B-146100, SEP. 21, 1961

B-146100, SEP. 21, 1961

TO THE SECRETARY OF THE ARMY:

REFERENCE IS MADE TO LETTER OF JUNE 8, 1961, WITH ENCLOSURES, FROM THE DEPUTY THE QUARTERMASTER GENERAL REQUESTING A DECISION WITH RESPECT TO A REQUEST BY AUTOMOTIVE PARTS COMPANY THAT AN AWARD TO IT OF ITEMS NUMBERED 98, 99, 100, 101 AND 103 UNDER SPOT BID SALE 09-030-S-61-24, BE RESCINDED.

THE INVOLVED INVITATION, ISSUED BY THE ATLANTA GENERAL DEPOT, FOREST PARK, GEORGIA, REQUESTED BIDS ON VARIOUS ITEMS OF SURPLUS PROPERTY LOCATED AT SEVERAL DEPOTS AND INSTALLATIONS. THE INVITATION CONTAINED THE USUAL DISCLAIMER OF WARRANTY PROVISIONS AND STATED THAT THE DESCRIPTION WAS BASED ON THE BEST AVAILABLE INFORMATION. IT PROVIDED THAT THE SALE WAS TO BE CONDUCTED BY THE SUBMISSION OF SPOT BIDS AND THAT THE SALE WOULD TAKE PLACE AT 9:00 A.M., E.S.T., TUESDAY, FEBRUARY 7, 1961. THE INVITATION FURTHER PROVIDED THAT "THE ANNOUNCEMENT OF THE HIGHEST BID DOES NOT CONSTITUTE AN AWARD AS THE BID CARDS ON EACH ITEM WILL BE RECHECKED AND VERIFIED AS TO RECTNESS," AND THAT "WRITTEN NOTICES OF AWARDS WILL BE FURNISHED THE SUCCESSFUL BIDDERS AS SOON AS THE RECAPITULATION OF ALL BIDS HAS BEEN COMPLETED.'

AUTOMOTIVE PARTS COMPANY, ALTHOUGH IT HAD NOT INSPECTED THE MATERIAL AS URGED IN THE GENERAL SALE TERMS AND CONDITIONS, SUBMITTED THE HIGH UNIT PRICE BIDS OF $2.635, $2.75, $2.815, $2.855 AND $2.875 ON ITEMS NUMBERED 98, 99, 100, 101 AND 103, RESPECTIVELY, CONSISTING OF VARYING QUANTITIES OF DISTRIBUTOR ASSEMBLIES DESCRIBED IN THE INVITATION AS "UNUSED--- GOOD CONDITION.' THE NEXT HIGH BIDS FOR THE SAME ITEMS WERE $2.23, $2.29, $2.55, $2.56 AND $2.11, RESPECTIVELY.

