B-147427, NOV. 6, 1961

B-147427, NOV. 6, 1961

TO GENERAL DAVID M. SHOUP:

REFERENCE IS MADE TO YOUR LETTER DATED OCTOBER 11, 1961, WITH ENCLOSURES, YOUR REFERENCE CSX-6-ABO:JHS, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ALLEGATION BY AARON FERER AND SONS, SAN DIEGO, CALIFORNIA, THAT THE COMPANY MADE AN ERROR IN ITS BID ON WHICH SALES CONTRACT NO. B-43-62-N-62204-6967 IS BASED.

INVITATION FOR BIDS NO. B-43-62, ISSUED BY THE CONSOLIDATED SURPLUS SALES OFFICE, MARINE CORPS SUPPLY CENTER, BARSTOW, CALIFORNIA, DESCRIBED ITEM NO. 76 AS FOLLOWS:

"PERISCOPE HEAD ASSEMBLY, WITH PLASTIC BODY AND METAL RETAINER FOR HOLDING FRONT, PRISM, PRISM NON-MAGNIFYING CLEAR, COMPONENT PART OF PERISCOPE MODEL M-6, ORDNANCE PART NO. 7669401. MANUFACTURER UNKNOWN. APPROXIMATELY 60 PER BOX. PACKED: 125 WOODEN BOXES. APPROX. CU.FT.: 640 (APPROX. 25 PER 5 BOXES). APPROX. GR.WT.: 18,900 LBS. (APPROX. 150 LBS. PER 5 BOXES). CONDITION: APPARENTLY UNUSED, FAIR.

"TOTAL ACQ. COST: $231,750.00 QUANTITY: 125 BOXES

($9,270.00) PER 5 BOXES

"FOR ITEM NO. 76.

BIDS CAN BE MADE FOR A MINIMUM OF 5 BOXES OF THE PERISCOPE HEAD ASSEMBLIES LISTED ABOVE OR FOR ANY MULTIPLE OF 5 BOXES.

A BIDDER WILL NOT BE PERMITTED TO SELECT OR PICK OUT INDIVIDUAL BOXES OF PERISCOPE HEAD ASSEMBLIES IN THE LOT SO AS TO HAVE A BETTER CHOICE THAN OTHER BIDDERS.'

AARON FERER AND SONS SUBMITTED A BID UNDER ITEM NO. 76 FOR FIVE BOXES AT $27.56 PER BOX, TOTAL BID PRICE $137.80. THREE LINES WERE PROVIDED FOR BIDS ON ITEM NO. 76, AND ON THE SECOND LINE OF THE FERER BID, THE COMPANY INSERTED A UNIT PRICE OF $22.56 AND A TOTAL PRICE OF $112.80 BUT FAILED TO INDICATE IN THE QUANTITY COLUMN THE NUMBER OF BOXES ON WHICH IT WAS BIDDING. SIX OTHER BIDDERS SUBMITTED BIDS ON ITEM NO. 76 AT UNIT PRICES RANGING FROM ?44 TO $15.89.

THE SALES CONTRACTING OFFICER DISREGARDED THE UNIT BID OF $22.56 IN VIEW OF THE OMISSION OF THE NUMBER OF UNITS, BUT ACCEPTED THE BID OF $27.56 PER BOX FOR FIVE BOXES. CONTRACT NO. B-43-62-N-62204-6967 WAS AWARDED TO AARON FERER AND SONS ON SEPTEMBER 21, 1961, FOR FIVE BOXES OF PERISCOPE HEADS AT A TOTAL PRICE OF $137.80, IN ACCORDANCE WITH THE BID.

BY LETTER OF SEPTEMBER 25, 1961, MR. DAVE FERER, PRESIDENT OF AARON FERER AND SONS, ADVISED THE CONTRACTING OFFICER THAT HE HAD INTENDED TO BID $7.56 PER BOX INSTEAD OF $27.56 AND ASKED PERMISSION TO WITHDRAW THE BID BECAUSE OF THE ERROR. ON SEPTEMBER 26, 1961, THE CONTRACTING OFFICER REQUESTED THE CONTRACTOR TO FURNISH A SIGNED STATEMENT DESCRIBING THE MISTAKE AND THE MANNER IN WHICH IT OCCURRED, TOGETHER WITH WORK SHEETS OR OTHER EVIDENCE TO ESTABLISH THAT THE BID SUBMITTED WAS NOT THE BID INTENDED.

