B-140214, AUG. 2, 1963

B-140214, AUG. 2, 1963

TO A AND B SURPLUS COMPANY:

REFERENCE IS MADE TO A LETTER DATED APRIL 24, 1963, WITH ENCLOSURE, FROM MR. IRWIN M. ROSENTHAL, REQUESTING, IN YOUR BEHALF, A FURTHER REVIEW OF THE MATTER OF YOUR INDEBTEDNESS TO THE UNITED STATES IN THE REVISED AMOUNT OF $3,656 RESULTING FROM YOUR DEFAULT UNDER A CONTRACT WITH THE DEPARTMENT OF THE ARMY WHEREBY YOU AGREED TO PURCHASE TWO ITEMS OF GOVERNMENT SURPLUS PROPERTY--- COVERING A TOTAL OF 70,000 SUPPRESSORS--- FOR A TOTAL AMOUNT OF $4,702 UNDER SPOT BID SALE INVITATION NO. 15-010-S-59-14, ISSUED ON APRIL 15, 1959, BY THE LEXINGTON SIGNAL DEPOT, LEXINGTON, KENTUCKY.

THE INDEBTEDNESS WAS CONSIDERED AND AFFIRMED IN OUR DECISIONS DATED AUGUST 5, 1959, TO THE SECRETARY OF THE ARMY, AND SEPTEMBER 12, 1960, AND NOVEMBER 26, 1962, TO YOU. THE MATTER ALSO WAS THE SUBJECT OF A DECISION DATED OCTOBER 23, 1961, OF THE ARMED SERVICES BOARD OF CONTRACT APPEALS. THE SOLE ISSUE IN THE CASE, AS HERETOFORE COMPLETELY CONSIDERED, IS WHETHER THE GOVERNMENT CONTRACTING OFFICER WAS ON NOTICE OF THE PROBABILITY OF AN ERROR IN YOUR BID AT THE TIME OF ITS ACCEPTANCE. IT IS THE CONTENTION OF MR. ROSENTHAL THAT SUCH NOTICE SHOULD BE CHARGED TO THE CONTRACTING OFFICER. MR. ROSENTHAL NOW POINTS OUT THAT INVITATION NO. 15- 010-S-59-14 SET FORTH THE COST OF THE SUPPRESSORS COVERED BY ITEMS NOS. 38 AND 39 AT $0.50 EACH, WHEREAS THE COST OF THE EXACT SAME SUPPLIES ON PREVIOUS SALES WAS SHOWN AS $0.10 EACH, AND THAT THE CONTRACTING OFFICER HAD STATED THAT IF HE HAD REALIZED THAT THE COST ACTUALLY WAS ONLY $0.10 EACH, INSTEAD OF $0.50, AS SHOWN, HE IMMEDIATELY WOULD HAVE NOTIFIED YOU THAT AN ERROR APPARENTLY HAD BEEN MADE IN YOUR RESPECTIVE BIDS OF $0.0636 AND $0.0686 EACH FOR THESE ITEMS. A FURTHER REPORT WAS REQUESTED AND RECEIVED FROM THE DEFENSE SUPPLY AGENCY IN REGARD TO MR. ROSENTHAL'S CONTENTIONS.

INFORMATION SET FORTH IN THE REPORT SHOWS THAT THE $0.50 UNIT ACQUISITION COST SET FORTH FOR ITEMS NOS. 38 AND 39 WAS TAKEN FROM THE DOCUMENT ON WHICH THESE ITEMS WERE TRANSFERRED TO THE PROPERTY DISPOSAL OFFICER; ALSO, THAT THE CURRENT PRICING GUIDE LISTS A COST OF $0.50 EACH FOR THE ITEMS. THE REPORT ALSO SHOWS THAT INFORMATION RECEIVED FROM THE U.S. ARMY ELECTRONICS MATERIEL AGENCY, PHILADELPHIA, PENNSYLVANIA, INDICATES THAT DURING 1958 AND 1959, ITS PRICING GUIDE LISTED A UNIT COST OF $0.50 FOR THE ITEMS AWARDED. THUS, IT IS SHOWN, AS STATED BY THE DEFENSE SUPPLY AGENCY, THAT THE DESCRIPTIVE INFORMATION PERTAINING TO THE ACTUAL COST OF ITEMS NOS. 38 AND 39 WAS BASED ON THE BEST INFORMATION AVAILABLE AT THAT TIME AND WAS, IN FACT, CORRECT. ALSO, THE REPORT INDICATES THAT THE INFORMATION AS TO ACQUISITION COST OF THE SUPPRESSORS COVERED BY INVITATION NO. 11-019-S 59-37, WHICH WAS REFERRED TO BY MR. ROSENTHAL, WAS INCORRECT. IN VIEW OF THE FOREGOING, THE STATEMENT ATTRIBUTABLE TO THE GOVERNMENT CONTRACTING OFFICER THAT HAD HE KNOWN THE CURRENT ACQUISITION COST OF ITEMS NOS. 38 AND 39 WAS ONLY $0.10 EACH HE IMMEDIATELY WOULD HAVE QUESTIONED THE BID, BECOMES IRRELEVANT AS TO ANY QUESTION OF NOTICE TO HIM IN THIS CASE.

ACCORDINGLY, THE PREVIOUS DECISIONS OF OUR OFFICE DATED AUGUST 5, 1959, SEPTEMBER 12, 1960, AND NOVEMBER 26, 1962, ARE AFFIRMED.