THE CONTRACTING OFFICER HAS REPORTED THAT THE INVOLVED ITEMS WERE LISTED IN THE "TURN IN DOCUMENT" BY THE PROPERTY DISPOSAL OFFICER AS BEING IN "CONDITION 1" A CODE DESIGNATION, MEANING THAT THE PROPERTY, WHETHER NEW OR USED, IS SERVICEABLE AND AVAILABLE FOR IMMEDIATE UNLIMITED USE; THAT PRIOR TO THE TIME THE PARTS WERE REPORTED FOR SALE A NUMBER OF THE CONTAINERS WERE OPENED AND THE PARTS WERE FOUND TO BE PACKED IN COSMOLINE WHICH LED THE PROPERTY DISPOSAL OFFICER TO BELIEVE THAT THE PARTS WERE NEW AND UNUSED; AND THAT ACCORDINGLY THE PARTS WERE SO REPORTED TO THE CONSOLIDATED SURPLUS SALES OFFICE AND WERE SO LISTED IN THE INVITATION FOR BIDS. THE CONTRACTING OFFICER HAS FURTHER REPORTED THAT THE SALE WAS COMMENCED AT 9:30 A.M., FEBRUARY 7, 1961; THAT AT APPROXIMATELY 11:45 A.M. WHEN A LUNCH BREAK WAS TAKEN THE FIRST 165 ITEMS OF SALE 61-24 HAD BEEN OFFERED; THAT HE HAD NO PERSONAL KNOWLEDGE OR SUSPICION THAT ANY OF THE ITEMS WERE OTHER THAN DESCRIBED IN THE INFORMATION TO THE BIDDERS UNTIL ONE OF THE BIDDERS PRESENT ADVISED HIM DURING THE LUNCHEON RECESS THAT THE INVOLVED ITEMS WERE NOT UNUSED AS SHOWN IN THE INVITATION; THAT HE THEN REQUESTED THE PROPERTY DISPOSAL OFFICER AT THE ATLANTA GENERAL DEPOT WHO REPORTED THE ITEMS FOR DISPOSAL TO CHECK THEM, THAT AT APPROXIMATELY 12:30 HE WAS INFORMED BY THAT OFFICER THAT THE ITEMS WERE IN FACT USED AND NOT UNUSED AS DESCRIBED IN THE INVITATION; THAT THIS INFORMATION WAS CONVEYED TO HIM AFTER HE HAD COMPLETED "NOTICE OF AWARD, RELEASE DOCUMENT, AND STATEMENT," FROM 2332, ADDRESSED TO THE AUTOMOTIVE PARTS COMPANY. THE CONTRACTING OFFICER HAS EXPLAINED THAT SINCE THE USED CONDITION OF THE PARTS WAS NOT KNOWN BY HIM PRIOR TO THE EXECUTION OF FORM 2332, HE WAS OF THE OPINION THAT THE AWARD HAD BEEN COMPLETED AND THAT HE HAD NO AUTHORITY TO RESCIND THE

BY LETTER DATED FEBRUARY 13, 1961, THE CONTRACTOR ACKNOWLEDGED RECEIPT OF THE NOTICE OF AWARD DATED FEBRUARY 7, 1961, AND ENCLOSED A CHECK FOR $3,162.03 AS THE BALANCE DUE ON THE PARTS. AT THE SAME TIME IT ADVISED THAT IT HAD ASSIGNED THE PARTS TO ANOTHER FIRM WHICH WOULD MAKE ARRANGEMENTS TO PICK UP THE MATERIAL. BY LETTER DATED MARCH 1, 1961, THE CONTRACTOR ADVISED THE DISPOSAL OFFICER THAT UPON RECEIVING THE MATERIAL IT WAS FOUND UPON INSPECTION THAT ALMOST 90 PERCENT OF THE TOTAL QUANTITY OF 1,474 PIECES WERE USED AND UNSERVICEABLE AND THAT IT COULD NOT ACCEPT THE MATERIAL UNDER ANY CIRCUMSTANCES.

WHILE THERE IS NO SHOWING IN THE CONTRACTING OFFICER'S STATEMENTS OR THE ADMINISTRATIVE REPORT AS TO THE TIME AND DATE OF MAILING OF THE NOTICE OF AWARD IT HAS BEEN REPORTED INFORMALLY THAT THE ATLANTA CONSOLIDATED SURPLUS SALES OFFICE HAS REPORTED THAT THE NOTICE OF AWARD HAD NOT BEEN MAILED OR DELIVERED PRIOR TO THE TIME THE CONTRACTING OFFICER WAS INFORMED THAT THE ITEMS WERE USED AND NOT UNUSED AS DESCRIBED IN THE INVITATION. THUS, IT APPEARS THAT THE GOVERNMENT HAD NOTICE OF THE ERROR IN THE DESCRIPTION OF THE MATERIAL PRIOR TO THE AWARD. THE CONTRACTING OFFICER, IN EXPLANATION OF HIS ACTION IN COMPLETING DA FORM 2332 (NOTICE OF AWARD, RELEASE DOCUMENT, AND STATEMENT) STATED THAT HE ACTED UNDER AN ERRONEOUS APPLICATION OF THE RULE IN 37 COMP. GEN. 75 THAT IN A SPOT SALE THE ANNOUNCEMENT OF THE HIGH BID CONSTITUTED AN AWARD.