BY LETTER OF SEPTEMBER 29, 1961, THE CONTRACTOR ADVISED THAT NO EVIDENCE OF THE INTENDED BID COULD BE FURNISHED SINCE NO WORK SHEETS WERE USED FOR THIS PARTICULAR BID, AND HE STATED THAT HE COULD NOT ACCOUNT FOR PRICING THE BOXES AT $27.56 IN THE BID. AS POSSIBLE EVIDENCE OF ERROR, THE CONTRACTOR ENCLOSED A COPY OF AN INVOICE DATED AUGUST 11, 1960, SHOWING THE PURCHASE OF 250 PRISMS AT A PRICE OF ?22 1/2 EACH. THE CONTRACTOR DESCRIBED THOSE PRISMS AS THE SAME AS THE PERISCOPE HEAD ASSEMBLY OF ITEM NO. 76. THE CONTRACTOR AGAIN REQUESTED THAT WITHDRAWAL OF THE BID BE PERMITTED.

EVEN IF WE ASSUME, IN THE ABSENCE OF ANY PROOF, THAT THE PRISMS COVERED BY THE INVOICE ARE SIMILAR TO THE PERISCOPE HEADS DESCRIBED IN ITEM NO. 76, WE CANNOT ACCEPT A RECORD OF A TRANSACTION THAT TOOK PLACE MORE THAN 13 MONTHS PRIOR TO THE BID AS EVIDENCE THAT THE BID WAS ERRONEOUS. THERE WAS NOTHING ON THE FACE OF THE BID TO INDICATE THAT THE PRICE QUOTED FOR ITEM NO. 76 WAS INTENDED TO BE OTHER THAN IT WAS STATED. ALTHOUGH THE BID WAS CONSIDERABLY HIGHER THAN THE OTHER BIDS RECEIVED FOR THE SAME ITEM, WE FEEL THAT THE DIFFERENCE WAS NOT SO GREAT AS TO HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR. IN THIS CONNECTION, IT MUST BE NOTED THAT THE TOTAL BID OF $137.80 FOR FIVE BOXES REPRESENTS LESS THAN 1 1/2 PERCENT OF THE ACQUISITION COST OF $9,270 FOR FIVE BOXES AND THAT THE PERISCOPE HEAD ASSEMBLIES WERE DESCRIBED AS BEING IN FAIR CONDITION, APPARENTLY UNUSED. IT DOES NOT SEEM REASONABLE TO EXPECT A CONTRACTING OFFICER TO VIEW SUCH A BID AS TOO HIGH.

IN VIEW OF THE WIDE RANGE OF PRICES ORDINARILY RECEIVED IN BIDS ON SURPLUS PROPERTY, A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF ERROR IN A BID AS WOULD A SIMILAR DIFFERENCE IN PRICES QUOTED ON NEW EQUIPMENT TO BE FURNISHED TO THE GOVERNMENT. PRICES OFFERED TO THE GOVERNMENT FOR ITS SURPLUS PROPERTY ARE BASED MORE OR LESS UPON THE USE TO BE MADE OF THE PROPERTY BY THE PARTICULAR BIDDER OR UPON THE RISK OF RESALE WHICH THE BIDDER MAY CARE TO ASSUME. SEE UNITED STATES V. SABIN METAL CORPORATION, 151 F.SUPP. 683, 689, CITING WITH APPROVAL 16 COMP. GEN. 596; 17 ID. 388; ID. 601. IN THE SABIN CASE THE PRICE DISPARITY ON BIDS RECEIVED FOR THE SALE OF SURPLUS PROPERTY RANGED FROM A LOW OF $337.28 TO A HIGH OF $9,351.30. AT PAGE 688, THE COURT 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 THE PRESENT CASE, NO ERROR WAS ALLEGED UNTIL AFTER AWARD HAD BEEN MADE ON A BID WHICH WAS CLEAR AND UNAMBIGUOUS ON ITS FACE. WE MUST CONCLUDE THAT ACCEPTANCE OF THE BID OF AARON FERER AND SONS WAS MADE IN GOOD FAITH AND CONSUMMATED A VALID AND BINDING CONTRACT. IF AN ERROR WAS MADE AS ALLEGED, IT WAS A UNILATERAL ERROR AND NOT A MUTUAL ONE; THEREFORE, THE CONTRACTOR IS NOT ENTITLED TO RELIEF FROM ITS OBLIGATIONS UNDER THE CONTRACT. SEE DOUGHERTY AND OGDEN V. UNITED STATES, 102 CT.CL. 249; SALIGMAN V. UNITED STATES. 56 F.SUPP. 505, 507.

WE FIND NO LEGAL BASIS FOR RELIEVING THE CONTRACTOR FROM LIABILITY UNDER THE TERMS OF HIS CONTRACT. THE REQUEST FOR RELIEF MUST BE DENIED IN ACCORDANCE WITH YOUR RECOMMENDATION.