B-157859, NOV. 15, 1965

B-157859, NOV. 15, 1965

TO VICE ADMIRAL JOSEPH M. LYLE, DIRECTOR, DEFENSE SUPPLY AGENCY:

REFERENCE IS MADE TO A LETTER DATED OCTOBER 13, 1965, WITH ENCLOSURES, FROM R. F. S. HOMANN, ASSISTANT COUNSEL, WHICH SUBMITTED FOR OUR CONSIDERATION A REQUEST BY THE WOLVERINE METAL COMPANY, 6500 EAST ROBINWOOD AVENUE, DETROIT, MICHIGAN, TO RESCIND THE AWARD MADE TO THAT CONCERN OF ITEMS 75 AND 76 OF INVITATION FOR BIDS NO. 21-S-65-114 BY CONTRACT NO. DSA 21-S-6826, DATED JUNE 30, 1965, BECAUSE ITS BIDS THEREON WERE SUBMITTED IN ERROR.

BY THE INVITATION THE DEFENSE LOGISTICS SERVICES CENTER OFFERED FOR PURCHASE FROM THE GOVERNMENT NUMEROUS AMOUNTS OF SCRAP OF VARYING DESCRIPTIONS. ITEMS 75 TO 76, AS WELL AS ITEM 74, WHICH WOLVERINE STATES IS THE ONLY ITEM ON WHICH A BID WAS INTENDED, CONSISTED OF HIGH TEMPERATURE NICKEL-BASED ALLOY SCRAP AND THE DESCRIPTION OF EACH INCLUDED A GRADE OR CONTENT DESIGNATION.

THE TOTAL AMOUNT BID BY WOLVERINE METAL COMPANY ON THESE AND OTHER ITEMS WAS $24,518.97 AND THE BIDDER DEPOSITED 20 PERCENT OF THAT, OR $5,000, AS REQUIRED. THE TOTAL CONTRACT PRICE WAS $2,622.48 SO THE OVERPAYMENT OF $2,377.52 WAS REFUNDED ON JULY 8, 1965.

ITEMS 75 AND 76 WERE AWARDED TO THE WOLVERINE METAL COMPANY ON JUNE 30, 1965, AT A UNIT PRICE OF $0.7575 PER POUND BUT BY LETTER DATED JULY 27, 1965, THE PURCHASER STATED THAT THE BIDS ON THOSE ITEMS WERE THE RESULT OF AN ERROR MADE TO HIS SECRETARY. IN SUPPORT OF THIS ALLEGATION THE BIDDER HAS SUBMITTED A NOTARIZED AFFIDAVIT BY HIS SECRETARY AND HIS WORKSHEET SHOWING NOTATIONS OF A UNIT PRICE OF $0.7575 BESIDE ITEM 74 BUT NO NOTATION BESIDE ITEMS 75 AND 76.

ITEMS 65 AND 91 AWARDED UNDER THIS CONTRACT WERE REMOVED BY THE PURCHASER ON JUNE 30, 1965, AND A NOTICE OF DEFAULT DATED AUGUST 2, 1965, WITH A CURE DATE OF AUGUST 17, 1965, PERTAINING TO ITEMS 75 AND 76 WAS SUSPENDED, AND THE GOVERNMENT RETAINED THE PURCHASE PRICE OF $1,959.65 PENDING THE OUTCOME OF THIS CASE.

SINCE THE PURCHASER HAS CLAIMED THAT THE BID WAS ERRONEOUSLY PREPARED AND SUBMITTED BY HIM THE ONLY QUESTION FOR OUR CONSIDERATION IS WHETHER, IN THESE CIRCUMSTANCES, THE CONTRACTING OFFICER HAD, OR SHOULD HAVE HAD, KNOWLEDGE OF THE MISTAKE PRIOR TO AWARD.

THE GENERAL PRINCIPLES APPLICABLE TO THIS CASE WERE SET OUT IN SALIGMAN V. UNITED STATES, 65 F.SUPP. 505, 507, WHERE IT WAS HELD THAT IF THERE WAS A UNILATERAL MISTAKE IN BID BY THE PURCHASER AND HE WAS AWARDED THE CONTRACT HE WOULD BE BOUND BY IT AND MUST BEAR THE CONSEQUENCES--- UNLESS THE CONTRACTING OFFICER KNEW, OR SHOULD HAVE KNOWN, OF THE MISTAKE. THAT CASE THE CONTRACT IS VOIDABLE AT THE PURCHASER'S OPTION. SEE 5 WILLISTON, CONTRACTS SEC. 1598; KEMP V. UNITED STATES, 38 F.SUPP. 568; WENDER PRESSES, INC. V. UNITED STATES, 343 F.2D 961.

AS THIS WAS A SALE OF SURPLUS METALS, KNOWLEDGE OF THE BID MISTAKE CANNOT BE IMPUTED TO THE CONTRACTING OFFICER MERELY BY COMPARING THE DIFFERENT BIDS AND NOTING THEIR RELATION TO EACH OTHER BECAUSE DIFFERENCES IN THE PRICES BID FOR SURPLUS PROPERTY DO NOT HAVE THE SAME IMPLICATION AS WOULD LIKE DIFFERENCES IN PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED. SEE UNITED STATES V. SABIN METAL CORP., 151 F.SUPP. 683, AFFIRMED 253 F.2D 956; 16 COMP. GEN. 596; 17 ID. 388; ID. 601, 603. AND THE CONTRACTING OFFICER HAD NO ACTUAL KNOWLEDGE OF THE MISTAKE PRIOR TO AWARD.

IN SALES INVOLVING SURPLUS PROPERTY THE GOVERNMENT IS INTERESTED ONLY IN GETTING THE HIGHEST POSSIBLE PRICE FOR THE MATERIAL AND IN ACHIEVING THIS AND IT IS NOT REQUIRED TO EMPLOY OR UTILIZE EXPERTS FOR THE BENEFIT OF THE BIDDERS, OR TO EXAMINE EVERY BID FOR POSSIBLE ERROR. UNITED STATES V. SABIN METAL CORP., SUPRA. ACCORDINGLY, THE FACT THAT A METALLURGY EXPERT SURMISED THAT BIDS LIKE WOLVERINE'S WOULD BE BASED ON A MISTAKE HAS NO BEARING ON THE ULTIMATE DECISION, ESPECIALLY SINCE THE STATEMENT WAS ISSUED THREE MONTHS AFTER THE BID OPENING DATE.

AS THE RESPONSIBILITY FOR PREPARATION OF THE BID IS ENTIRELY THAT OF THE BIDDER AND THE EVIDENCE SHOWS NO FRAUD, DURESS, ACCIDENT OR SUCH MISTAKE BY THE GOVERNMENT AS WOULD JUSTIFY A RESCISSION OF THE CONTRACT IT IS THE DECISION OF OUR OFFICE THAT THE CONTRACT IS VALID AND ENFORCEABLE.