B-144289, NOV. 17, 1960

B-144289, NOV. 17, 1960

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 19, 1960, FROM THE DEPUTY THE QUARTERMASTER GENERAL, REQUESTING OUR DECISION ON WHETHER CONTRACT NO. DA/S/-92-557-FEC-33527, WHICH WAS BASED UPON THE BID SUBMITTED BY NARITA SHOTEN ON ITEM 18, INVITATION FOR BIDS NO. 92-557-S 60-372, MAY BE CANCELLED BECAUSE OF AN ALLEGED ERROR IN SUCH BID.

THE RECORD SUBMITTED TO THIS OFFICE INDICATES THAT ITEM 18 OF THE INVITATION DESCRIBED ONE ,CRANE: 7,500 POUNDS MAXIMUM LIFT CAPACITY, DESIGNED FOR END MOUNTING ON CATERPILLAR D7 TRACTORS, HYSTER MODEL HYSTAWAY HW SERIAL NO. HW54668, ACQUISITION COST $8,056.00. (USED).' BIDS FOR THE PURCHASE OF ITEMS DESCRIBED IN THE INVITATION WERE OPENED ON JUNE 21, 1960, AND THE BID ON ITEM 18 SUBMITTED BY NARITA SHOTEN, IN THE AMOUNT OF 1,150,000 YEN WAS FOUND TO BE HIGHEST. FOUR OTHER BIDS, IN THE AMOUNTS OF 541,760 YEN, 360,000 YEN, 345,240 YEN, AND 156,000 YEN WERE ALSO RECEIVED ON ITEM 18. CONTRACT NO. DA/S/-92-557-FEC 33527 WAS THEREFORE AWARDED TO NARITA SHOTEN AT ITS BID PRICE ON JUNE 27, 1960.

ON JUNE 28, 1960, THE CONTRACTING OFFICER RECEIVED A LETTER DATED JUNE 27 FROM EICHI NARITA (WHO APPEARS TO BE THE SOLE PROPRIETOR OF NARITA SHOTEN) IN WHICH THE BIDDER EXPLAINED THAT HIS NEED WAS FOR A TRUCK MOUNTED CRANE, THAT HE HAD NO USE FOR AN UNMOUNTED CRANE, AND THAT HE HAD INTENDED TO SUBMIT HIS BID ON ITEM 8 OF IFB 92-557-S-60 368, WHICH DID DESCRIBE A TRUCK MOUNTED CRANE AND ON WHICH BIDS WERE OPENED ON JUNE 20, 1960. THIS LETTER REQUESTED RETURN OF THE BID DEPOSIT BECAUSE OF THE ALLEGED ERROR. IT ALSO REFERRED TO A CONVERSATION WITH THE CONTRACTING OFFICER ON THE PREVIOUS FRIDAY (WHICH IS ASSUMED TO BE JUNE 24 AND WOULD THEREFORE BE PRIOR TO DATE OF AWARD) IN WHICH THE BIDDER ALLEGED ERROR. HOWEVER, INVESTIGATION HAS FAILED TO INDICATE THAT THE BIDDER SPOKE TO ANYONE CONNECTED WITH THE SALE OF ITEM 18 ON THAT DATE, AND SUBSEQUENT STATEMENTS BY THE BIDDER ON OCTOBER 4 ARE TO THE EFFECT THAT HE NO LONGER REMEMBERS HAVING SPOKEN TO THE CONTRACTING OFFICER.

IN INTERVIEWS ON JULY 18, 1960, THE BIDDER ADVISED THAT HE HAD SUBMITTED HIS BID WITHOUT INSPECTING THE CRANE, THAT HE HAD RELIED UPON THE DESCRIPTION IN THE IFB, AND THAT HIS LETTER DATED JUNE 27, 1960, WAS COMPLETELY WRONG AND THE ERRONEOUS INFORMATION THEREIN PROBABLY RESULTED FROM INADEQUATE INSTRUCTIONS TO A NEW CLERK. THE EXPLANATION GIVEN ON JULY 18 OF THE MANNER IN WHICH THE ALLEGED ERROR OCCURRED WAS THAT, BECAUSE OF THE BIDDERS' INABILITY TO READ ENGLISH, HE REFERRED TO A JAPANESE PUBLICATION ENTITLED "ADVANCE MEMORANDUM OF YOKOHAMA SHOKO KENKYUKAI" AND READ THE DESCRIPTION PUBLISHED THEREIN AS FOLLOWS:

"CRANE (LOT 1503) ACQUISITION COST $8,056. 7,500 LBS. CATERPILLAR CO. FOR D-7 TRACTOR.'

HE ADVISES THAT HE INTERPRETED THIS AS DESCRIBING A COMPLETE CRANE, RATHER THAN ONE WHICH DID NOT INCLUDE AN ENGINE AND OTHER ACCESSORIES.

