B-131181, APR. 8, 1957

B-131181, APR. 8, 1957

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF MARCH 21, 1957, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THE DAKOTA TRACTOR AND EQUIPMENT COMPANY, FARGO, NORTH DAKOTA, MAY BE RELIEVED FROM LIABILITY FOR THE PERFORMANCE OF CONTRACT NO. DA 33-167-56-389S.

BY INVITATION NO. 33-167-S-56-6, THE SALVAGE BRANCH, COLUMBUS GENERAL DEPOT, COLUMBUS, OHIO, REQUESTED BIDS--- TO BE OPENED SEPTEMBER 30, 1955-- - FOR THE PURCHASE FROM THE GOVERNMENT OF, AMONG OTHER ITEMS, 30 UNUSED EXCITER HOUSINGS, PART NO. 14172, WHICH WAS MANUFACTURED BY THE IDEAL ELECTRIC AND MANUFACTURING COMPANY, ITEM 40A. IN RESPONSE, THE DAKOTA TRACTOR AND EQUIPMENT COMPANY SUBMITTED A BID DATED SEPTEMBER 30, 1955, SIGNED BY R. F. MERRIMAN, IN WHICH THERE APPEARED IN THE TOTAL BID PRICE COLUMN OPPOSITE ITEM 40A THE FIGURE $1,016.88. NOTHING WAS INSERTED IN THE UNIT PRICE COLUMN, ALTHOUGH THE UNIT STATED FOR BIDDING WAS EACH, RATHER THAN THE LOT. THE BID OF THE COMPANY, WHICH WAS ACCOMPANIED BY A BID DEPOSIT IN THE AMOUNT OF $450, WAS ACCEPTED AS TO ITEM 40A ON OCTOBER 6, 1955.

BY LETTER DATED OCTOBER 17, 1955, MR. R. F. MERRIMAN OF MERRIMAN CEMENT PRODUCTS, INC., WEST JEFFERSON, OHIO, THE PERSON WHO SIGNED THE BID AS AGENT FOR THE DAKOTA TRACTOR AND EQUIPMENT COMPANY, ADVISED THE PROPERTY DISPOSAL OFFICER AS FOLLOWS:

"ON THE MORNING OF SEPT. 30, IN YOUR OFFICE, I RECEIVED A LONG DISTANCE CALL FROM MR. JOHN MCCALL, OF DAKOTA TRACTOR SALES, FARGO, N. DAKOTA. WAS ABOUT 9:45 A.M. AND MCCALL ASKED ME TO SUBMIT A LAST MINUTE BID FOR THEM ON 4 LOTS OF MATERIAL IN YOUR SALE NO. 33-167-S-56 6, WHICH WAS TO BE OPENED IN ABOUT 15 MINUTES. THEY WERE TO WIRE THEIR DEPOSIT COVERING THE BID DIRECTLY TO YOU.

"IN MY RUSH TO GET THEIR BID SUBMITTED IN TIME, I MADE THE ERROR OF BIDDING $1016.88 ON LOT 40A, INSTEAD OF LOT 41A, WHICH THEY HAD DIRECTED ME TO BID ON. THE MISTAKE WAS ENTIRELY MINE, AND I AM SURE YOU WILL REALIZE AFTER YOU STUDY THE LOTS IN QUESTION, THAT THEY WOULD NOT HAVE MADE A BID ON LOT 40A UNDER ANY CONSIDERATION AS THEY ARE CATERPILLAR DEALERS, AND LOT 40A IS ELECTRICAL EQUIPMENT, AND LOT 41A IS CATERPILLAR IDLERS.'

THERE WAS ALSO SUBMITTED THE BIDDER'S WORKSHEET, WHICH APPEARS TO BE A SHEET FROM THE INVITATION, AND WHICH SHOWS NUMEROUS COMPUTATIONS, AND OPPOSITE ITEM 41A (CATERPILLAR TRACTOR COMPANY IDLER ASSEMBLIES) THE SUM OF $1,016.88 IS ENTERED PRECEDED BY "DAK," AND SUCH FIGURE HAS A LINE DRAWN THROUGH IT.

BY LETTER DATED OCTOBER 21, 1955, THE CONTRACTING OFFICER ADVISED THE DAKOTA TRACTOR AND EQUIPMENT COMPANY THAT HE HAD NO REASON TO SUSPECT THAT AN ERROR WAS MADE BY THE COMPANY IN BIDDING ON ITEM 40A OF ITS BID; THAT THE ACCEPTANCE OF THE COMPANY'S BID ON THAT ITEM CONSUMMATED A VALID AND BINDING CONTRACT AND THAT THE COMPANY SHOULD REMIT THE BALANCE ($566.88) DUE ON THIS ITEM AND ARRANGE FOR THE REMOVAL OF THE PROPERTY BY NOVEMBER 7, 1955. IN A LETTER DATED NOVEMBER 15, 1955, THE DAKOTA TRACTOR AND EQUIPMENT COMPANY REQUESTED THAT IT BE RELIEVED FROM ITS BID ON ITEM 40A. THE RECORD INDICATES THAT UPON THE COMPANY'S REFUSAL TO COMPLETE PAYMENT OF THE PURCHASE PRICE AND TO REMOVE THE EXCITER HOUSINGS FROM GOVERNMENT PREMISES IN ACCORDANCE WITH THE TERMS OF ITS BID, THE EXCITER HOUSINGS WERE READVERTISED AND SOLD TO ANOTHER PARTY RESULTING IN A LOSS TO THE GOVERNMENT IN THE AMOUNT OF $969.78.

ORDINARILY, A MERE DIFFERENCE IN THE PRICES QUOTED FOR THE SALE OF SURPLUS MATERIAL OR SALVAGE PROPERTY WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; 23 ID. 261; ID. 550. HOWEVER, IN THE PRESENT CASE, IT WOULD APPEAR THAT THE DIFFERENCE BETWEEN THE BID OF THE DAKOTA TRACTOR AND EQUIPMENT COMPANY OF $1,016.88 FOR ITEM 40A, AND THE TWO OTHER BIDS THEREON OF $33 AND $34.50, COUPLED WITH THE FACT THAT THE BID FAILED TO STATE A UNIT PRICE, WAS SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR, PARTICULARLY SINCE THE CONTRACTOR'S FIRM NAME INDICATES THAT IT IS IN THE TRACTOR BUSINESS, THE NATURE OF WHICH WOULD TEND TO SUBSTANTIATE THE CONTRACTOR'S STATEMENT THAT IT WOULD BE INTERESTED IN BIDDING ON ONLY CATERPILLAR PARTS, SUCH AS WERE OFFERED FOR SALE UNDER ITEM 41A. IN THE CIRCUMSTANCES, THE BID OF THE DAKOTA TRACTOR AND EQUIPMENT COMPANY AS TO ITEM 40A SHOULD NOT HAVE BEEN ACCEPTED WITHOUT REQUESTING THE COMPANY TO VERIFY ITS BID, AND WE ARE OF THE OPINION THAT THE CONTRACT IS NOT LEGALLY ENFORCEABLE. IT FOLLOWS THAT THE INDEBTEDNESS FOR THE ALLEGED DAMAGES STATED AGAINST THE DAKOTA TRACTOR AND EQUIPMENT COMPANY SHOULD BE CANCELLED AND REFUND MADE OF THE BID DEPOSIT.