B-134431, JAN. 9, 1958

B-134431, JAN. 9, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO LETTER DATED NOVEMBER 18, 1957, WITH ENCLOSURES, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR WHICH GEORGE J. DYMESICH, CAPITOLA, CALIFORNIA, ALLEGES HE MADE IN HIS BID ON WHICH CONTRACT NO. N228S 21028 WAS AWARDED.

THE NAVAL SUPPLY CENTER, DISPOSAL DIVISION, OAKLAND, CALIFORNIA, BY INVITATION NO. B-38-58-228, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS SMALL BOATS AND LANDING CRAFT DESCRIBED UNDER ITEMS 1 TO 50, INCLUSIVE. PROSPECTIVE BIDDERS WERE REQUESTED TO ENTER THEIR BID PRICES ON PAGES 5 AND 6 OF THE INVITATION INSTEAD OF OPPOSITE THE DESCRIPTION OF EACH ITEM. THESE PAGES APPEAR TO BE A SUMMARY BID SHEET CONTAINING FOUR COLUMNS TITLED: (1) ITEM NO., (2) DESCRIPTION, (3) PRICE BID PER UNIT, AND (4) TOTAL PRICE BID.

IN RESPONSE TO THE INVITATION, GEORGE J. DYMESICH SUBMITTED A BID DATED SEPTEMBER 17, 1957, IN WHICH PRICES WERE ENTERED OPPOSITE 15 ITEMS ON THE SUMMARY BID SHEETS (PAGES 5 AND 6). MR. DYMESICH'S BID OF $768 FOR ITEM 19 WAS ACCEPTED, AND CONTRACT NO. N228S-21028 WAS MAILED TO HIM ON SEPTEMBER 25, 1957, TOGETHER WITH INSTRUCTIONS THAT THE MATERIAL MUST BE COMPLETELY REMOVED FROM MARE ISLAND NAVAL SHIPYARD, VALLEJO, CALIFORNIA, BY OCTOBER 10, 1957. THE BIDDER'S DEPOSIT OF $725 FORWARDED WITH HIS BID WAS APPLIED AGAINST THE CONTRACT PRICE OF $768, LEAVING A BALANCE OF $43 DUE ON THE BOAT WHICH AMOUNT WAS PAID IN FULL ON OCTOBER 1, 1957.

AFTER AWARD OF THE CONTRACT AND PAYMENT IN FULL OF THE CONTRACT PRICE, IN LETTER DATED OCTOBER 5, 1957, MR. DYMESICH CLAIMED AN ERROR IN HIS BID AND ALLEGED THAT THE PRICE OF $768 APPEARING OPPOSITE ITEM 19 ON THE SUMMARY BID SHEET WAS INTENDED FOR THE BOAT UNDER ITEM 20 WHICH HE HAD CAREFULLY INSPECTED ON SEPTEMBER 6 PRIOR TO SUBMITTING HIS BID. MR. DYMESICH STATED THAT WHEN HE WENT TO REMOVE THE BOAT, HE DISCOVERED THE MISTAKE IN HIS BID. HE REQUESTED THAT HIS BID AS TO ITEM 19 BE CANCELLED AND HIS ENTIRE CONTRACT PRICE BE REFUNDED.

AN EXAMINATION OF THE INVITATION DISCLOSES THAT THE DESCRIPTION OF THE BOAT UNDER ITEM 19 AND THAT UNDER ITEM 20 ARE IDENTICAL EXCEPT AS TO THE IDENTIFYING NUMBERS ON THE RESPECTIVE ENGINES AND HULLS. BOTH BOATS WERE DESCRIBED AS "USED--- IN POOR CONDITION" AND THE ACQUISITION COST OF EACH BOAT WAS STATED TO BE $5,400. ALSO, THE BOATS WERE LOCATED IN LUMBER YARD NO. 2.

THE RESPONSIBILITY FOR PREPARING THE BID SUBMITTED IN RESPONSE TO AN INVITATION IS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IN THE INSTANT CASE, BIDDERS WERE CAUTIONED IN THE INVITATION TO "CHECK YOUR BIDS--- AN ERROR CAN BE COSTLY.' CONSEQUENTLY, IF MR. DYMESICH INTENDED THE QUOTATION MADE ON ITEM 19 TO BE ON THE BOAT COVERED BY ITEM 20, SUCH ERROR WAS DUE SOLELY TO HIS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. THE ERROR WAS UNILATERAL--- NOT MUTUAL--- AND WOULD NOT ENTITLE THE CONTRACTOR TO RELIEF. SEE SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507; AND OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249, 259.

THE BASIC QUESTION FOR CONSIDERATION, HOWEVER, IS NOT WHETHER MR. DYMESICH MADE A MISTAKE IN HIS BID, BUT WHETHER A VALID AND BINDING CONTRACT WAS CONSUMMATED BY THE ACCEPTANCE OF THE BID. IT IS WELL ESTABLISHED THAT THE ACCEPTANCE OF A BID CONSUMMATES A VALID AND BINDING CONTRACT UNLESS THE OFFICER ACCEPTING IT WAS ON NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH CIRCUMSTANCES AS WOULD MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

THE ABSTRACT OF BIDS SHOWS THAT 18 OTHER BIDS WERE RECEIVED ON ITEM 19, RANGING FROM $11.99 TO $455, AND THAT 32 BIDS WERE RECEIVED ON ITEM 20, RANGING FROM $11.03 TO $565.67.

