B-172961, JUL 6, 1971

B-172961: Jul 6, 1971

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TO GENERAL HEDLUND: REFERENCE IS MADE TO LETTER DATED MAY 13. REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY AMSCO PARTS MANUFACTURING COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 21-1105-367 IS BASED. WHOSE TOTAL COST WAS STATED TO BE $5. THE CURRENT MARKET APPRAISAL ESTABLISHED FOR ITEM 44 WAS $600. THE BID OF AMSCO WAS ACCEPTED AS TO ITEM 44 ON MARCH 9. THE CORPORATION STATED THAT IN COPYING ITS BID PRICE FROM ITS WORKSHEET THE NUMERAL 1 IN THE DOLLAR SIGN WAS MISTAKEN AS THE FIRST NUMERAL OF ITS BID PRICE FOR ITEM 44. THAT THE TAILGATES ARE THE ONLY THINGS OF VALUE TO THE FIRM. THAT THE LIST PRICE OF A TAILGATE IS SHOWN IN ITS JEEP CATALOG AS BEING $12.50.

B-172961, JUL 6, 1971

CONTRACTS - SURPLUS PROPERTY - MISTAKE DECISION CONCERNING ERROR ALLEGEDLY MADE BY AMSCO PARTS MANUFACTURING COMPANY IN ITS BID FOR THE PURCHASE OF VARIOUS ITEMS UNDER A SALES CONTRACT INVITATION ISSUED BY THE DEFENSE SURPLUS SALES OFFICE. SINCE NO MISTAKE APPEARED ON THE FACE OF THE BID, THE MERE DIFFERENCE IN THE PRICES OF BIDS WOULD NOT PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID ON SURPLUS PROPERTY. THEREFORE, ACCEPTANCE OF THE AMSCO BID FORMED A BINDING CONTRACT AND RELIEF MUST BE DENIED.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTER DATED MAY 13, 1971, YOUR REFERENCE DSAH G, WITH ENCLOSURES, FROM THE ASSISTANT COUNSEL, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY AMSCO PARTS MANUFACTURING COMPANY TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 21-1105-367 IS BASED.

THE DEFENSE SURPLUS SALES OFFICE, FOREST PARK, GEORGIA, BY INVITATION NO. 21-1105 REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS, INCLUDING ITEM 44 DESCRIBED AS ONE LOT OF VEHICULAR EQUIPMENT COMPONENTS, CONSISTING OF 243 TAILGATES AND 128 CARBURETORS, UNUSED, IN GOOD CONDITION, WHOSE TOTAL COST WAS STATED TO BE $5,992. THE CURRENT MARKET APPRAISAL ESTABLISHED FOR ITEM 44 WAS $600. IN RESPONSE, AMSCO PARTS MANUFACTURING COMPANY SUBMITTED A BID DATED FEBRUARY 26, 1971, OFFERING TO PURCHASE THE COMPONENTS UNDER ITEM 44 AT A LOT PRICE OF $1,836.36. THE BID OF AMSCO WAS ACCEPTED AS TO ITEM 44 ON MARCH 9, 1971.

BY LETTER DATED MARCH 15, 1971, AMSCO ADVISED THE SALES OFFICE THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM 44 IN THAT IT HAD INTENDED TO QUOTE A LOT PRICE OF $836.36 INSTEAD OF $1,836.36 FOR THAT ITEM. THE CORPORATION STATED THAT IN COPYING ITS BID PRICE FROM ITS WORKSHEET THE NUMERAL 1 IN THE DOLLAR SIGN WAS MISTAKEN AS THE FIRST NUMERAL OF ITS BID PRICE FOR ITEM 44; THAT THE TAILGATES ARE THE ONLY THINGS OF VALUE TO THE FIRM; THAT THE LIST PRICE OF A TAILGATE IS SHOWN IN ITS JEEP CATALOG AS BEING $12.50; AND THAT THERE WAS A SUBSTANTIAL DIFFERENCE BETWEEN ITS BID PRICE FOR ITEM 44 AND THE BID PRICE QUOTED BY THE NEXT HIGHEST BIDDER ON THAT ITEM. THE CORPORATION REQUESTED THAT THE CONTRACT PRICE OF ITEM 44 BE CHANGED TO READ $836.36, ITS INTENDED BID PRICE.

THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY AMSCO TO INDICATE THAT THE PRICE QUOTED THEREIN FOR ITEM 44 WAS NOT AS INTENDED. THE SEVEN OTHER BIDS ON ITEM 44 RANGED FROM $656.21 TO $28. ALTHOUGH THE BID OF AMSCO WAS SIGNIFICANTLY HIGHER THAN THE NEXT HIGHEST BID RECEIVED ON ITEM 44, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY, AS BIDDERS MAY BE EXPECTED TO PLACE A WIDE RANGE OF VALUES ON SURPLUS PROPERTY BASED ON INDIVIDUAL NEEDS OR OPPORTUNITIES FOR USE OR RESALE. IN VIEW OF THE WIDE RANGE OF BID PRICES ORDINARILY RECEIVED FOR SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. SEE UNITED STATES V SABIN METAL CORPORATION, 151 F. SUPP. 683 (1957), AFFIRMED 253 F. 2D 956 (1958), CITING WITH APPROVAL 16 COMP. GEN. 596 (1936) AND ID. 601 (1936). SEE, ALSO, B- 160226, APRIL 26, 1967, AND B 168258, DECEMBER 9, 1969.

IN THE SABIN CASE, THE PRICE DISPARITY IN BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. PAGE 688, THE COURT SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER."

SEE, ALSO, WENDER PRESSES, INC. V UNITED STATES, 343 F. 2D 961 (1965).

IN VIEW OF THE FOREGOING, AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES.

ACCORDINGLY, WE FIND NO LEGAL BASIS FOR GRANTING ANY RELIEF IN THE MATTER.

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