B-134184, NOV. 5, 1957

B-134184, NOV. 5, 1957

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 21, 1957 (N11.2 L8/L8/NA51), FROM THE DIRECTOR, PURCHASE OPERATIONS DIVISION, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO PROPRIETY OF CANCELLING SALES CONTRACT NO. N600505-2226, DATED JUNE 29, 1957, WITH DEE PRODUCTIONS, INC., PARAMOUNT, CALIFORNIA, BECAUSE OF A MISTAKE ALLEGED TO HAVE BEEN MADE THEREIN.

IN RESPONSE TO INVITATION NO. B-36-57, ISSUED JUNE 5, 1957, BY THE U.S. MARINE CORPS AIR STATION, EL TORO, CALIFORNIA, THE FIRM OF DEE PRODUCTIONS, INC., SUBMITTED A BID OF $1,730 ON ITEM NO. 30 OF THE SALES CATALOG, DESCRIBED AS FOLLOWS:

CHART

"TRUCK, STAKE: INT-L. HARVESTER, MODEL IHCM

3H-4-269, 1944, 4X4, 6 CYLINDER GASOLINE ENGINE,

151 INCHES WHEELBASE, 1 1/2 TON CAPACITY, SERIAL N3H4-3244

ENGINE NO. BLD 269-B-6628

U.S.N. NO. 51-07774

CONDITION: USED, FAIR: REPAIRS REQUIRED

ACQUISITION COST - $1,250.00.'

SEVEN OTHER BIDS, IN THE RESPECTIVE AMOUNTS OF $461, $457.91, $427.55, $422, $241.99, $228 AND $50, WERE RECEIVED ON THE ABOVE ITEM. THE AWARD OF THE CONTRACT ON JUNE 29, 1957, TO THE ABOVE FIRM COVERED ITEM NO. 30 ONLY.

THE MISTAKE FIRST WAS ALLEGED BY MR. ORVILLE L. DICK, PRESIDENT OF DEE PRODUCTIONS, INC., IN A TELEPHONE CONVERSATION HAD WITH THE CONTRACTING OFFICER ON JULY 5, 1957. THIS CONVERSATION WAS FOLLOWED BY A WRITTEN COMMUNICATION DATED JULY 8, 1957, WHEREIN MR. DICK SUBMITTED THE FOLLOWING EXPLANATION AS TO HOW THE ALLEGED ERROR OCCURRED:

"I WENT DOWN TO THE AIR STATION ON THE MORNING OF THE BID OPENING FOR AN INSPECTION OF THE TRUCKS AND ARRIVED LATE. I MADE A QUICK INSPECTION OF THE TRUCKS WITHOUT HAVING A BID FORM WITH ME AND MADE NOTATIONS AS TO THE CONDITION OF THE TRUCKS ON A SLIP OF PAPER WHICH IS ENCLOSED.

"I THEN WENT IN AND PICKED UP A BID FORM JUST WHEN THEY WERE READY TO OPEN THE BIDS. THINKING ITEM NO. 30 WAS AN INTERNATIONAL 6 BY 6, I MUST HAVE PUT IN A BID OF $1,730.00 ON IT, ALTHOUGH YOU CAN READILY SEE FROM MY SLIP OF PAPER I MARKED NO. 30 AT $550.00. NOT HAVING ENOUGH DEPOSIT, I INTENDED TO LEAVE NO. 30 OFF OF MY BID.

"ACTING FOR DEE PRODUCTIONS, I HAVE PURCHASED PROBABLY 150 TO 200 OF THESE INTERNATIONAL 6 BY 6'S IN THE PAST TWO YEARS AND I DO KNOW THE VALUE OF THESE TRUCKS. YOU CAN, THEREFORE, UNDOUBTEDLY UNDERSTAND THAT THE BID OF $1730.00 WAS A MISTAKE, AS THE COST OF THE TRUCK NEW WAS ONLY ABOUT $1200.00.'

THE CONTRACTING OFFICER IN HIS WRITTEN STATEMENT OF JULY 16, 1957, STATED THAT HE CONSIDERED THE $1,730 BID OF DEE PRODUCTIONS, INC., ON THE ABOVE ITEM TO BE ENTIRELY "OUT OF RANGE," OF THE OTHER BIDS RECEIVED. ASIDE FROM THE COMPARISON WITH OTHER BIDS, THE BID OF $1,730 WAS COMPLETELY OUT OF LINE WITH THE VALUE OF THE TRUCK OFFERED FOR SALE UNDER ITEM 30 OF THE CATALOG, WHICH WAS DESCRIBED AS A 1944 MODEL, IN NEED OF REPAIRS AND ACQUIRED--- PRESUMABLY WHEN NEW--- AT A COST OF ONLY $1,250. ALTHOUGH A WIDE VARIANCE IN PRICES QUOTED FOR SURPLUS PROPERTY BEING SOLD BY THE GOVERNMENT IS NOT A FACTOR WHICH ORDINARILY WOULD SUFFICE TO PUT A CONTRACTING OFFICER ON NOTICE OF A MISTAKE (UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683), THE CONCLUSION SEEMS INEVITABLE IN THIS CASE THAT THE CONTRACTING OFFICER SHOULD NOT HAVE MADE THE AWARD WITHOUT A PRIOR REQUEST FOR CONFIRMATION OF THE BID.

IN THE CIRCUMSTANCES, YOU ARE AUTHORIZED TO CANCEL THE AWARD OF ITEM NO. 30 TO THE DEE PRODUCTIONS, INC., AS RECOMMENDED BY THE CONTRACTING OFFICER.