B-143888, SEP. 14, 1960

B-143888, SEP. 14, 1960

TO THE SECRETARY OF LABOR:

REFERENCE IS MADE TO A LETTER DATED AUGUST 31, 1960, WITH ENCLOSURES, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, PERTAINING TO AN ERROR IN BID ALLEGED BY PAN AMERICAN OFFICE MACHINES CO., LOS ANGELES, CALIFORNIA, AFTER NOTICE OF AWARD OF CONTRACT DATED AUGUST 11, 1960, BASED ON THE BID.

BY INVITATION L-3731 (61) DATED JULY 15, 1960, THE DIVISION OF PROCUREMENT OFFERED THREE ITEMS OF SURPLUS "USED COMPUTING MACHINES" FOR "CASH SALE, INDEPENDENT OF THE PURCHASE OF NEW MACHINES, OR FOR TRADE-IN ALLOWANCE ON THE PURCHASE OF NEW MARCHANT MACHINES TO BE PURCHASED FROM THE FEDERAL SUPPLY SCHEDULE (CLASS 54, ISSUED BY THE FEDERAL SUPPLY SERVICE).' THE INVITATION STATED THAT "THE OFFER THAT IS THE MOST ADVANTAGEOUS TO THE U.S. GOVERNMENT WILL BE ACCEPTED.' THE INVITATION STATED ALSO THAT BIDS WOULD BE RECEIVED AT THE ISSUING OFFICE UNTIL 10 A.M., AUGUST 8, 1960, WHEN THE BIDS WOULD BE OPENED.

IN RESPONSE TO THE INVITATION, PAN AMERICAN OFFICE MACHINES CO. SUBMITTED A BID DATED AUGUST 5, 1960, WITH IDENTICAL QUOTATIONS OF $187.50 ENTERED ON THE BID FORM IN BOTH THE UNIT AND TOTAL PRICE BID COLUMNS OPPOSITE EACH OF THE THREE ITEMS. FIVE OTHER BIDS, RANGING FROM $90 TO $53.88, RESPECTIVELY, FOR THE THREE ITEMS WERE ALSO RECEIVED. THE BID OF PAN AMERICAN OFFICE MACHINES O., BEING THE HIGHEST, WAS ACCEPTED ON AUGUST 11, 1960, AND ON THE SAME DATE THE COMPANY WAS NOTIFIED OF THE ACCEPTANCE OF ITS OFFER.

THEREAFTER, BY LETTER DATED AUGUST 23, 1960, THE CONTRACTOR ADVISED THE DIVISION OF PROCUREMENT THAT IT HAD MADE A MISTAKE IN ITS BID, EXPLAINING THAT IT MEANT TO BID $87.50 AND NOT $187.50 AS ENTERED ON ITS BID. THE COMPANY CONTENDED THAT THE ERROR SHOULD HAVE BEEN APPARENT BECAUSE ITS PRICE OF $187.50 WAS OUT OF LINE WITH THE OTHER BIDS. THE COMPANY REQUESTED THAT EITHER THE ERROR BE RECTIFIED AND IT BE GIVEN THE MACHINES AT $87.50, OR THAT ITS BID BE CANCELED.

IN THE LETTER OF AUGUST 31 IT IS STATED THAT IT IS THE CONTRACTING OFFICER'S BELIEF THAT THERE IS INSUFFICIENT EVIDENCE TO SUPPORT THE PURCHASER'S ALLEGATION OF ERROR IN ITS BID. A DECISION IN THE MATTER IS, THEREFORE, REQUESTED.

WHILE IT MAY BE THAT PAN AMERICAN OFFICE MACHINES CO. MAY HAVE MADE AN ERROR IN ITS BID AS TO THE THREE ITEMS, AS ALLEGED, THE COMPANY HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT THEREOF. IN ANY EVENT IT IS CLEAR THAT ANY ERROR THAT MAY HAVE BEEN MADE WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT BUT WAS DUE SOLELY TO THE COMPANY'S OWN NEGLIGENCE IN THE PREPARATION OF ITS BID. THE ERROR, THEREFORE, WAS UNILATERAL--- NOT MUTUAL--- AND WOULD NOT ENTITLE THE PURCHASER TO ANY RELIEF UNLESS THE CIRCUMSTANCES WERE SUCH THAT IT MUST BE PRESUMED THAT THE CONTRACTING OFFICER WAS CHARGEABLE WITH NOTICE, EITHER ACTUAL OR CONSTRUCTIVE, OF SUCH ERROR SO AS TO MAKE HIS ACCEPTANCE AN ACT OF BAD FAITH.

THERE WAS NOTHING ON THE FACE OF THE BID TO INDICATE TO THE CONTRACTING OFFICER THAT THE PRICE OF $187.50 ON EACH OF THE THREE ITEMS WAS NOT AS INTENDED. FURTHERMORE, THIS WAS A SALE OF GOVERNMENT SURPLUS PROPERTY AND, ALTHOUGH THE BID OF THE COMPANY WAS CONSIDERABLY HIGHER THAN THE OTHER BIDS SUBMITTED, THAT FACT ALONE WOULD NOT BE SUFFICIENT TO CHARGE THE CONTRACTING OFFICER WITH NOTICE OF ERROR IN THE BID. IN VIEW OF THE WIDE RANGE OF BIDS ORDINARILY RECEIVED ON GOVERNMENT SURPLUS PROPERTY--- BASED MORE OR LESS UPON THE USE TO WHICH THE PROPERTY IS TO BE PUT BY THE PARTICULAR BIDDER OR THE CHANCES IT MIGHT WISH TO TAKE FOR RESALE THEREOF- -- 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, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES, ETC., TO BE FURNISHED THE GOVERNMENT. SEE 28 COMP. GEN. 550, 551; ALSO UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 689.

FOR THESE REASONS AND SINCE THE BID WAS REGULAR ON ITS FACE AND SINCE NO ERROR WAS ALLEGED BY THE BIDDER UNTIL AFTER AWARD OF THE SALE CONTRACT, IT MUST BE HELD THAT THE CONTRACTING OFFICER WAS WITHOUT ACTUAL OR CONSTRUCTIVE NOTICE OF ANY ERROR AND THAT HIS ACCEPTANCE OF THE BID WAS IN GOOD FAITH. SUCH ACCEPTANCE, THEREFORE, RESULTED IN A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES THERETO AND VESTED IN THE GOVERNMENT RIGHTS WHICH NO OFFICER OR AGENT OF THE GOVERNMENT IS AUTHORIZED TO WAIVE OR RELEASE. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AND AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75.

ACCORDINGLY, THERE IS NO LEGAL BASIS FOR RELIEVING PAN AMERICAN OFFICE MACHINES CO. FROM ITS OBLIGATIONS UNDER THE SALE CONTRACT AWARDED PURSUANT TO INVITATION NO. L-3731 (61).

THE ENCLOSURES FORWARDED WITH THE LETTER OF AUGUST 31 ARE RETURNED, AS REQUESTED.