B-101323, SEP. 30, 1966

B-101323: Sep 30, 1966

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GENERAL SERVICES ADMINISTRATION: REFERENCE IS MADE TO LETTER OF SEPTEMBER 9. THE EXAMPLE CITED OF A BASIS FOR SUSPICION OF ERROR IS THAT THE BID IS SIGNIFICANTLY OUT OF LINE WITH THE NEXT HIGH BID OR WITH THE GOVERNMENT'S ESTIMATE. THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE. WE BELIEVE THAT THE EXAMPLE CITED IN SECTION 101-45.803 (D) (1) AND THE ABOVE PROVISION IN SECTION 101-45.803 (D) (5) ARE NOT APPROPRIATE IN CONNECTION WITH THE SALE OF SURPLUS PERSONAL PROPERTY AND SHOULD BE DELETED.

B-101323, SEP. 30, 1966

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO LETTER OF SEPTEMBER 9, 1966, FROM THE GENERAL COUNSEL, REQUESTING APPROVAL OF THE PROPOSED ADDITION OF SUBPART 101 45.8 TO THE FEDERAL PROPERTY MANAGEMENT REGULATIONS WHICH WOULD EXTEND TO ALL EXECUTIVE AGENCIES HAVING SELLING ACTIVITIES AUTHORITY TO CORRECT MISTAKES IN BIDS IN SALES OF PERSONAL PROPERTY. THE PROPOSED REGULATION PARALLELS FEDERAL PROCUREMENT REGULATIONS SECTION 1-2.406 WHICH PERTAINS TO MISTAKES IN BIDS IN PROCUREMENTS.

SECTION 101-45.803 (D) (1) OF THE PROPOSED ADDITION STATES THAT WHENEVER THE SALES CONTRACTING OFFICER SUSPECTS A MISTAKE IN BID, HE SHALL REQUEST THE BIDDER TO VERIFY THE BID POINTING OUT THE BASIS FOR SUSPICION OF MISTAKE. THE EXAMPLE CITED OF A BASIS FOR SUSPICION OF ERROR IS THAT THE BID IS SIGNIFICANTLY OUT OF LINE WITH THE NEXT HIGH BID OR WITH THE GOVERNMENT'S ESTIMATE. ALSO, SECTION 101-45.803 (D) (5) PROVIDES THAT WHEN A BIDDER FAILS OR REFUSES TO FURNISH EVIDENCE IN SUPPORT OF A SUSPECTED OR ALLEGED MISTAKE, THE CONTRACTING OFFICER SHALL CONSIDER THE BID AS SUBMITTED UNLESS THE AMOUNT OF THE BID IS SO FAR OUT OF LINE WITH THE AMOUNTS OF OTHER BIDS RECEIVED OR WITH THE AMOUNT ESTIMATED BY THE AGENCY OR DETERMINED BY THE CONTRACTING OFFICER TO BE REASONABLE.

WE BELIEVE THAT THE EXAMPLE CITED IN SECTION 101-45.803 (D) (1) AND THE ABOVE PROVISION IN SECTION 101-45.803 (D) (5) ARE NOT APPROPRIATE IN CONNECTION WITH THE SALE OF SURPLUS PERSONAL PROPERTY AND SHOULD BE DELETED. WHILE GENERALLY THE PRINCIPLES APPLICABLE TO GOVERNMENT PROCUREMENT APPLY TO SALES OF SURPLUS PROPERTY, A WIDE VARIANCE BETWEEN THE HIGH BID AND THE NEXT HIGH BID IN A SALE OF GOVERNMENT PROPERTY OR A LARGE DIFFERENCE BETWEEN THE HIGH BID AND THE GOVERNMENT ESTIMATE IS NOT USUALLY REGARDED AS NOTICE OF ERROR IN THE HIGH BID. IN THAT RESPECT, IT WAS STATED IN 17 COMP. GEN. 601, 603, AND ADHERED TO IN SUBSEQUENT DECISIONS OF OUR OFFICE:

"THE BIDS HERE IN QUESTION WERE ON USED EQUIPMENT AND MATERIALS NO LONGER FIT FOR SERVICE AS DISTINGUISHED FROM BIDS FOR THE PERFORMANCE OF WORK, FOR THE FURNISHING OF SUPPLIES, EQUIPMENT, ETC. CONSEQUENTLY, THERE MIGHT BE EXPECTED A WIDE RANGE IN THE BIDS WHICH WOULD BE BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY WAS TO BE PUT BY THE PARTICULAR BIDDER OR THE CHANCE OF RESALE THEREOF. THE MERE DIFFERENCE IN THE PRICES BID FOR SUCH PROPERTY WOULD NOT NECESSARILY PUT THE CONTRACTING OFFICER ON NOTICE OF A MISTAKE AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED FOR FURNISHING NEW EQUIPMENT OR SUPPLIES TO BE PURCHASED BY THE GOVERNMENT.' SEE, ALSO, UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, AFFIRMED 253 F.2D 956.

WE HAVE NO OBJECTION TO THE REMAINDER OF THE PROPOSED REGULATION AND OUR APPROVAL IS GIVEN TO THAT PORTION.

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