IN VIEW OF THESE STATEMENTS ON JULY 18, IT WOULD APPEAR THAT THE EXPLANATION OF THE MANNER IN WHICH THE ERROR OCCURRED, AS SET OUT IN THE LETTER DATED JUNE 27, MAY BE DISREGARDED, AND OUR DECISION MAY PROPERLY BE BASED UPON THE BIDDER'S SUBSEQUENT EXPLANATION THAT HE MISINTERPRETED THE DESCRIPTION IN THE ADVANCE MEMORANDUM OF YOKOHAMA SHOKO KENKYUKAI. WHILE THE DESCRIPTION OF ITEM 18 IN THE ADVANCE MEMORANDUM IS NOT AS COMPLETE AS THAT IN THE IFB, AND WOULD THEREFORE APPEAR TO BE MORE SUSCEPTIBLE TO THE MISINTERPRETATION ALLEGED BY THE BIDDER, THERE IS NO INDICATION THAT THIS PUBLICATION HAS ANY OFFICIAL CONNECTION WITH THE GOVERNMENT OF THE UNITED STATES OR THAT THE MANNER IN WHICH ITEM 18 WAS DESCRIBED THEREIN IS ATTRIBUTABLE TO EMPLOYEES OF THE GOVERNMENT. WHILE BIDDERS WITH LITTLE OR NO KNOWLEDGE OF THE ENGLISH LANGUAGE MAY BE EXPECTED TO RELY ON PUBLICATIONS OF THIS NATURE FOR INFORMATION RELATIVE TO SURPLUS MATERIALS OFFERED FOR SALE BY THE GOVERNMENT, ANY RELIANCE ON THE ACCURACY OF THE DESCRIPTIONS CONTAINED THEREIN IS SOLELY AT THE RISK OF THE BIDDER. VIEW THEREOF, AND IN VIEW OF THE BIDDERS' ADMISSION THAT HE FAILED TO INSPECT THE ARTICLE DESCRIBED IN ITEM 18 BEFORE SUBMITTING A BID, AS BIDDERS WERE INVITED AND URGED TO DO UNDER THE PROVISIONS OF PARAGRAPH 1 OF THE GENERAL SALE TERMS AND CONDITIONS, THE BIDDER'S ERROR, INSOFAR AS IT RESULTED FROM RELIANCE ON THE ADVANCE MEMORANDUM, MUST BE CONSIDERED UNILATERAL. SEE OUR DECISION OF APRIL 14, 1959, B 139193, TO THE SECRETARY OF THE NAVY ON THIS POINT.

CONCERNING THE QUESTION WHETHER THE CONTRACTING OFFICER MAY BE CHARGED WITH CONSTRUCTIVE NOTICE OF ERROR, THE DIFFERENCE BETWEEN THE HIGH AND SECOND HIGH BIDS IS NOT, IN OUR OPINION, SUFFICIENTLY GREAT TO CHARGE NOTICE OF ERROR. ADDITIONALLY, THE REPORT FROM THE OFFICE OF THE QUARTERMASTER GENERAL POINTS OUT THAT THE PRICE BID BY NARITA SHOTEN REPRESENTED A RETURN OF 39.7 PERCENT ON THE PROPERTY, AND THAT SUCH RETURN WAS NOT UNUSUALLY HIGH WHEN COMPARED TO SALES OF ITEMS OF LIKE CATEGORY IN THE PREVIOUS SIX MONTHS WHICH RESULTED IN RETURNS OF 49.2 PERCENT AND 53 PERCENT.

WE ASSUME THAT THE AWARD ACTION BY THE CONTRACTING OFFICER ON JUNE 27, 1960, CONSTITUTED A FULL COMPLIANCE WITH THE PROVISIONS OF PARAGRAPH 21 OF THE GENERAL SALES TERMS AND CONDITIONS. IF SUCH ASSUMPTION IS CORRECT, IT IS OUR OPINION THAT THE AWARD MUST BE CONSIDERED AS HAVING BEEN ACCOMPLISHED IN GOOD FAITH; THAT THE RECORD INDICATES THAT ERROR IN THE BID WAS NOT ALLEGED UNTIL AFTER AWARD; AND, SINCE ANY ERROR ON THE PART OF THE BIDDER WAS UNILATERAL, THE RIGHTS AND OBLIGATIONS OF THE PARTIES VESTED AND WERE FIXED BY THE AWARD. SEE UNITED STATES V. PURCELL ENVELOPE COMPANY, 249 U.S. 313; AMERICAN SMELTING AND REFINING COMPANY V. UNITED STATES, 259 U.S. 75; UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683.

ACCORDINGLY, THERE WOULD APPEAR TO BE NO LEGAL BASIS FOR AUTHORIZING CANCELLATION OF CONTRACT NO. DA/S/-92-557-FEC-33527, AND THE CONTRACTOR SHOULD BE SO ADVISED.

THE ENCLOSURES RECEIVED WITH THE DEPUTY THE QUARTERMASTER GENERAL'S LETTER ARE RETURNED.