B-174940, APR 20, 1972

B-174940, APR 20, 1972

SURPLUS SALES CONTRACT - ALLEGED ERROR IN BID - REQUEST FOR RECISSION DECISION DENYING A REQUEST OF J. J. CANDEE CO., INC., FOR RECISSION OF A SALES CONTRACT AWARDED BY THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIF., DUE TO AN ALLEGED ERROR IN BID. IT APPEARS THAT THE ALLEGED ERROR RESULTED FROM THE BIDDER'S FAILURE TO NOTICE ITS OBLIGATION UNDER THE INVITATION TO LOAD THE PROPERTY. FURTHER, IT HAS FAILED TO SUPPORT ITS CONTENTION THAT IT WAS SHOWN THE WRONG ITEM. IN VIEW OF THE FOREGOING, AND SINCE THE BID PRICE WAS NOT SUFFICIENT TO PUT THE CONTRACTING OFFICER ON NOTICE OF THE ALLEGED MISTAKE, THE REQUEST FOR RECISSION IS DENIED.

TO J. J. CANDEE CO. INC.:

REFERENCE IS MADE TO YOUR LETTER OF JANUARY 5, 1972, WITH ENCLOSURES, REQUESTING RELIEF IN CONNECTION WITH AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID UPON WHICH SALES CONTRACT NO. 46-1141-014 IS BASED.

THE DEFENSE SURPLUS SALES OFFICE, SAN DIEGO, CALIFORNIA, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF SCRAP RUBBER, TEXTILES AND BATTERIES, INCLUDING ITEM 11 WHICH WAS DESCRIBED AS FOLLOWS:

"11. ELECTRICAL AND ELECTRONICS, SCRAP: INCLUDING INSTRUMENT PANELS, CHASSIS CABINETS, TEST UNITS, CONNECTORS, RELAY SWITCHES AND OTHER PARTS; WITH FOREIGN MATTER AND ATTACHMENTS, FERROUS AND NON FERROUS METALS, PAPER, RUBBER, AND PLASTICS. OUTSIDE (RANDBURG WASH) - CRATED AND UNPACKED

30,000 POUND

ARTICLE BF: RADIOACTIVE MATERIAL

APPLIES"

PROSPECTIVE BIDDERS WERE ADVISED THAT UNDER THE LOADING TABLE, SET OUT IN THE INVITATION, THE PURCHASER OF ITEM 11 MUST LOAD THE EQUIPMENT AND THAT NO ASSISTANCE WOULD BE FURNISHED BY THE GOVERNMENT. BIDS WERE OPENED ON JUNE 10, 1971, AND IT APPEARS THAT YOUR FIRM OFFERED TO PURCHASE THE SCRAP UNDER ITEM 11 AT A UNIT PRICE OF $0.0516 PER POUND. YOUR TOTAL BID OF $1,548 ON ITEM 11 WAS ACCOMPANIED BY A $600 BID DEPOSIT. YOUR FIRM WAS AWARDED A CONTRACT ON JUNE 14, 1971, WITH A REMOVAL DATE OF DECEMBER 7, 1971, ON THE BASIS OF YOUR HIGH BID ON ITEM 11. WE ARE ADVISED THAT THE MATERIAL DESCRIBED BY ITEM 11 HAS NOT BEEN REMOVED.

IN A LETTER DATED AUGUST 19, 1971, TO THE SALES CONTRACTING OFFICER, YOU REQUESTED CANCELLATION OF THE CONTRACT AND THE RETURN OF THE BID DEPOSIT. YOU STATED THAT YOUR FIRM HAD NOT NOTICED THE REQUIREMENT IN THE SALES INVITATION THAT THE PURCHASER OF ITEM 11 MUST LOAD THE MATERIAL WITH NO ASSISTANCE FURNISHED BY THE GOVERNMENT. YOU ALSO CLAIMED THAT YOU HAD BEEN SHOWN THE WRONG ITEM BY THE HOLDING ACTIVITY. BY LETTER DATED AUGUST 26, 1971, THE CONTRACTING OFFICER REQUESTED THAT YOU IDENTIFY THE HOLDING ACTIVITY PERSONNEL WHO SHOWED YOU THE MATERIAL AND DESCRIBED THE MATERIAL INSPECTED BY YOU. BY LETTER DATED AUGUST 31, 1971, YOU STATED THAT YOU WERE AT CHINA LAKE, CALIFORNIA, WHERE ITEM 11 WAS LOCATED, TO ATTEND AN AUCTION SALE CONDUCTED BEFORE THE DATE SET FOR BID OPENING UNDER THE SUBJECT INVITATION; THAT YOU INSPECTED CERTAIN MATERIAL AT THAT TIME; BUT THAT THE WRONG MATERIAL WAS SHOWN TO YOU BY A GOVERNMENT REPRESENTATIVE. HOWEVER, YOU DID NOT IDENTIFY THE GOVERNMENT REPRESENTATIVE WHO HAD SHOWN YOU THE PROPERTY NOR DID YOU DESCRIBE THE PROPERTY YOU HAD INSPECTED.

