B-140298, AUG. 3, 1959

B-140298, AUG. 3, 1959

TO THE SECRETARY OF THE NAVY:

REFERENCE IS MADE TO A LETTER (R11.2 L8) L8/NT4-28), DATED JULY 23, 1959, WITH ENCLOSURES, FROM THE ASSISTANCE CHIEF FOR PURCHASING, BUREAU OF SUPPLIES AND ACCOUNTS, REQUESTING A DECISION AS TO WHETHER SALES CONTRACT NO. N228S-39741 MAY BE CANCELED BECAUSE OF AN ERROR THE CONTRACTOR, SIERRA SCRAP AND SALVAGE, RENO, NEVADA, ALLEGES IT MADE IN ITS BID ON WHICH THE CONTRACT WAS BASED.

THE NAVAL SUPPLY CENTER, OAKLAND, CALIFORNIA, BY SALES INVITATION NO. B- 219-59-228, ISSUED MAY 7, 1959, SOLICITED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF CERTAIN MISCELLANEOUS USABLE SURPLUS MATERIAL DESCRIBED THEREIN. IN RESPONSE TO THE INVITATION, SIERRA SCRAP AND SALVAGE SUBMITTED, AMONG OTHERS, A BID OF ".007" PER FOOT AND AN EXTENDED TOTAL PRICE OF "17.01" FOR THE LOT OF WIRE--- 24,300 FEET--- IN ITEM NO. 24, DESCRIBED AS:

"WIRE, AWG CABLE DEMO. SINGLE CONDUCTION, RUBBER COATED COPPER. ACQUISITION: $2,430.00. APPARENTLY UNUSED - IN GOOD CONDITION. EST. WT. 460 LBS. CUBE 24. OPEN ROLLS--- NOT PACKED FOR SHIPMENT.' THE ABSTRACT OF BIDS SHOWS THAT SEVEN OTHER BIDS--- RANGING FROM $0.003786 TO $0.00011 PER FOOT--- WERE RECEIVED ON ITEM NO. 24. APPARENTLY, BECAUSE THE TOTAL PRICE INSERTED IN THE BID OF SIERRA SCRAP AND SALVAGE FOR ITEM NO. 24 DID NOT AGREE WITH THE SPECIFIED UNIT PRICE MULTIPLIED BY THE STIPULATED QUANTITY, THE SALES CONTRACTING OFFICER CHANGED THE TOTAL BID PRICE TO "$170.10.' THE BID OF SIERRA SCRAP AND SALVAGE ON ITEM NO. 24, AS CHANGED, BEING THE HIGHEST BID RECEIVED, WAS ACCEPTED AND SALE OF THE MATERIAL IN THAT ITEM WAS AWARDED TO THAT FIRM IN THE TOTAL AMOUNT OF $170.10 ON CONTRACT NO. N228S-39741, AND THE CONTRACT AND INSTRUCTIONS WERE MAILED TO THE PURCHASER ON JUNE 4, 1959.

THEREAFTER, BE LETTER DATED JUNE 10, 1959, TO THE CONTRACTING OFFICER, SIERRA SCRAP AND SALVAGE CLAIMED THAT AN ERROR HAD BEEN MADE IN ITS BID ON ITEM NO. 24, ALLEGING THAT THE UNIT PRICE SHOULD HAVE READ ".0007" PER FOOT INSTEAD OF ".007" AS SHOWN ON ITS BID, THAT ITS EXTENDED TOTAL OF $17.01 WAS CORRECT, AND THAT ITS BID DEPOSIT WAS COMPUTED ON THE BASIS OF THAT TOTAL FOR ITEM NO. 24. THE PURCHASER REQUESTED ADJUSTMENT OF THE ERROR IN ITS BID PRICE AND THE SALE CONTRACT PRICE OR, IF THERE WAS A HIGHER BIDDER, THAT THE MATERIAL BE AWARDED TO THAT BIDDER. IN LETTER DATED JULY 18, 1959, RECEIVED BY THE NAVAL SUPPLY CENTER ON JUNE 19, 1959, THE PURCHASER EXPLAINED THAT ITS TOTAL BID OF $17.01 ON ITEM NO. 24 WAS BASED ON THE SCRAP VALUE OF RECLAIMABLE COPPER AND THAT THE ERROR IN ITS BID RESULTED FROM A MISPLACED DECIMAL POINT IN ITS CALCULATION OF THE UNIT PRICE AS ".007" INSTEAD OF ".0007.' IN SUBSTANTIATION OF ITS CLAIM OF ERROR THE PURCHASER SUBMITTED ITS WORKSHEET, WHICH CONFIRMS THE ERROR, AS ALLEGED.

