B-126626, FEB. 2, 1956

B-126626, FEB. 2, 1956

TO THE HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 11, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL) REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN IN VIEW OF THE CONTRACTOR'S ALLEGATION OF ERROR CONCERNING A BID DATED OCTOBER 27, 1955, SUBMITTED BY EAST BAY IRON AND METAL CO. ON WHICH CONTRACT NO. N228S-12879 DATED NOVEMBER 4, 1955, WAS BASED.

BY INVITATION NO. B-102-56 THERE WERE OFFERED FOR SALE VARIOUS ITEMS OF GOVERNMENT-OWNED SURPLUS PLUMBING SUPPLIES LOCATED AT THE SUPPLY CENTER, OAKLAND, CALIFORNIA. ITEM NO. 22B COVERED 2,747 LONG, BRASS, THREADED, STANDARD WEIGHT NIPPLES, IPS 2 INCH, 4 1/2 INCH L, ON WHICH THE COMPANY BID A PRICE OF $0.7021 EACH. ITEM NO. 22DCOVERED 1,955 NIPPLES OF THE SAME KIND AND DESCRIPTION AS THOSE IN ITEM 22B, ON WHICH IT BID $0.7021 EACH. THESE TWO ITEMS WERE AWARDED TO THE COMPANY ON NOVEMBER 4, 1955.

BY LETTER OF NOVEMBER 10, 1955, THE COMPANY ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID IN THAT, IN TRANSPORTING THE BID FROM THE ORIGINAL WORKSHEET TO THE BID FORM, ITS TYPIST INSERTED THE PRICE OF $0.7021 EACH FOR EACH ITEM WHEREAS ITS INTENDED BID FOR EACH ITEM WAS ONLY $0.4021 EACH. A PHOTOSTATIC COPY OF A DOCUMENT, WHICH PURPORTS TO BE THE APPLICABLE PAGE FROM ITS ORIGINAL BID COPY OR WORKSHEET, WAS FURNISHED APPARENTLY FOR THE PURPOSE OF SUBSTANTIATING ITS ALLEGATION OF ERROR. THE BASIS OF THE FOREGOING, THE CONTRACTOR REQUESTED AN ADJUSTMENT SO THAT THE CONTRACT PRICE WILL CONFORM WITH ITS ALLEGED INTENDED PRICE OF $0.4021 FOR EACH ITEM, OR A CANCELLATION OF THE CONTRACT AND A REFUND OF $3,301.28, THE PURCHASE PRICE OF THE TWO ITEMS.

BY LETTER OF NOVEMBER 17, 1955, THE CONTRACTING OFFICER ADVISED THE CONTRACTOR THAT ITS CLAIM FOR A PRICE ADJUSTMENT OR RESCISSION OF THE CONTRACT COULD NOT BE ALLOWED. THEREAFTER, BY LETTER OF NOVEMBER 21, 1955, THE CONTRACTOR OFFERED A MORE DETAILED EXPLANATION IN SUPPORT OF ITS ALLEGATION OF ERROR AND INTENDED BID PRICE OF $0.4021. WE THINK THE CONTENTS OF THE CONTRACTOR'S SECOND LETTER, HOWEVER, DO NOT PRESENT ANY SOUND BASIS FOR THE REQUESTED RELIEF.

THE BASIC QUESTION IS NOT WHETHER THE CONTRACTOR MADE A MISTAKE BUT WHETHER A VALID AND BINDING CONTRACT RESULTED FROM THE ACCEPTANCE OF ITS BID AS TO ITEMS NOS. 22B AND 22D. THERE IS NOTHING ON THE FACE OF THE BID TO INDICATE THAT IT WAS NOT AS INTENDED. THE ABSTRACT OF BIDS SHOWS THAT THE ELEVEN OTHER BIDS ON ITEM NO. 22B RANGED FROM $0.402 TO $0.065 EACH AND THAT THE NINE OTHER BIDS ON ITEM NO. 22D RANGED FROM $0.402 TO $0.06. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON 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 FROM THE GOVERNMENT AS WOULD A LIKE DIFFERENCE IN PRICES QUOTED FOR NEW EQUIPMENT OR SUPPLIES, TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 601; ID. 976; AND 28 ID. 550.

THE PRESENT RECORD SHOWS THAT THE ACCEPTANCE OF THE COMPANY'S BID WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. THE ACCEPTANCE OF THE BID, IN THE CIRCUMSTANCES, 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.

ACCORDINGLY, THERE IS FOUND IN THE PRESENT RECORD NO LEGAL BASIS FOR RELEASING THE EAST BAY IRON AND METAL CO. FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT.