B-135844, MAY 27, 1958

B-135844, MAY 27, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED APRIL 14, 1958, WITH ENCLOSURES, FROM THE ASSISTANT SECRETARY OF THE ARMY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN IN REGARD TO THE REQUEST OF BERNARD PIPE SUPPLY, LOS ANGELES, CALIFORNIA, THAT IT BE RELIEVED OF ANY OBLIGATION UNDER ITS BID WITH RESPECT TO ITEM 58, INVITATION NO. AVI-04-197-S-58-14, ON THE GROUNDS THAT THE DESCRIPTION OF SUCH ITEM IN THE INVITATION WAS NOT ACCURATE AND WAS MISLEADING.

THE PROPERTY DISPOSAL BRANCH, AUXILIARY SERVICES DIVISION, OAKLAND ARMY TERMINAL, OAKLAND, CALIFORNIA, BY INVITATION NO. AVI-04-197-S-58 14 REQUESTED BIDS--- TO BE OPENED JANUARY 31, 1958--- FOR THE PURCHASE OF SALVAGE PROPERTY DESCRIBED UNDER ITEMS 1 TO 145, INCLUSIVE. IN RESPONSE BERNARD PIPE SUPPLY SUBMITTED A BID OFFERING TO PURCHASE VARIOUS ARTICLES AT CERTAIN SPECIFIED PRICES, INCLUDING THE FOLLOWING:

* * * * * * * * * * * * * * (TABLE OMITTED) * * * * * * * * * * * * * *

BY LETTER DATED FEBRUARY 7, 1958, MR. BERGMAN, OWNER OF BERNARD PIPE SUPPLY, ADVISED THE CONTRACTING OFFICER THAT HE HAD INSPECTED THE LATHE COVERED BY ITEM 58 AND DISCOVERED THAT IT WAS A SPECIAL MACHINE USED FOR MAKING SHELLS AND THAT SINCE IT WAS OF NO USE TO HIM, HE WISHED TO WITHDRAW HIS BID ON THAT ITEM. IN REPLY THE CONTRACTING OFFICER ADVISED BERNARD PIPE SUPPLY BY LETTER DATED FEBRUARY 11, 1958, THAT HE WAS WITHOUT AUTHORITY TO PERMIT THE COMPANY TO WITHDRAW ITS BID ON ITEM 58, BUT THAT IF IT SUBMITTED A WRITTEN STATEMENT EXPLAINING ALL PERTINENT CIRCUMSTANCES REGARDING ITS BID AND FULL REASONS FOR ITS DESIRE TO WITHDRAW ITS BID, THE MATTER WOULD BE SUBMITTED TO HIGHER AUTHORITY FOR CONSIDERATION.

IN A LETTER DATED FEBRUARY 17, 1958, MR. BERGMAN ADVISED THE CONTRACTING OFFICER THAT THE REASON WHY HE WAS REQUESTING WITHDRAWAL OF HIS BID ON ITEM 58 WAS THAT THE MACHINE COVERED BY THAT ITEM CANNOT BE USED FOR THE PURPOSE HE HAD IN MIND; THAT THE MACHINE WAS LISTED IN THE INVITATION AS "LATHE, LEBLOND, ENGINE, MEDIUM DUTY" AND THAT HE HAD BID ON THIS DESCRIPTION; AND THAT UPON INSPECTION AFTER BID OPENING AND BEFORE AWARD, HE FOUND THAT IT WAS A SPECIAL TOOL BUILT FOR THE ARMY FOR MAKING SHELLS AND COULD NOT BE USED FOR CIVILIAN PURPOSES. SINCE THE PERIOD FOR ACCEPTANCE OF THE BID OF BERNARD PIPE SUPPLY WAS ABOUT TO EXPIRE, THE CONTRACTING OFFICER ADVISED THE COMPANY BY LETTER DATED MARCH 31, 1958, THAT IT WAS BEING AWARDED ITEM 58; THAT SUCH AWARD WAS BEING MADE TO PRESERVE THE RIGHT OF THE GOVERNMENT TO ACCEPT OR REJECT ALL OFFERS; AND THAT UNTIL A DECISION WAS REACHED BY HIGHER AUTHORITY ON ITS PROTEST, THE COMPANY WAS UNDER NO OBLIGATION TO REMIT THE BALANCE OF THE PURCHASE PRICE OF SUCH ITEM OR TO REMOVE SUCH ITEM.