IN A STATEMENT DATED OCTOBER 8, 1971, THE PROPERTY DISPOSAL OFFICER, MR. PEACOCK, ADVISED THAT PRIOR TO BEING REQUESTED TO IDENTIFY THE GOVERNMENT PERSONNEL ALLEGED TO HAVE SHOWN YOU THE SCRAP IN QUESTION, YOU INQUIRED BY PHONE AS TO THE MAKEUP OF ITEM 11 IN ORDER TO DETERMINE THE TYPE OF TRUCKS NEEDED FOR REMOVAL. IN THAT CONVERSATION, YOU REPORTEDLY ACKNOWLEDGED THAT YOU PERSONALLY HAD NOT INSPECTED THE PROPERTY PRIOR TO BIDDING. MR. PEACOCK'S STATEMENT POINTED OUT THAT RECORDS AT CHINA LAKE REFLECTED THAT NO PROPERTY HAD BEEN INSPECTED ON MAY 25, 1971, THE DATE OF THE AUCTION SALE, EVEN THOUGH THE INSTANT INVITATION REQUIRED THAT AN APPOINTMENT BE MADE FOR INSPECTION AND IT IS REPORTED THAT A RECORD OF THOSE REQUESTING AN OPPORTUNITY TO INSPECT IS CUSTOMARILY KEPT. THE DEFENSE LOGISTICS SERVICES CENTER STATES THAT ON OCTOBER 22, 1971, A DETERMINATION WAS MADE THAT RESCISSION OF THE CONTRACT WOULD NOT BE PROPER.

BY LETTER DATED NOVEMBER 8, 1971, YOU AGAIN STATED THAT YOU HAD BEEN MISLED BY PERSONNEL AT CHINA LAKE INTO BIDDING FOR THE WRONG ITEM AND AGAIN REQUESTED THE REFUND OF ALL MONIES PAID. ON NOVEMBER 23, 1971, THE DEFENSE LOGISTICS SERVICES CENTER REQUESTED THAT YOU SUBMIT AN AFFIDAVIT IDENTIFYING THE GOVERNMENT REPRESENTATIVE WHO HAD SHOWN THE PROPERTY TO YOU. IT IS REPORTED THAT ON DECEMBER 2, 1971, YOU REPLIED THAT YOU COULD NOT IDENTIFY THE INDIVIDUAL AT CHINA LAKE. THE CONTRACTING OFFICER CONCLUDES THEREFORE THAT THERE IS NO EVIDENCE THAT YOUR FIRM WAS SHOWN THE WRONG MATERIAL BY PERSONNEL AT THE PROPERTY DISPOSAL OFFICE.

PAGE 7 OF THE INVITATION CONTAINED THE LOADING TABLES FOR THE 28 ITEMS WHICH WERE SOLD. THE LOADING TABLE CLEARLY INDICATES THAT THE PURCHASER OF ITEM 11 IS REQUIRED TO LOAD THE MATERIAL WITH NO ASSISTANCE FURNISHED BY THE GOVERNMENT. SEVEN BIDS WERE RECEIVED ON ITEM 11 RANGING FROM A LOW BID OF $0.005219 TO A HIGH BID IN THE AMOUNT OF $0.0516. THE SECOND HIGH BID WAS $0.03339 AND THE CURRENT MARKET APPRAISAL WHICH HAD BEEN ESTABLISHED PRIOR TO BID OPENING WAS $0.045 PER POUND. UNDER THE CIRCUMSTANCES OF THIS CASE, IT APPEARS THAT TO THE EXTENT AN ERROR WAS MADE BY YOUR FIRM IN BIDDING ON ITEM 11, IT RESULTED FROM YOUR FAILURE TO RECOGNIZE THAT IT WAS THE PURCHASER'S OBLIGATION TO LOAD THE PROPERTY. FURTHER, WE CONCLUDE THAT THE RECORD FAILS TO SUPPORT YOUR CONTENTION THAT YOUR FIRM WAS SHOWN THE WRONG ITEM OR THAT ANY PROPERTY WAS INSPECTED BY YOU BEFORE SUBMISSION OF YOUR BID.

OUR OFFICE WILL GRANT APPROPRIATE RELIEF, SUCH AS RESCISSION, WITHOUT LIABILITY TO A CONTRACTOR, WHERE A MISTAKE HAS BEEN ALLEGED SUBSEQUENT TO THE AWARD OF THE CONTRACT, IF THE CONTRACTING OFFICER WAS ON ACTUAL OR CONSTRUCTIVE NOTICE OF THE ERROR PRIOR TO AWARD. WE DO NOT BELIEVE THAT THE CIRCUMSTANCES IN THIS CASE SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF A MISTAKE IN BID. OUR OFFICE HAS HELD THAT A WIDE RANGE OF BID PRICES IN SURPLUS SALES IS NOT ORDINARILY CONSIDERED TO BE SUFFICIENT TO PLACE A CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF THE POSSIBILITY OF ERROR BECAUSE THE PRICES OFFERED DEPEND TO A GREAT EXTENT UPON THE USES TO WHICH THE PROPERTY WILL BE PUT, OR UPON THE RISK OF RESALE WHICH THE BIDDER MAY BE WILLING TO TAKE. SEE B-173841, OCTOBER 18, 1971, AND CASES CITED THEREIN. ITEM 11, CONSISTS OF A HETEROGENEOUS GROUPING OF SCRAP MATERIAL WHICH CONTAINS VARIOUS PARTS AND COMPONENTS SOME OF WHICH MAY BE USABLE TO SOME BIDDERS FOR USES OTHER THAN SCRAP. YOUR BID ON ITEM 11 OF $0.0516 PER POUND, WHEN COMPARED WITH THE SECOND HIGH BID OF $0.03339 PER POUND AND THE CURRENT MARKET APPRAISAL OF $0.045 PER POUND, WAS NOT SO LARGE AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF A MISTAKE IN YOUR BID. SEE B- 174616, FEBRUARY 14, 1972; B-173905, SEPTEMBER 9, 1971.

ACCORDINGLY, YOUR REQUEST THAT THE SUBJECT CONTRACT BE RESCINDED IS DENIED.