IN THE CITED CASE THE INVITATION PROVIDED THAT THE AWARD OF SPOT BID SALE ITEMS WOULD BE MADE ,IMMEDIATELY TO THE HIGHEST ACCEPTABLE RESPONSIVE BIDDER; " THAT EACH SPOT BID SALE ITEM WOULD BE ,CONSIDERED, AWARDED AND PUBLICLY ANNOUNCED" BEFORE CONSIDERATION OF THE NEXT SALE ITEM; THAT THE SUCCESSFUL BIDDERS WOULD RECEIVE NOTICE OF AWARD ON FORM SB-7; AND THAT AWARD OF EACH SALE ITEM WOULD BE MADE TO THE HIGHEST ACCEPTABLE RESPONSIVE BIDDER IMMEDIATELY AFTER CONSIDERATION OF ALL BIDS RECEIVED FOR EACH SALE ITEM. IN THE CITED CASE THE CONTRACTING OFFICER REPORTED THAT AT THE TIME THE SALE WAS ANNOUNCED IT WAS STATED THAT THE ANNOUNCEMENT OF THE HIGH BIDDER ON ANY ITEM WOULD NOT CONSTITUTE AN AWARD. IN COMMENTING ON THIS STATEMENT WE OBSERVED, HOWEVER, THAT IT APPEARED TO US THE PROVISIONS OF THE INVITATION CONTEMPLATED THAT THE ANNOUNCEMENT OF THE HIGH BIDDER WAS INTENDED TO CONSTITUTE AN AWARD SUBJECT TO EXCEPTION ONLY IF FOR SOME REASON THE BIDDER WAS NOT ELIGIBLE TO PURCHASE THE PROPERTY.

IT IS OUR VIEW THAT THE CASE REPORTED IN 37 COMP. GEN. 75 AND THE PRESENT CASE ARE CLEARLY DISTINGUISHABLE. IN THE CITED CASE THE TERMS AND CONDITIONS RELATING TO THE MANNER OF AWARD SHOW A PURPOSE TO FINALIZE THE SALE AND AWARD OF EACH ITEM BEFORE PROCEEDING WITH THE NEXT ITEM. OTHER WORDS, AS WE POINTED OUT, THE INVITATION IN THAT CASE CONTEMPLATED THAT THE ANNOUNCEMENT OF THE HIGH BIDDER WAS INTENDED TO CONSTITUTE AN AWARD. WHILE IN THE PRESENT CASE THE PROVISIONS OF THE INVITATION PROVIDED FOR THE OFFER OF EACH ITEM SEPARATELY AND FOR ANNOUNCEMENT OF THE HIGHEST BID THEREON PRIOR TO SALE OF THE NEXT ITEM, THERE ARE NO PROVISIONS SUCH AS WERE CONTAINED IN THE CITED CASE PROVIDING FOR IMMEDIATE AWARD TO THE HIGHEST ACCEPTABLE RESPONSIVE BIDDER AND FOR CONSIDERATION, AWARD AND PUBLIC ANNOUNCEMENT BEFORE CONSIDERATION OF THE NEXT SALE ITEM. THE ABSENCE OF SUCH PROVISIONS, AND THE FACT THAT THE PROVISIONS OF THE INVITATION IN THE PRESENT CASE SPECIFICALLY STATED THE ANNOUNCEMENT OF THE HIGHEST BID WOULD NOT CONSTITUTE AN AWARD, THAT WRITTEN NOTICES OF AWARD WOULD BE FURNISHED THE SUCCESSFUL BIDDERS FOLLOWING COMPLETION OF THE RECAPITULATION OF ALL BIDS, AND THAT NO SALE RESULTS WOULD BE MADE AVAILABLE ON THE DATE OF THE SALE, REASONABLY LEAD TO THE CONCLUSION THAT THE ANNOUNCEMENT OF THE HIGHEST BIDS ON THE INVOLVED ITEMS DID NOT CONSTITUTE AN AWARD.

ACCORDINGLY, AND SINCE THE NOTICE OF AWARD WAS MAILED AFTER THE CONTRACTING OFFICER HAD VERIFIED THAT THE MATERIAL WAS NOT UNUSED AS DESCRIBED IN THE INVITATION, THE ACCEPTANCE OF THE BID UNDER SUCH CIRCUMSTANCES MAY NOT BE REGARDED AS CONSUMMATING A VALID AND BINDING CONTRACT.

IN VIEW THEREOF THE NOTICE OF THE AWARD SHOULD BE CANCELLED.