B-146479, SEP. 20, 1961

B-146479, SEP. 20, 1961

TO THE PANHANDLE PIPE AND STEEL, INC.:

REFERENCE IS MADE TO YOUR LETTER OF JULY 12, 1961, REQUESTING REVIEW OF SETTLEMENT DATED MAY 1, 1961, WHICH DISALLOWED YOUR CLAIM FOR $275,ALLEGED TO BE DUE AS A PARTIAL REFUND OF THE AMOUNT PAID FOR 27.5 GROSS TONS OF MIXED METAL SCRAP PURCHASED FROM THE DEPARTMENT OF THE AIR FORCE UNDER CONTRACT NO. (41-623/S-61-7.

IT APPEARS THAT IN RESPONSE TO INVITATION NO. 41-623-S-61-2, ISSUED BY THE BASE PROCUREMENT DIVISION, AMARILLO AIR FORCE BASE, AMARILLO, TEXAS, YOU SUBMITTED A BID OFFERING TO PURCHASE 25 GROSS TONS OF THE MIXED METAL SCRAP DESCRIBED UNDER ITEM 30 AT A PRICE OF $18.22 PER GROSS TON. AFTER AWARD OF THE CONTRACT AND DELIVERY OF 27.5 GROSS TONS OF THE MATERIAL INVOLVED, YOU ADVISED THE DISPOSAL AGENCY BY LETTER DATED JANUARY 20, 1961, THAT YOU HAD MADE AN ERROR IN YOUR BID IN THAT YOU HAD INTENDED TO BID $8.22 PER GROSS TON FOR ITEM 30 AND YOU REQUESTED REFUND OF $10 PER GROSS TON FOR THE SCRAP REMOVED. YOU INVITED ATTENTION TO THE FACT THAT YOU HAD QUOTED ONLY $14.56 PER GROSS TON FOR THE PREPARED HEAVY SCRAP COVERED BY ITEM 41 AND $11.48 PER GROSS TON FOR THE UNPREPARED HEAVY SCRAP COVERED BY ITEM 42. YOU STATED THAT SINCE ITEM 30 COVERED TIN AND A LOWER QUALITY OF SCRAP, YOU WOULD LOGICALLY HAVE QUOTED A LOWER PRICE FOR THAT ITEM THAN FOR ITEMS 41 AND 42. SUBSEQUENTLY, YOUR CLAIM FOR RELIEF WAS SUBMITTED TO OUR OFFICE AND IT WAS DISALLOWED FOR THE REASONS STATED IN THE SETTLEMENT.

YOUR REQUEST FOR REVIEW APPEARS TO BE BASED ON THE QUESTION WHETHER THE GOVERNMENT ACTED FAIRLY IN THIS TRANSACTION. YOU CONTEND THAT THE FACT THAT THE AMOUNT OF YOUR BID ON ITEM 30 WAS MORE THAN TWICE THE AMOUNT OF THE NEXT HIGHEST BID RECEIVED ON THAT ITEM IS SIGNIFICANT, NOTWITHSTANDING THAT THE SETTLEMENT INDICATES OTHERWISE. YOU STATE YOU COULD NOT POSSIBLY, UNDER SANE CONDITIONS, HAVE WANTED TO PAY AS MUCH OR MORE FOR UNPREPARED INFERIOR MATERIAL AS FOR THE HEAVIER MORE LUCRATIVE GRADES ON THE SAME SALE.

THERE WAS NOTHING ON THE FACE OF YOUR BID TO INDICATE THAT YOU INTENDED TO QUOTE A LOWER PRICE FOR ITEM 30. IN THAT CONNECTION, IT IS NOTED THAT THE BID FORM SUBMITTED BY YOU APPEARS TO INDICATE THAT YOUR BID PRICE FOR ITEM 30 WAS ORIGINALLY HIGHER AND IN THE $20 BRACKET AND THAT IT WAS CHANGED TO $18.22 PRIOR TO THE SUBMISSION THEREOF. THE ABSTRACT OF BIDS SHOWS THAT OF THE TWO OTHER BIDDERS ON ITEM 30, ONE QUOTED A UNIT PRICE OF $6 PER GROSS TON AND THAT THE OTHER BIDDER QUOTED A LOT PRICE OF $12.56 FOR 25 GROSS TONS. ALTHOUGH THE BID SUBMITTED BY YOU WAS CONSIDERABLY HIGHER THAN THE NEXT HIGHEST BID RECEIVED ON ITEM 30, IT DOES NOT APPEAR THAT THE DIFFERENCE WAS SO GREAT TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN YOUR BID ON THAT ITEM. ALSO, THE FACT THAT YOU QUOTED A LOWER PRICE FOR A HIGHER QUALITY OF METAL SCRAP IS NOT MATERIAL IN THE CIRCUMSTANCES. A COMPARISON OF THE PRICE ON ONE ITEM WITH THE PRICES OF OTHER ITEMS COVERING SIMILAR MATERIALS QUOTED BY THE SAME BIDDER WOULD NOT BE REQUIRED, GENERALLY, OF THE CONTRACTING OFFICER TO DETERMINE WHETHER A BIDDER HAS MADE AN ERROR IN ANY ITEM OF HIS BID. IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED ON WASTE, SALVAGE, AND SURPLUS PROPERTY, 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 FROM THE GOVERNMENT, AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT OR SUPPLIES TO BE FURNISHED TO THE GOVERNMENT. SEE UNITED STATES. V. SABIN METAL CORP., 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596, 17 ID. 388; AND ID 601. IN THE SABIN CASE, SUPRA, THE PRICE DISPARITY ON THE BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. THE COURT, AT P. 688, SAID:

"THIS BEING A SALE OF SURPLUS ENGINE PARTS, THE CONTRACTING OFFICER HAD NO METHOD OF KNOWING THAT THERE WAS AN ERROR IN THE DEFENDANT'S BID. THE GOVERNMENT WAS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL TO BE SOLD; IT WAS NOT IN THE METAL TRADE. THERE IS NO REASON WHY THE SPREAD IN BIDS SHOULD HAVE APPEARED PALPABLE TO THE GOVERNMENT. THE ADMINISTRATIVE AGENCY WAS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE DEFENDANT, NOR TO ASSUME THE BURDEN OF EXAMINING EVERY LOW BID FOR POSSIBLE ERROR BY THE BIDDER.'

IN VIEW OF THE FOREGOING AND AS NO ERROR WAS ALLEGED UNTIL AFTER AWARD AND THE BID WAS CLEAR AND UNAMBIGUOUS, IT MUST BE CONCLUDED THAT THE ACCEPTANCE OF YOUR BID WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT WHICH FIXED THE RIGHTS AND LIABILITIES OF THE PARTIES. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE TO THE INVITATION WAS UPON YOU. SEE FRAZIER DAVIS CONSTRUCTION CO. V. UNITED STATES, 100 CT.CL. 120, 163. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL--- NOT MUTUAL--- AND DOES NOT ENTITLE YOUR CORPORATION TO RELIEF FROM YOUR OBLIGATION UNDER THE CONTRACT. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 CT.CL. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.SUPP. 505, 507. ..END :