THE CONTRACTING OFFICER REPORTS THAT THE DESCRIPTION USED IN THE INVITATION FOR ITEM 58 WAS FURNISHED BY THE SAN FRANCISCO ORDNANCE DISTRICT ON THEIR "TURN-IN" DOCUMENT SUPPLEMENTED BY A COPY OF THE MACHINE'S HISTORICAL RECORD; THAT ALTHOUGH THE LATHE WAS USED IN A SHELL PRODUCTION LINE IT WAS CONSIDERED AS A GENERAL PURPOSE MACHINE TOOL ON THE HISTORICAL RECORD; THAT THIS ITEM AS WELL AS VARIOUS OTHER ITEMS ON THIS SALE HAD BEEN USED IN USUAL PRODUCTION BUT CAN BE USED OR ECONOMICALLY MODIFIED TO OTHER PRODUCTION PURPOSES; AND THAT THE DESCRIPTION OF ITEM 58 IS CONSIDERED PROPER AND ADEQUATE AND IN NO WAY SHOULD HAVE MISLED A REASONABLY PRUDENT BUYER OF GOVERNMENT SURPLUS PROPERTY.

THE LATHE DESCRIBED UNDER ITEM 58 IN THE INVITATION WAS OFFERED FOR SALE "AS IS" AND "WHERE IS" AND BIDDERS WERE URGED TO CAREFULLY INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. IF MR. BERGMAN HAD INSPECTED THE LATHE PRIOR TO THE PREPARATION OF HIS BID, HE COULD HAVE DETERMINED WHETHER THE LATHE WOULD HAVE SUITED HIS PURPOSE. THE RECORD INDICATES THAT NO INSPECTION OF ITEM 58 WAS MADE, HOWEVER, AND IN THIS REGARD IT IS EXPRESSLY STATED IN PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS THAT "IN NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS * * * FOR THE WITHDRAWAL OF A BID AFTER OPENING.'

ASIDE FROM THE FACT THAT THE BIDDER HAS FAILED TO FURNISH CONCLUSIVE EVIDENCE IN SUPPORT OF ITS CONTENTIONS, THE BID OF $1,489 FOR ITEM 58 IS NOT SO DISPROPORTIONATE WITH THE ELEVEN OTHER BIDS RECEIVED THEREON, PARTICULARLY WITH REGARD TO THE NEXT HIGH BID OF $650, SO THAT ENFORCEMENT OF THE CONTRACT AS TO ITEM 58 CAN BE REGARDED AS INEQUITABLE OR UNCONSCIONABLE. IN FACT, THE CONTRACTING OFFICER REPORTS THAT THE AMOUNT BID "WAS NOT BEYOND PROBABLE VALUE.'

IT CONSISTENTLY HAS BEEN HELD THAT TO AUTHORIZE THE WITHDRAWAL OF A BID AFTER OPENING, THE EVIDENCE OF ERROR MUST BE SUCH AS TO SHOW CONCLUSIVELY THAT A MISTAKE HAD BEEN MADE THROUGH CONVINCING PROOF AS TO THE NATURE AND CHARACTER OF THE ERROR SUFFICIENTLY COMPELLING TO OVERCOME ANY DOUBT THAT A BONA FIDE MISTAKE HAD, IN FACT, BEEN MADE. SEE REFINING ASSOCIATES, INC. V. UNITED STATES, 124 C.CLS. 115; 9 COMP. GEN. 339; AND 14 ID. 78.

ACCORDINGLY, WE CONCUR WITH THE CONTRACTING OFFICER THAT THE FACTS OF RECORD ARE INSUFFICIENT TO JUSTIFY AUTHORIZING THE RELEASE OF BERNARD PIPE SUPPLY FROM ITS OBLIGATION UNDER ITS BID AS SUBMITTED ON ITEM 58.

THE PAPERS THAT ACCOMPANIED THE LETTER OF APRIL 14, 1958, ARE RETURNED.