B-131144, APR. 10, 1957

B-131144, APR. 10, 1957

TO HONORABLE FRANKLIN G. FLOETE, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 18, 1957, CONCERNING THE BID SUBMITTED BY THE SEATTLE IRON AND METALS CORPORATION OF SEATTLE, WASHINGTON, IN RESPONSE TO INVITATION FOR BIDS NO. GS-M-57-3, ISSUED BY THE GSA SEATTLE REGIONAL OFFICE ON OCTOBER 24, 1956, AND OPENED ON NOVEMBER 14, 1956. A DECISION IS REQUESTED AS TO WHETHER THE BID MAY BE DISREGARDED.

THE INVITATION, AS MODIFIED, REQUESTED BIDS FOR FURNISHING TWO LOTS OF SURPLUS PERSONAL PROPERTY, DESCRIBED AS FOLLOWS:

CHART

LOT 1. MISCELLANEOUS SCRAP CONSISTING OF APPROXIMATELY THE

FOLLOWING:

3 EA. STEEL PALLET RACKS, 9 FT. BY 12 FT. SCRAP PIPE,

FLAT STEEL SHAPES AND ANGLES, ADAPTERS, PALATIMS,

PALATIERS, AND 1 EACH TRUCK, HAND, ALL MAGNESIUM,

CAPACITY 600 POUNDS, SIZE 44 IN. BY 12 IN. WIDE, 2 WHEEL

PUSH.

LOT 2. SCRAP BATTERIES, LEAD ACID TRUCK AND PASSENGER

CAR. APPROX. 24 EACH.

THREE BIDS WERE RECEIVED IN RESPONSE TO THE INVITATION. TWO OF THE BIDS WERE ON AN "ALL OR NONE" BASIS FOR BOTH ITEMS, AND THE PRICES QUOTED WERE $87.90 AND $211. THE THIRD BID, THAT OF SEATTLE IRON AND METALS CORPORATION, QUOTED PRICES OF $407.77 FOR LOT 1 AND $53.60 FOR LOT 2.

AT THE OPENING OF THE BIDS A REPRESENTATIVE OF SEATTLE IRON AND METALS CORPORATION ALLEGED THAT THE CORPORATION'S BID ON LOT 1 WAS ERRONEOUS IN THAT HE WAS LED TO BELIEVE THAT THE LOT CONTAINED MATERIALS WHICH WERE NOT IN FACT INCLUDED BY THE GOVERNMENT FOR SALE UNDER THE LOT AT THAT TIME. IN SUBSEQUENT LETTERS AND IN AN AFFIDAVIT IT IS ALLEGED THAT, SHORTLY AFTER RECEIPT OF THE INVITATION, A REPRESENTATIVE OF THE BIDDER VISITED THE GSA SALES LOT TO INSPECT THE MATERIAL OFFERED FOR SALE AND IN COMPANY WITH A GSA REPRESENTATIVE VISITED THE AREA WHERE THE MATERIALS ADVERTISED FOR SALE WERE STORED. HE WAS ADVISED THAT THE MATERIALS TO BE INCLUDED IN THE SALE WERE GENERALLY WITHIN AN AREA DEFINED BY THE GSA REPRESENTATIVE. AT THE TIME OF THE INSPECTION THERE WAS NO ROPE OR LINE OF DEMARKATION SETTING OFF THE SURPLUS PROPERTY WHICH WAS OFFERED FOR SALE AS LOT 1, THERE BEING IN THE IMMEDIATE VICINITY OF THE STEEL PALLET RACKS, FLAT STEEL SHAPES AND ANGLES AND OTHER MATERIAL GENERALLY INCLUDED IN THE DESCRIPTION OF LOT 1, AND A UNISTRUT CRADLE CONTAINING A QUANTITY OF PIPE. BELIEVING THAT THE UNISTRUT CRADLE AND OTHER MATERIALS WERE INCLUDED IN THE MATERIALS OFFERED FOR SALE UNDER LOT 1, THE BIDDER'S REPRESENTATIVE DETERMINED THAT THE SCRAP VALUE OF THE MATERIAL WAS $407.77, WHICH HE RECOMMENDED AS THE BID PRICE TO THE PRESIDENT OF HIS CORPORATION. IT IS AVERRED THAT THE ESTIMATE WAS BASED ON THE CURRENT SCRAP MARKET PRICES ON A STRAIGHT TONNAGE BASIS WITH THE ANTICIPATION THAT ALL THE MATERIAL IN THE LOT WOULD BE SOLD AS SCRAP AND NOT AS SALVAGE.