THE CONTRACTING OFFICER STATES THAT A REVIEW OF ALL BIDS RECEIVED ON ITEMS 19 AND 20 REVEALS THAT THE CLAIMANT'S BID WAS 1.69 TIMES HIGHER THAN THE SECOND HIGH BID ON ITEM 19; ALSO, IF HIS BID HAD BEEN APPLIED TO ITEM 20, IT WOULD HAVE BEEN 1.36 TIMES HIGHER THAN THE SECOND HIGH BID ON THAT ITEM. HE FURTHER STATES THAT THE RANGE OF BID PRICES ON THIS TYPE OF MATERIAL DOES NOT BEAR OUT CLAIMANT'S STATEMENT THAT A BID OF $768 ON ITEM 19 WOULD BE ABSURD. THE CONTRACTING OFFICER RECOMMENDS AGAINST GRANTING THE RELIEF REQUESTED BECAUSE IT IS HIS OPINION THAT THE DIFFERENCE BETWEEN THE HIGH BID OF CLAIMANT AND THE SECOND HIGH BID ON ITEM 19 WAS NOT SUFFICIENT TO ALERT HIM, AT THE TIME OF EVALUATING THE BIDS, THAT AN ERROR MIGHT EXIST IN THE HIGH BID AND, ALSO, BECAUSE THE BIDDER HAS NOT PRESENTED ANY EVIDENCE OR PROOF IN SUPPORT OF HIS CLAIM THAT HIS BID WAS NOT AS INTENDED.

THE PROPERTY HERE IN QUESTION WAS OFFERED FOR SALE AS SURPLUS. VARIANCE IN PRICES BID ON AN ITEM WOULD NOT NECESSARILY INDICATE ERROR SINCE A WIDE RANGE IN THE PRICES BID FOR SURPLUS PROPERTY IS USUAL, AS BIDDERS GENERALLY CAN BE EXPECTED TO PLACE DIFFERENT VALUES ON SUCH MATERIALS DEPENDING ON THEIR INDIVIDUAL NEEDS OR THEIR CHANCES OF RESALE. THIS BEING TRUE, A MERE DIFFERENCE IN THE AMOUNTS OF THE BIDS WOULD NOT OF ITSELF BE SUFFICIENT TO PLACE THE CONTRACTING OFFICER ON NOTICE OF AN ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED THE GOVERNMENT. SEE IN THIS CONNECTION 28 COMP. GEN. 550, 551.

IN VIEW OF THE ABOVE AND SINCE CLAIMANT'S BID PRICE OF $768 WAS SUBSTANTIALLY LOWER THAN THE ACQUISITION COST OF $5,400 FOR THE BOAT UNDER ITEM 19, WE AGREE WITH THE CONTRACTING OFFICER THAT ON THE BASIS OF VARIANCE IN THE BIDS HE COULD NOT BE CHARGED WITH NOTICE OF PROBABLE ERROR IN THE HIGH BID. HOWEVER, AN EXAMINATION OF MR. DYMESICH'S BID DISCLOSES THAT, WHILE ON THE SUMMARY BID SHEET (PAGE 5) OPPOSITE ITEM 19 IN BOTH THE UNIT AND TOTAL PRICE BID COLUMNS THERE WAS ENTERED ,$768.00," THERE ALSO APPEARS ON PAGE 7 OF THE BID OPPOSITE THE DESCRIPTION FOR THIS ITEM AN ILLEGIBLE PENNED FIGURE WHICH HAD BEEN SCRATCHED OUT. NO BID PRICE WAS ENTERED ON THE SUMMARY BID SHEET OPPOSITE ITEM 20, BUT ON PAGE 7 OPPOSITE THE DESCRIPTION OF THIS ITEM THERE ARE PENNED NOTATIONS "FAIR," "$811.00," "768," AND AN ILLEGIBLE ENTRY WHICH HAD BEEN STRICKEN OUT. IN VIEW OF THESE INCONSISTENCIES, ESPECIALLY THE BID PRICE OF $768 APPEARING OPPOSITE ITEM 19 ON THE SUMMARY BID SHEET (PAGE 5) AND A NOTATION OF THAT FIGURE OPPOSITE THE DESCRIPTION OF ITEM 20 ON PAGE 7, THE BID ON ITS FACE WAS AMBIGUOUS, AND WE BELIEVE THAT THE CONTRACTING OFFICER SHOULD HAVE REQUESTED MR. DYMESICH TO CLEAR UP THE AMBIGUITY IN HIS BID PRIOR TO ITS ACCEPTANCE.

IN THE CIRCUMSTANCES, THERE IS CONSIDERABLE DOUBT WHETHER THE ACCEPTANCE OF MR. DYMESICH'S BID RESULTED IN A VALID AND BINDING CONTRACT. ACCORDINGLY, AND SINCE THE ERROR WAS ALLEGED PROMPTLY UPON ITS DISCOVERY AND SINCE THE RECORD INDICATES THAT THE PROPERTY IS STILL IN POSSESSION OF THE DISPOSAL AGENCY, MR. DYMESICH MAY BE RELEASED FROM HIS OBLIGATION UNDER CONTRACT NO. N228S-21028 AND THE FULL AMOUNT OF HIS PURCHASE PRICE MAY BE REFUNDED TO HIM.

THE PAPERS, WITH THE EXCEPTION OF THE CONTRACTING OFFICER'S STATEMENT OF FACTS AND RECOMMENDATIONS AND THE ABSTRACT OF BIDS, ARE RETURNED.