B-128331, JUL. 6, 1956

B-128331, JUL. 6, 1956

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED JUNE 20, 1956, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY (MATERIAL), WHO REQUESTS A DECISION AS TO THE ACTION TO BE TAKEN REGARDING AN ERROR THE FIRM OF A. ALPERT AND SONS ALLEGES IT MADE IN ITS BID ON WHICH SALES CONTRACT N62583S-11924 IS BASED.

IN RESPONSE TO THE INVITATION WHICH REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF SALVAGE MATERIALS LISTED UNDER LOTS 1 TO 37, INCLUSIVE, A. ALPERT AND SONS SUBMITTED A BID WHICH OFFERED $179.99 FOR ITEM 6, DESCRIBED AS "STEEL "A" FRAMES.' THE ABSTRACT OF BIDS SHOWS THAT EIGHT OTHER BIDS WERE RECEIVED ON LOT 6, RANGING FROM $3 TO $24. THE BID OF A. ALPERT AND SONS WAS ACCEPTED. AFTER RECEIPT OF THE NOTICE OF AWARD, THE PURCHASER PAID THE CONTRACT PRICE, BUT SUBSEQUENTLY REFUSED TO TAKE POSSESSION OF THE MATERIAL. BY LETTER DATED MAY 24, 1956, THE PURCHASER, IN EXPLAINING ITS REFUSAL TO REMOVE THE PROPERTY, ALLEGED AN ERROR IN ITS BID ON THE BASIS IT HAD ASSUMED IN MAKING AN INSPECTION OF THE MATERIAL THAT ITEM 6 CONSISTED OF STEEL "A" FRAMES TOGETHER WITH APPROXIMATELY 1,000 POUNDS OF BRASS RODS. IN REQUESTING A REFUND OF THE CONTRACT PRICE, THE PURCHASER STATED:

"WE DON-T KNOW HOW THAT MISTAKE WAS MADE. ITS POSSIBLE THAT THE NUMBER OF "SSL-6" ON THE PALLET OF THE BRASS RODS WAS MISTAKENLY FIGURED AS LOT 6. * * *"

THE CONTRACTING OFFICER IN HIS "STATEMENT OF FACTS" SAID:

"AN INVESTIGATION FAILED TO REVEAL ANY DISCREPANCY BETWEEN THE MATERIAL AS DESCRIBED UNDER ITEM NO. 6 IN SITE SALES LETTER NO. SSL-6 56 AND THE MATERIAL DISPLAYED AND AVAILABLE FOR INSPECTION AS ITEM NO. 6, SSL-6-56. HOWEVER, ITEM NO. 5, BEING WELL MARKED AND DEFINED AS ITEM NO. 5, SSL-6- 56, CONSISTED OF PIPE, DRILL STEMS AND RODS, STEEL STOCK, LOUVRES, ETC. IT IS APPARENT THAT THE BIDDER ERRED IN FAILING TO NOTE THE DELINEATION OF THE BOUNDARY LINE BETWEEN ITEMS NO. 5 AND 6.'

THE MIMEOGRAPHED FORM FURNISHED TO ALL PROSPECTIVE BIDDERS ON WHICH THE PURCHASER RECORDED HIS BID PROVIDES:

"/I) (WE) HEREBY BID ON THE FOLLOWING ITEM/S) OFFERED UNDER SITE SALES LETTER NO. SSL-6-56, DATE OF OPENING 8 MAY 1956, AND AGREE THAT THIS BID SHALL BE SUBJECT TO ALL THE TERMS AND CONDITIONS CONTAINED IN SAID SITE SALES LETTER:

"LOT NO. DESCRIPTION

5 PIPE, DRILL STEMS AND RODS,

STEEL STOCK, LOUVRES, ETC.

6 STEEL "A" FRAMES"

THE QUESTION FOR CONSIDERATION IS WHETHER A VALID CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE PURCHASER'S BID.

ALTHOUGH THERE IS A WIDE VARIANCE BETWEEN THE BID OF A. ALPERT AND SONS AND THE OTHER BIDDERS, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO WARRANT THE CONCLUSION THAT THE CONTRACTING OFFICER WAS PLACED ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF THE COMPANY AND THAT HE SHOULD HAVE REQUESTED THE BIDDER TO VERIFY ITS BID. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON SALVAGE, WASTE AND SURPLUS PROPERTY, A MERE PRICE DIFFERENCE WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, AS WOULD SIMILAR PRICE DIFFERENCES ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS PROPERTY ARE BASED MORE OR LESS THAN THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE THE BIDDER MIGHT WISH TO TAKE. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976; 28 ID. 261; AND ID. 550. THUS, SINCE NO ERROR WAS ALLEGED UNTIL AFTER AWARD, THE ACCEPTANCE OF THE BID WAS MADE IN GOOD FAITH AND 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.

FURTHERMORE, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. THE INVITATION FOR BIDS WAS CLEAR AND UNAMBIGUOUS; APPARENTLY ALL ITEMS WERE MARKED AND DISPLAYED PROPERLY AND THERE WAS NO DISSIMILARITY BETWEEN THE INVITATION DESCRIPTION AND THE MATERIAL AVAILABLE FOR XAMINATION; AND THE BID WAS REGULAR ON ITS FACE. THEREFORE, IF A MISTAKE WAS MADE, IT WAS DUE SOLELY TO THE BIDDER'S CARELESSNESS, NEGLIGENCE OR OVERSIGHT IN EXAMINATION OF THE PROPERTY AND WAS NOT INDUCED OR CONTRIBUTED TO IN ANY MANNER BY THE GOVERNMENT, NOR WAS THERE ANY REASON TO SUSPECT THAT THE BID WAS NOT MADE AS INTENDED. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61; AND 3 WILLISTON ON SALES 654. THE ERROR THAT WAS MADE WAS UNILATERAL. THEREFORE, THE PURCHASER IS NOT ENTITLED TO ANY REDRESS WHEN ONLY IT WAS UNDER A MISTAKE. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259; SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND 3 WILLISTON ON SALES 656.

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD AND THE LAW APPLICABLE THERETO, THERE APPEARS NO LEGAL BASIS TO RELEASE A. ALPERT AND SONS FROM ITS OBLIGATION UNDER THE TERMS OF THE CONTRACT. IF DELIVERY OF THE ITEM IS NOT ACCEPTED WITHIN A REASONABLE TIME, THE GOVERNMENT SHOULD EXERCISE ITS RIGHT TO RETAIN THE PROPERTY AND TO RETAIN FROM THE PURCHASE PRICE LIQUIDATED DAMAGES AS PROVIDED IN PARAGRAPH 18 OF THE GENERAL TERMS AND CONDITIONS OF THE SALE.