B-134950, JAN. 31, 1958

B-134950, JAN. 31, 1958

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER DATED JANUARY 16, 1958, FILE R11.2-L8 L8- NT4-9, FROM THE ASSISTANT CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN RELATIVE TO AN ERROR WHICH JIMMIE'S SAFETY GARAGE, HONOLULU, T.H., ALLEGES WAS MADE IN ITS BID ON WHICH CONTRACT NO. N604S-31936, IS BASED.

BY INVITATION NO. B-47-58-604, THE NAVAL SUPPLY CENTER, PEARL HARBOR, T.H., REQUESTED BIDS--- TO BE OPENED 21 NOVEMBER 1957--- FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF MISCELLANEOUS SURPLUS EQUIPMENT, INCLUDING ITEM 9 WHICH WAS DESCRIBED ON THE CONSOLIDATED BID SHEET AS: "MISC PARTS FOR STEAM PROPULSION APPARATUS, * * *.' IN RESPONSE, JIMMIE'S SAFETY GARAGE SUBMITTED A BID DATED NOVEMBER 25, 1957, OFFERING TO PURCHASE, AMONG OTHERS, THE EQUIPMENT COVERED BY ITEM 9 AT A PRICE OF $500.

BY LETTER DATED DECEMBER 4, 1957, JAMES I. TANAKA, OF JIMMIE'S SAFETY GARAGE, ADVISED THE PROPERTY DISPOSAL OFFICER THAT HE HAD MADE AN ERROR IN HIS BID, IN THAT, HE HAD INTENDED TO BID ON ITEM 10 (189 SHIP PROPELLERS) INSTEAD OF ITEM 9, BUT HAD UNINTENTIONALLY PLACED HIS BID PRICE ON ITEM 9. THE BIDDER FURTHER STATED: "I HAVE NOTHING IN THE WAY OF FIGURES OR ANY OTHER DOCUMENT TO SUBSTANTIATE MY CLAIM OF ERROR. I RECALL HAVING SCRIBBLED A FEW FIGURES AT THE TIME BUT CASUALLY THREW THE SCRAP OF PAPER AWAY.'

THERE WAS NOTHING ON THE FACE OF THE BID SUBMITTED BY THE COMPANY TO INDICATE THAT THE PRICE QUOTED THEREIN FOR ITEM 9 WAS INTENDED FOR ITEM 10. ALTHOUGH THE BID WAS CONSIDERABLY HIGHER THAN THE FOUR OTHER BIDS RECEIVED ON ITEM 9, WHICH RANGED FROM $34.99 TO $103, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN A BID FOR THE PURCHASE OF SUCH PROPERTY FROM THE GOVERNMENT, 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. 607; ID. 976; 28 ID. 261; ID. 550. THE PRESENT RECORD INDICATES THAT THE ACCEPTANCE OF THE BID OF JIMMIE'S SAFETY GARAGE WAS IN GOOD FAITH, NO ERROR HAVING BEEN ALLEGED UNTIL AFTER AWARD. CONSEQUENTLY, IT MUST BE HELD THAT SUCH ACTION CONSUMMATED A VALID AND BINDING CONTRACT. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

MOREOVER, THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.CLS. 120, 163. IF, AS STATED IN THE LETTER OF DECEMBER 4, 1957, THE BIDDER INADVERTENTLY INSERTED THE PRICE INTENDED FOR ITEM 10 OPPOSITE ITEM 9, SUCH ERROR WAS DUE SOLELY TO HIS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. SEE GRYMES V. SANDERS, ET AL., 93 U.S. 55, 61. ANY ERROR THAT WAS MADE IN THE BID OF THE COMPANY WAS UNILATERAL--- NOT MUTUAL--- AND, THEREFORE, DOES NOT ENTITLE THE COMPANY TO RELIEF FROM ITS OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507.

THE INVITATION PROVIDED THAT A BID DEPOSIT IN THE AMOUNT OF 20 PERCENT OF THE TOTAL BID MUST ACCOMPANY THE BID. PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS, PROVIDES IN PART, AS FOLLOWS:

"18. BID GUARANTEE AND LIQUIDATED DAMAGES: * * * IF AFTER AWARD THE PURCHASER FAILS TO PAY THE BALANCE OF THE PURCHASE PRICE, FAILS TO REMOVE THE MATERIAL, OR OTHERWISE FAILS TO PERFORM ANY OF THE PURCHASER'S OBLIGATIONS, THE GOVERNMENT MAY, AT ITS ELECTION, RETAIN THE MATERIAL AND EITHER ASSESS THE PURCHASER, OR RETAIN FROM ANY AMOUNT PAID BY THE PURCHASER, AS LIQUIDATED DAMAGES, A SUM EQUAL TO TWENTY PERCENT (20 PERCENT) OF THE PURCHASE PRICE. THE BALANCE, IF ANY, WILL BE REMITTED TO THE PURCHASER.'

ACCORDINGLY, ON THE BASIS OF THE FACTS OF RECORD, THE BIDDER MAY NOT BE RELIEVED FROM LIABILITY UNDER ITS BID AND, IF THE COMPANY FAILS TO PERFORM, THE PROVISIONS OF PARAGRAPH 18 OF THE GENERAL SALE TERMS AND CONDITIONS, SUPRA, WILL BE FOR APPLICATION. IN THIS CONNECTION, SEE 28 COMP. GEN. 550.