B-136774, JUL. 24, 1958

B-136774, JUL. 24, 1958

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER DATED JULY 9, 1958, FROM THE DEPUTY ASSISTANT SECRETARY (LOGISTICS), REQUESTING A DECISION AS TO THE ACTION THAT SHOULD BE TAKEN RELATIVE TO AN ERROR ALLEGED BY METRO ELECTRONICS CORPORATION, 172 WASHINGTON STREET, NEW YORK 7, NEW YORK, TO HAVE BEEN MADE IN ITS BID SUBMITTED ON ITEM NO. 43 OF SPOT BID SALE NO. 15-010-S 58-11 HELD ON JANUARY 20, 1958, AT THE LEXINGTON SIGNAL DEPOT, LEXINGTON, KENTUCKY.

UNDER ITEM NO. 43 OF THE INVITATION THERE WAS OFFERED FOR SALE 95,114 SOCKETS, ELECTRON TUBE, OF A CERTAIN TYPE. METRO ELECTRONICS CORPORATION SUBMITTED, APPARENTLY BY MAIL, A BID OF ?0151 EACH FOR ANY OR ALL OF THE SOCKETS COVERED BY ITEM NO. 43. THE RECORD SHOWS THAT THE FIVE OTHER BIDS RECEIVED ON ITEM NO. 43 WERE IN THE AMOUNTS OF ?0032, ?00211, ?0014, ?00111 AND ?001 EACH. THE BID OF METRO ELECTRONICS CORPORATION WAS ACCEPTED ON JANUARY 23, 1958, FOR THE FULL QUANTITY AT THE PRICE OF ?0151 EACH, OR A TOTAL PRICE OF $1,436.22. BY LETTER DATED FEBRUARY 11, 1958, METRO ELECTRONICS CORPORATION ACKNOWLEDGED RECEIPT OF THE NOTICE OF AWARD AND ADVISED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM NO. 43 IN THAT A DECIMAL POINT HAD BEEN INADVERTENTLY MISPLACED MAKING THE BID PRICE ?0151 RATHER THAN ?00151 EACH, AS INTENDED. SINCE THE BID WAS ACCEPTED FOR ALL 95,114 UNITS, THE TOTAL AMOUNT OF THE AWARD WAS $1,436.22 RATHER THAN $143.62 AS ALLEGEDLY CONTENDED. THE CORPORATION REQUESTED THAT THE AWARD BE CANCELLED.

THE PROPERTY DISPOSAL OFFICER ADVISED THE CORPORATION THAT HE HAD NO AUTHORITY TO CANCEL THE AWARD AND THAT ARRANGEMENTS SHOULD BE MADE PROMPTLY TO PAY THE CONTRACT PRICE AND TO REMOVE THE MATERIAL. THE CORPORATION FAILED TO DO SO AND IT WAS DECLARED IN DEFAULT. THE MATERIAL WAS RE-OFFERED UNDER SALES INVITATION NO. 15-010-S-58-19 AS ITEMS NOS. 53 (5,000 SOCKETS), 54 (15,114 SOCKETS), 55 (75,000 SOCKETS). THE HIGHEST OF THE BIDS RECEIVED WERE ?005 EACH, ON ITEMS NOS. 53 AND 54, AND ?0011 ON ITEM NO. 55. THUS, THE TOTAL AMOUNT RECEIVED FOR THE 95,114 SOCKETS WAS APPROXIMATELY $183. PURSUANT TO THE TERMS OF THE INVITATION, METRO ELECTRONICS CORPORATION WOULD BE LIABLE TO THE GOVERNMENT FOR THE LOSS INCURRED AND FOR STORAGE CHARGES, OR FOR A TOTAL AMOUNT IN EXCESS OF $1,250.

ORDINARILY, IN THE SALE OF SURPLUS PROPERTY, A WIDE VARIATION IN THE AMOUNTS OF THE BIDS MAY BE EXPECTED, DEPENDENT UPON THE NEEDS OF PROSPECTIVE PURCHASER, RESALE OPPORTUNITIES, ETC. THUS, THERE MAY BE SOME QUESTION AS TO WHETHER THE BID OF METRO ELECTRONICS CORPORATION ON ITEM NO. 43 WAS SO APPARENTLY OUT OF LINE WITH THE POTENTIAL VALUE OF THE MATERIAL OFFERED AS TO PREVENT THE ACCEPTANCE OF THE BID FROM CREATING A VALID AND BINDING CONTRACT. HOWEVER, THE FACT REMAINS THAT THE BID WAS APPROXIMATELY FIVE TIMES HIGHER THAN THE NEXT HIGH BID OF THE FIVE OTHER BIDS RECEIVED AND APPROXIMATELY EIGHT TIMES HIGHER THAN THE AMOUNT FOR WHICH THE MATERIAL WAS EVENTUALLY SOLD. IN THE CIRCUMSTANCES, AND SINCE IT WOULD APPEAR THAT THE BIDDER DID IN FACT MAKE AN ERROR IN THE BID AS ALLEGED AND THE GOVERNMENT WAS NOTIFIED THEREOF PROMPTLY UPON RECEIPT OF THE NOTICE OF AWARD, METRO ELECTRONICS CORPORATION MAY BE RELIEVED OF ALL LIABILITY UNDER THE TRANSACTION, AS RECOMMENDED BY THE CONTRACTING OFFICER.