B-147743, DEC. 22, 1961

B-147743, DEC. 22, 1961

TO LIBERTY WRECKING AND SALVAGE COMPANY:

YOUR LETTER OF NOVEMBER 28, 1961, ASKS REVIEW OF OUR CLAIMS DIVISION SETTLEMENT DATED NOVEMBER 13, 1961, WHICH DENIED YOUR CLAIM OF $332.40 FOR PARTIAL REFUND OF AN AMOUNT PAID FOR STEEL SCRAP.

THE RECORD SHOWS THAT ON AUGUST 11, 1961, YOU SUBMITTED THE HIGH BIDS ON THREE OF SEVERAL ITEMS OFFERED FOR SALE UNDER INVITATION FOR BIDS NO. B-9- 62-N67004, AND ON AUGUST 15, 1961, WERE AWARDED CONTRACT NO. H67004-6248 ON THOSE ITEMS. YOU NOTIFIED THE CONTRACTING OFFICER ON AUGUST 21, 1961, THAT YOUR OFFICE HAD MADE AN ERROR IN THE BID PRICE BY QUOTING $22.90 PER GROSS TON ON ITEM NO. 5 INSTEAD OF $6.28 PER GROSS TON. THE ONLY OTHER BIDDER ON THAT ITEM SUBMITTED A BID OF $3.78 PER GROSS TON.

YOU ENCLOSED WITH YOUR LETTER OF AUGUST 21, 1961, A WORKSHEET ON WHICH THE FIGURE "6.28" HAD BEEN ADDED IN THE FOLLOWING MANNER TO THE SPACE CONTAINING THE DESCRIPTION OF ITEM NO. 5:

"6.28 (IN INK) 20 GROSS TONS 22.90 (IN INK).' SEVERAL OTHER INK NOTATIONS WERE SIMILARLY MADE TO THE LEFT OF THE WEIGHT DESCRIPTION OF OTHER ITEMS.

YOU EXPLAIN IN YOUR LETTER THAT "THE ONLY EXPLANATION I CAN OFFER IS THAT I MAY POSSIBLY HAVE MADE A CHANGE ON ITEM NO. 6 AND BY MISTAKE ITEM NO. 5 WAS CHANGED INSTEAD OF ITEM NO. 6," AND YOU ASK THAT THE GOVERNMENT "MAKE A REFUND OF THE DIFFERENCE BETWEEN THE $22.90 LESS $6.28 PER GROSS TON FOR THE 20 GROSS TONS.'

ALTHOUGH YOUR BID WAS CONSIDERABLY HIGHER THAN THE ONLY OTHER BID RECEIVED NO FAIR COMPARISON CAN BE MADE, BECAUSE, UNLESS AN ERROR IS APPARENT ON THE FACE OF THE BID, IT IS AS REASONABLE TO CONSIDER THE LOW BID TOO LOW AS IT IS TO CONSIDER YOUR BID TOO HIGH. 20 COMP. GEN. 286.

YOU SAY THAT THE CONTRACTING OFFICER "OR ANYONE ELSE IN THE SCRAP BUSINESS" WOULD KNOW THAT YOUR BID WAS TOO HIGH. YOU ARE MISTAKEN IN ASSUMING THAT THE GOVERNMENT OR ITS AGENT IS ENGAGED IN THE SCRAP BUSINESS WHEN IT UNDERTAKES TO DISPOSE OF SURPLUS MATERIAL. IN THAT CONNECTION, SEE DADOURIAN EXPORT CORPORATION V. UNITED STATES, 291 F.2D 178, 182, WHEREIN IT IS STATED:

"* * * WHEN THE GOVERNMENT SELLS SURPLUS GOODS IT IS TRYING TO DISPOSE OF A VAST MISCELLANY OF USED AND UNUSED PROPERTY IN AN EFFORT, SO FAR AS MAY UNDER THE CIRCUMSTANCES BE POSSIBLE, TO MINIMIZE ITS LOSS. SALES OF THIS CHARACTER ARE PROCESSED ON A MASS QUANTITY BASIS BY MEMBERS OF THE ARMED FORCES WHO SELDOM IF EVER HAVE ANY EXPERTISE IN THE PARTICULAR ITEMS WHICH COME TO THEIR WAREHOUSES AND DEPOTS. BUYERS OF SUCH SURPLUS PROPERTY KNOW PERFECTLY WELL THAT THERE IS ALWAYS THE CHANCE OF BUYING PROPERTY THAT MAY TURN OUT TOBE OF LITTLE VALUE, OR MAY DEVELOP INTO A GREAT BARGAIN WITH A HUGE WINDFALL OF PROFIT. ACCORDINGLY, THE GOVERNMENT VERY PROPERLY HAS PROTECTED ITSELF BY FORMULATING ITS CONTRACT FOR THE SALE OF SUCH SURPLUS PROPERTY SO AS TO SHIFT THE RISK FROM ITSELF TO THE BUYER * * *.'

IN 20 COMP. GEN. 652 IT IS STATED:

"THE ESTABLISHED RULE IS THAT WHERE A BIDDER HAS MADE A MISTAKE IN THE SUBMISSION OF A BID AND THE BID HAS BEEN ACCEPTED, HE MUST BEAR THE CONSEQUENCES THEREOF UNLESS THE MISTAKE WAS MUTUAL OR THE ERROR WAS SO APPARENT THAT IT MUST BE PRESUMED THE CONTRACTING OFFICER KNEW OF THE MISTAKE AND SOUGHT TO TAKE ADVANTAGE THEREOF. 36 COMP. DEC. 286; 6 COMP. GEN. 526; 8 ID. 362.'

IN THE INSTANT CASE ANY ERROR WHICH MAY HAVE BEEN MADE WAS NOT MUTUAL AND WAS NOT SO APPARENT AS TO PLACE THE CONTRACTING OFFICER ON NOTICE OF THE POSSIBILITY OF ERROR. CONSEQUENTLY, THERE IS NO LEGAL BASIS FOR ALLOWANCE OF YOUR CLAIM.

ACCORDINGLY, THE SETTLEMENT OF NOVEMBER 13, 1961, DISALLOWING YOUR CLAIM FOR PARTIAL REFUND OF THE CONTRACT PRICE, IS SUSTAINED.