BE WHOLLY OUT OF LINE. THE ACCEPTANCE OF THE BID IN GOOD FAITH AND WITHOUT NOTICE OF THE ERROR SUBSEQUENTLY ALLEGED CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. SEE 16 COMP. GEN. 596, SUPRA.

THE INVITATION FOR BIDS AND THE COMPANY'S BID IN RESPONSE THERETO WERE SPECIFIC, CLEAR AND UNAMBIGUOUS. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID WAS UPON THE COMPANY, NOT THE GOVERNMENT. EITHER ORDINARY CARE IN READING THE INVITATION, OR INSPECTION OF THE PROPERTY FOR SALE, WOULD HAVE DISCLOSED AT ONCE THAT THE SHOES WERE NOT NEW AND UNUSED. THE COMPANY WAS CAUTIONED AS TO THE IMPORTANCE OF AN INSPECTION PRIOR TO SUBMITTING A BID. IF IT CHOSE TO ASSUME THE RISK OF BIDDING WITHOUT INSPECTING, AS IT APPARENTLY DID, OF COURSE IT WAS ENTITLED TO DO SO. HOWEVER, ANY ERROR RESULTING FROM SUCH ACTION MUST BE ASCRIBED SOLELY TO ITS OWN LACK OF PROPER CARE AND WAS NOT INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. UNDER THE CIRCUMSTANCES, ANY ERROR THAT WAS MADE, BASED UPON THE ALLEGED ERRONEOUS ASSUMPTION THAT THE SHOES WERE UNUSED, WAS UNILATERAL, NOT MUTUAL, AND THEREFORE DOES NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

ACCORDINGLY, THERE IS FOUND IN THE PRESENT RECORD NO LEGAL BASIS FOR RELEASING THE FRAMINGHAM SHOE CO. FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF JANUARY 3, 1956, AND THE CONTRACTOR'S LETTER DATED DECEMBER 5, 1955, WITH ATTACHMENT, ARE RETURNED.