THE CONTRACTING OFFICER REPORTS THAT THE CLAIMANT'S BID OF $0.007 PER FOOT ON ITEM NO. 24 IS 1.85 TIMES HIGHER THAN THE NEXT LOWER BID RECEIVED; THAT SHOULD THE CLAIMANT'S BID BE CORRECTED AS REQUESTED IT WOULD NOT BE THE HIGHEST; THAT THE TAPE SUBMITTED WITH THE LETTER OF JULY 18 SHOWS THAT AN ERROR WAS MADE BY THE BIDDER IN ITS DECIMAL POINT PLACEMENT; AND, FURTHER, THAT THE DEPOSIT ACCOMPANYING ITS BID WAS BASED ON ITS TOTAL BID PRICE OF $17.01 FOR ITEM NO. 24. THE CONTRACTING OFFICER RECOMMENDS THAT THE AWARD OF ITEM NO. 24 TO SIERRA SCRAP AND SALVAGE BE CANCELED WITHOUT PENALTY TO IT.

ERROR AS TO ITEM NO. 24 IS APPARENT ON THE FACE OF CLAIMANT'S BID, SINCE THE UNIT PRICE OF $0.007 WHEN MULTIPLIED BY THE QUANTITY OF 24,300 DOES NOT EQUAL THE AMOUNT OF $17.01 EXTENDED IN THE TOTAL COLUMN OF ITS BID. HOWEVER, IF THE UNIT PRICE OF $0.0007, CLAIMED BY THE PURCHASER AS ITS INTENDED UNIT PRICE, IS MULTIPLIED BY THE QUANTITY SPECIFIED FOR ITEM NO. 24 THE TOTAL WILL BE $17.01, THE SAME AMOUNT SHOWN ON ITS BID IN THE TOTAL COLUMN FOR THAT ITEM. IN THE CIRCUMSTANCES, THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF POSSIBLE ERROR IN THE BID, AND THE BIDDER SHOULD HAVE BEEN REQUESTED TO VERIFY ITS BID BEFORE THE ACCEPTANCE THEREOF.

WHILE THE INVITATION TO BID PROVIDED IN PARAGRAPH 3 OF THE GENERAL SALE TERMS AND CONDITIONS THAT, IN CASE OF ERROR IN THE EXTENSION OF PRICES IN THE BID, THE UNIT PRICES WOULD GOVERN, AND WHILE IT HAS BEEN HELD THAT THERE IS NO DUTY UPON THE CONTRACTING OFFICER TO COMPUTE THE EXTENSIONS OF UNIT PRICES CONTAINED IN BIDS IN ORDER TO DETERMINE THE CORRECTNESS OF SUCH EXTENSIONS, THAT PRINCIPLE CLEARLY IS NOT FOR APPLICATION WHERE, AS HERE, AN ERROR IN EITHER THE UNIT PRICE OR THE TOTAL PRICE IS APPARENT ON THE FACE OF THE BID AND THE CONTRACTING OFFICER IS ON NOTICE OF SUCH ERROR PRIOR TO AND AT THE TIME OF MAKING THE AWARD. SEE 15 COMP. GEN. 746.

ACCORDINGLY, CONTRACT NO. N228S-39741 MAY BE CANCELED WITHOUT LIABILITY TO THE COMPANY AND, THEREFORE, REFUND OF ANY MONEY ADVANCED OR PAID UNDER THE SALES TRANSACTION SHOULD BE MADE TO THE PURCHASER.