B-144921, FEB. 10, 1961

B-144921, FEB. 10, 1961

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION

REFERENCE IS MADE TO A LETTER DATED JANUARY 27, 1961, WITH ENCLOSURES, FROM THE ACTING ADMINISTRATOR, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY MR. E. H. BARNEY TO HAVE BEEN MADE IN HIS BID WHICH WAS ACCEPTED ON JUNE 11, 1960.

THE FEDERAL SUPPLY SERVICE, U.S. NAVAL AIR STATION, SEATTLE, WASHINGTON, ISSUED AN ANNOUNCEMENT OF A "SPOT BID" SALE OF 36 USED GOVERNMENT VEHICLES, SALE NO. GS-FSS-10-60-24. ITEM 21 COVERED ONE 1954 WILLYS STATION WAGON, 4 BY 4, FOUR CYLINDER.

UPON BID OPENING IT WAS FOUND THAT THE HIGH BID OF $1,096 FOR THE 1954 WILLYS STATION WAGON, ITEM 21 OF THE INVITATION, WAS SUBMITTED BY MR. E. H. BARNEY. BY NOTICE OF SALE NO. 23937 DATED JUNE 11, 1960, MR. BARNEY WAS ADVISED THAT HE HAD BEEN AWARDED ITEM 21.

IT IS REPORTED THAT MR. BARNEY RETURNED THE COPY OF THE NOTICE OF SALE TO THE CONTRACTING OFFICER AND ON THE REVERSE SIDE THEREOF HE WROTE THAT A TYPOGRAPHICAL ERROR MUST HAVE BEEN MADE ON THE NOTICE OF SALE SINCE HE HAD QUOTED A PRICE OF $196 AND NOT $1,096 FOR THE 1954 WILLYS STATION WAGON COVERED BY ITEM 21. BY LETTER DATED JUNE 21, 1960, THE CONTRACTING OFFICER FORWARDED A COPY OF MR. BARNEY'S BID CARD TO HIM WHICH SHOWED A BID PRICE OF $1,096 AND HE ADVISED MR. BARNEY THAT HE HAD NO AUTHORITY TO CHANGE THE CONTRACT PRICE OF ITEM 21 OR TO CANCEL THE CONTRACT. MR. BARNEY WAS ALSO ADVISED THAT HE SHOULD COMPLY WITH THE TERMS OF THE CONTRACT BY SUBMITTING PAYMENT AND REMOVING THE VEHICLE. IN A CONFIRMING LETTER DATED JUNE 27, 1960, MR. BARNEY STATED THAT HE COULD NOT COMPLY WITH THE TERMS OF THE CONTRACT AS HE HAD NO INTENTION OF BIDDING MORE THAN $196 ON THE VEHICLE COVERED BY ITEM 21; THAT HE HAD SHOPPED FOR VEHICLES, NAMELY 4 BY 4-S, AND THAT HE COULD PROCURE SOME OF THEM AT A LITTLE MORE THAN HIS INTENDED BID PRICE OF $196. WITH HIS LETTER MR. BARNEY SUBMITTED A COPY OF A LETTER DATED JUNE 22, 1960, WHICH HE HAD RECEIVED FROM A PERSON WHO OFFERED TO SELL HIM A WILLYS PICK-UP AND A BOTO-TILLER FOR A PRICE OF $700. IN HIS LETTER MR. BARNEY STATED THAT THE WILLYS PICK UP WAS ADVERTISED FOR $350. IN A LETTER DATED JULY 6, 1960, MR. BARNEY REQUESTED THAT THE CONTRACT BE CANCELED AND HE STATED THAT HE DID NOT HAVE ANY WORKSHEETS TO SUPPORT HIS INTENDED BID PRICE.

IN A MEMORANDUM DATED OCTOBER 28, 1960, FROM THE REGIONAL COUNSEL TO THE GENERAL COUNSEL, IT IS STATED THAT IN CASES OF SPOT BID SALES NO ABSTRACT OF BIDS IS MADE; AND THAT THE HIGH BID IS IDENTIFIED AND AWARD IS MADE PROMPTLY WITHOUT EXAMINATION OF BIDS FOR POSSIBLE ERROR. IN HIS FINDINGS AND RECOMMENDATIONS DATED OCTOBER 25, 1960, IN WHICH HE RECOMMENDED CANCELLATION OF THE CONTRACT, THE CONTRACTING OFFICER STATES THAT THE OFFER OF $1,096 BY MR. BARNEY FOR A 1954 WILLYS STATION WAGON WAS SUFFICIENTLY HIGHER THAN THE MARKET VALUE AND OTHER BIDS TO HAVE BEEN NOTED AND QUESTIONED AS A POSSIBLE ERROR HAD THIS BEEN A SEALED BID SALE; AND THAT TRANSACTIONS DURING "SPOT BID" AND "AUCTION" SALES MOVE TOO FAST FOR EVALUATION OF INDIVIDUAL OFFERS FOR POSSIBLE ERRORS. THE CONTRACTING OFFICER REPORTS THAT THE PRICING DATA ON THE VEHICLE COVERED BY ITEM 21 IS AS FOLLOWS:

"PRICING DATA ON THIS SPECIFIC VEHICLE, WHICH WAS PREPARED BEFORE THE SALE, IS AS FOLLOWS: (1) NADA AVERAGE WHOLESALE $555, (2) KELLEY BLUE BOOK WHOLESALE $400, (3) UPSET PRICE ESTABLISHED BY THE SALES OFFICER $575 AND (4) DESIRED PRICE ESTABLISHED BY THE SALES OFFICER $700.'

THE SUMMARY OF THE SPOT BID CARDS RECEIVED SHOWS THAT THE 35 OTHER BIDS ON ITEM 21 RANGED FROM $810 TO $101.11. IN REGARD TO THE BID PRICE OF $810 QUOTED BY THE NEXT HIGHEST BIDDER ON ITEM 21, THE CONTRACTING OFFICER STATES THAT IT IS HIS OPINION THAT SUCH PRICE IS ALSO TOO HIGH FOR THE VEHICLE IN QUESTION. ORDINARILY A MERE DIFFERENCE IN THE PRICES QUOTED BY BIDDERS FOR SURPLUS PROPERTY OR MATERIALS OFFERED FOR SALE IS NOT SUFFICIENT TO PLACE A CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. WE BELIEVE, HOWEVER, THAT INASMUCH AS THE VEHICLE IN QUESTION HAS AN ESTABLISHED COMMERCIAL VALUE AS EVIDENCED BY THE KELLEY BLUE BOOK, THE CONTRACTING OFFICER SHOULD HAVE SUSPECTED PROBABLE ERROR IN THE BID AND REQUESTED VERIFICATION OF THE BID BEFORE AWARDING THE CONTRACT. ACCORDINGLY, MR. BARNEY MAY BE RELIEVED FROM HIS OBLIGATION UNDER THE CONTRACT AND THE AWARD AS MADE MAY BE CANCELED.