IT IS REPORTED THAT AN INVESTIGATION OF THE BIDDER'S ALLEGATIONS DISCLOSED THAT THE SCRAP METAL OFFERED FOR SALE WAS COLLECTED IN THE OPEN STORAGE AREA OF THE GENERAL SERVICES ADMINISTRATION WAREHOUSE AT THE SAND POINT NAVAL AIR STATION, SEATTLE, WASHINGTON; THAT AT THE TIME OF THE ISSUANCE OF THE INVITATION, THE SCRAP MATERIAL OFFERED FOR SALE HAD NOT BEEN ROPED-IN OR OTHERWISE SEPARATED FROM OTHER ITEMS NOT OFFERED FOR SALE; THAT NEARBY ITEMS NOT OFFERED FOR SALE INCLUDED, AMONG OTHERS, A STACK OF SIDE GATES FOR MATERIALS-HANDLING-EQUIPMENT AND A UNISTRUT CRADLE CONTAINING A QUANTITY OF PIPE. IT WAS FURTHER ASCERTAINED THAT THE MATERIALS OFFERED FOR SALE UNDER LOT 1 WERE NOT ROPED-IN OR OTHERWISE SEPARATED FROM OTHER ITEMS NOT OFFERED FOR SALE UNTIL ON OR ABOUT NOVEMBER 1, 1956, OR APPROXIMATELY SEVEN DAYS AFTER THE ISSUANCE OF THE INVITATION. THE IDENTITY OF THE PARTICULAR GSA EMPLOYEE WHO ALLEGEDLY ACCOMPANIED THE BIDDER'S REPRESENTATIVE OR THE NATURE OF THE INFORMATION WHICH MIGHT HAVE BEEN GIVEN TO PROSPECTIVE BIDDERS BY ANY OF THE EMPLOYEES AT THE GSA WAREHOUSE AS TO THE LOCATION OF THE SCRAP MATERIAL OFFERED FOR SALE COULD NOT BE DETERMINED. IT IS FURTHER REPORTED THAT THE MATERIALS COVERED BY LOT 1 ARE SUITABLE ONLY FOR SCRAP; THAT THERE ARE APPROXIMATELY 6,400 POUNDS, AND THAT BASED UPON THE FAIR MARKET VALUE OF SIMILAR SCRAP, THE HIGHEST PRICE THAT COULD REASONABLY BE EXPECTED FOR LOT 1 WOULD APPROXIMATE $163.

ON THE BASIS OF THE FACTS AND EVIDENCE OF RECORD, THERE APPEARS NO DOUBT THAT THE BID OF SEATTLE IRON AND METALS CORPORATION ON LOT 1 WAS ERRONEOUS, AND SINCE THE ERROR WAS ALLEGED PRIOR TO AWARD, THE BID SHOULD BE DISREGARDED.

IN CONNECTION WITH YOUR REQUEST THAT THE GENERAL SERVICES ADMINISTRATION BE AUTHORIZED TO TAKE THE SAME ACTION ADMINISTRATIVELY IN MISTAKE-IN-BID CASES ARISING UNDER SALES TRANSACTIONS AS WAS GRANTED IN THE DECISION OF MARCH 21, 1951, B-101323, IN REGARD TO PROCUREMENT TRANSACTIONS, YOU ARE ADVISED THAT SUCH AUTHORITY IS HEREBY GRANTED, SUBJECT TO THE CONDITIONS SET FORTH IN THAT DECISION.