B-143515, SEP. 26, 1960

B-143515, SEP. 26, 1960

TO WESTERN NON-FERROUS METALS CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED SEPTEMBER 12, 1960, ADVISING THAT YOU WOULD GREATLY APPRECIATE A REVIEW OF OUR DECISION DATED JULY 22, 1960, TO THE SECRETARY OF THE NAVY, WHEREIN WE FOUND NO LEGAL BASIS FOR CANCELING ITEM NO. 17 FROM CONTRACT NO. N228S-45058 IN VIEW OF AN ERROR ALLEGED TO HAVE BEEN MADE IN YOUR BID UPON WHICH THE CONTRACT WAS AWARDED.

WHILE YOU COMMENT RATHER EXTENSIVELY IN YOUR LETTER AS TO THE PROCEDURES FOLLOWED AND REQUIREMENTS INSISTED UPON BY GOVERNMENT OFFICIALS IN CONDUCTING THE SPOT BID SALE, THE BASIC CONTENTION ADVANCED BY YOU FOR FURTHER CONSIDERATION IS THAT THE GOVERNMENT CONTRACTING OFFICER SHOULD BE CHARGED WITH CONSTRUCTIVE NOTICE OF THE ERROR ALLEGEDLY MADE IN YOUR BID. YOU POINT OUT THAT THERE WERE A NUMBER OF ITEMS OF IDENTICAL NATURE ON THE SAME BID--- ITEMS NOS. 17 THROUGH 25--- AND THAT AN ANALYSIS OF THE HIGH BIDS ON ALL SUCH ITEMS SHOWS THE SUBSTANTIAL DISPARITY BETWEEN THE ACTUAL VALUE OF THE MATERIAL AND YOUR ERRONEOUS BID.

THE FACTS PERTAINING TO THE MATTER WERE SET FORTH IN DETAIL IN OUR DECISION DATED JULY 22, 1960, ABOVE REFERRED TO, AND SINCE THE DECISION HAS BEEN BROUGHT TO YOUR ATTENTION SUCH FACTS NEED NOT BE REPEATED HERE.

IN THE ABSENCE OF SOME PARTICULARLY UNIQUE CIRCUMSTANCES ATTENDING THE RANGE OF THE HIGH BIDS RECEIVED ON ITEMS NOS. 17 THROUGH 25, IT MUST BE REITERATED THAT SUCH PRICES THEMSELVES MAY NOT BE ACCEPTED AS BEING INDICATIVE OF PROBABLE ERROR IN YOUR BID IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON SALES OF WASTE, SALVAGE AND SURPLUS PROPERTY. FURTHERMORE, THE POSSIBILITY OF A GOVERNMENT CONTRACTING OFFICER DETECTING ERRORS IN BIDS ON SPOT BID SALES IS LIMITED BY THE FACT THAT SUCH BIDS GENERALLY ARE COLLECTED, REVIEWED IMMEDIATELY, AND THE HIGH BIDDER ANNOUNCED ON THE SPOT. THE AWARDS ARE TYPED OUT PROMPTLY THEREAFTER WITH NO OPPORTUNITY FOR THE CONTRACTING OFFICER TO PREPARE AN ABSTRACT OF BIDS FOR ANALYSIS PRIOR TO AWARD. CONSEQUENTLY, THERE IS NO INDICATION AS TO WHETHER A BIDDER'S PRICE IS OUT OF LINE WITH THE PRICES SUBMITTED BY THE OTHER BIDDERS. IT IS BELIEVED YOU CAN UNDERSTAND THE GOVERNMENT FOLLOWING SUCH A PROCEDURE WHEN THE SALE IS ONE OF A SPOT BID NATURE.

IN VIEW OF THE FOREGOING, AND FOR THE REASONS STATED IN OUR PRIOR DECISION DATED JULY 22, 1960, TO THE SECRETARY OF THE NAVY, WE FIND NOTHING TO WARRANT ANY MODIFICATION OF OUR PREVIOUS DETERMINATION THAT THERE IS NO LEGAL BASIS FOR CANCELING ITEM NO. 17 FROM THE CONTRACT.