B-126188, DEC. 21, 1955

B-126188, DEC. 21, 1955

TO HONORABLE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED NOVEMBER 23, 1955, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE NAVY (MATERIAL), REQUESTING A DECISION AS TO THE APPROPRIATE ACTION TO BE TAKEN BY YOUR DEPARTMENT IN CONNECTION WITH A CONTROVERSY GROWING OUT OF A CLAIM BY AIRCRAFT RADIO INDUSTRIES, INC., THAT THERE WAS FAILURE ON THE PART OF THE GOVERNMENT TO DELIVER THE MATERIAL COVERED BY ITEM 1 OF CONTRACT NO. N127/S/-3729, DATED MARCH 8, 1954, FOR THE SALE OF SURPLUS MISCELLANEOUS ELECTRICAL, RADIO AND ELECTRONIC EQUIPMENT BY THE U.S. NAVAL AIR STATION, QUONSET POINT, RHODE ISLAND.

IN RESPONSE TO INVITATION NO. B-25-54, DATED FEBRUARY 11, 1954, AIRCRAFT RADIO INDUSTRIES, NC., SUBMITTED A BID FOR THE PURCHASE OF, AMONG OTHER ARTICLES, ONE LOT OF MISCELLANEOUS ELECTRICAL EQUIPMENT CONSISTING OF LAMPS, INSERTS, CLIPS, MOTORS, RELAYS, JUNCTION BOXES, GENERATORS, CONDULETS, ETC., OFFERED AS ITEM 1, AT A LOT PRICE OF $776.76. THE BID WAS ACCEPTED AND PAYMENT MADE FOR THE MATERIAL.

BY LETTER DATED MARCH 12, 1954, THE CONTRACTOR STATED THAT IT WAS REFUSING TO ACCEPT DELIVERY OF LOT 1 FOR THE REASON THAT THE LOT OFFERED FOR DELIVERY DID NOT CONTAIN THE MATERIAL SHOWN ITS REPRESENTATIVE WHEN INSPECTION WAS MADE. FURTHER CORRESPONDENCE AND REPORTS OF PERSONAL INTERVIEWS BETWEEN REPRESENTATIVES OF THE CONTRACTOR AND OF THE GOVERNMENT ESTABLISH THE POINT IN DISPUTE TO BE WHETHER CERTAIN MATERIAL, ON DISPLAY IN A WAREHOUSE PRIOR TO SALE, IN NUMBERED LOTS, WAS DESIGNATED AS BELONGING IN ITEM 1 OR IN ITEM 2. ACCEPTING THE SUBSTANCE OF THE STATEMENTS OF THE ADMINISTRATIVE OFFICERS, AS WE MUST IN THE ABSENCE OF CLEAR AND CONVINCING EVIDENCE TO THE CONTRARY, WE CONCLUDE THAT THE CONTRACTOR'S ALLEGED MISTAKE RESULTED SOLELY FROM ITS OWN NEGLIGENCE AND WAS NOT CONTRIBUTED TO BY THE GOVERNMENT, AND THAT ACCEPTANCE OF THE BID GAVE RISE TO A BINDING CONTRACT.

PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS OF THE CONTRACT PROVIDES THAT IF AFTER AWARD THE PURCHASER FAILS TO PAY THE CONTRACT PRICE, FAILS TO REMOVE THE MATERIAL, OR OTHERWISE FAILS TO PERFORM ANY OF ITS OBLIGATIONS, HE WILL THEREBY LOSE ALL RIGHT, TITLE, AND INTEREST IN THE MATERIAL THEREUNDER, AND THE GOVERNMENT MAY, AT ITS ELECTION, RETAIN THE MATERIAL AND MAY RETAIN FROM ANY AMOUNT PAID BY THE PURCHASER, AS LIQUIDATED DAMAGES, A SUM EQUAL TO TWENTY-FIVE PERCENT OF THE PURCHASE PRICE PLUS ANY ACCRUED CHARGES, THE BALANCE, IF ANY, TO BE REMITTED TO THE PURCHASER.

ACCORDINGLY, APPROPRIATE ACTION SHOULD BE TAKEN BY YOUR DEPARTMENT TO DEPOSIT TWENTY-FIVE PERCENT OF THE PURCHASE PRICE ($194.19) OF ITEM 1, AND THE BALANCE OF THE CONTRACT PRICE AS TO SUCH ITEM MAY BE REFUNDED TO THE CONTRACTOR.