B-161736, JUN. 19, 1967

B-161736, JUN. 19, 1967

TO ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION:

REFERENCE IS MADE TO A LETTER DATED JUNE 6, 1967, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, REQUESTING A DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE ACME MACHINERY COMPANY, TO HAVE BEEN MADE IN ITS BID UNDER SALE NO. 9DPS/LA/67-155, ISSUED BY THE GSA SAN FRANCISCO REGIONAL OFFICE ON JANUARY 3, 1967, ON WHICH SALES CONTRACT NO. GS-09-DP/S/-7-2074 DATED JANUARY 23, 1967, IS BASED.

THE SALE INVITATION OFFERED 28 ITEMS OF MISCELLANEOUS MACHINERY FOR SALE AND THE ACME MACHINERY COMPANY WAS HIGH BIDDER ON ITEMS 6 AND 14 IN THE AMOUNTS OF $1,031 AND $3,031, RESPECTIVELY. THE PURCHASER MADE PAYMENT FOR THE PROPERTY ON JANUARY 25, 1967, AND ON JANUARY 26, 1967, TOOK DELIVERY OF ITEMS 6 AND 9. ITEM 9 WAS ERRONEOUSLY RELEASED BY THE CUSTODIAN INSTEAD OF ITEM 14. HOWEVER, ITEM 9 WAS SUBSEQUENTLY RETURNED BY ACME AND THIS ITEM WAS PROPERLY REDELIVERED TO THE HIGH BIDDER ON ITEM 9. WE UNDERSTAND THAT ITEM 14 IS STILL IN THE CUSTODY OF THE SALES AGENCY.

ITEM 14 OF THE SALES INVITATION WAS DESCRIBED AS A "GRINDING MACHINE, BROWN SHARPE, MOD. 5, 1942, S/N 767, SURFACE RECIPROCATING TABLE, HORIZ. SPINDLE, HAND OR POWER FEED, HYD. TYPE, 24" LGTH WORK, 220/440 V.AC, 3- PHASE, 60 CYCLE, 1 EA.' THE ORIGINAL ACQUISITION COST OF ITEM 14 WAS REPORTED TO BE $2,332 AND AN UPSET PRICE OF $100 HAD BEEN ESTABLISHED ON THE ITEM. IN ADDITION TO THE HIGH BID OF $3,031 RECEIVED FROM ACME, 18 OTHER BIDS ON THE ITEM RANGED FROM $6.96 TO A SECOND HIGH BID OF $1,001.99.

WHEN ACME RETURNED ITEM 9, IT ALLEGED THAT IT HAD INTENDED TO BID $3,031 FOR ITEM 9 AND THAT IT HAD INADVERTENTLY INSERTED SUCH AMOUNT FOR ITEM 14. ACME'S WORKSHEETS HAVE BEEN SUBMITTED TO SUBSTANTIATE THIS ALLEGATION. THE WORKSHEETS REVEAL ENTRIES FOR ITEMS 6 AND 9 ONLY, WHEREAS, THE EXECUTED BID FORM SHOWS A BID ENTRY FOR ITEM 14 RATHER THAN FOR ITEM 9.

THE CONTRACTING OFFICER, AFTER CAREFUL EXAMINATION OF THE MATTER, HAS DETERMINED THAT THE ACME BID OF $3,031 ON ITEM 14 WAS MORE THAN THREE TIMES AS MUCH AS THE NEXT HIGH BID OF $1,00.99 AND THAT THE BID WAS GROSSLY HIGHER THAN THE REPORTED ACQUISITION COST OF $2,332. IN VIEW OF THE WIDE DISPARITY BETWEEN ACME'S BID AND THE OTHER BIDS RECEIVED FOR ITEM 14, THE CONTRACTING OFFICER HAS FURTHER DETERMINED THAT THE MISTAKE WAS SO APPARENT THAT HE SHOULD HAVE BEEN PLACED ON NOTICE OF THE PROBABILITY OF THE MISTAKE.

WHILE AS A GENERAL RULE, A WIDE RANGE OF PRICES RECEIVED FOR THE PURCHASE OF GOVERNMENT SURPLUS PROPERTY DOES NOT, IN AND OF ITSELF, PLACE A CONTRACTING OFFICER ON NOTICE AS TO THE PROBABILITY OF ERROR, 16 COMP. GEN. 596; 17 ID. 388; 28 ID. 261; AND ID. 550, THE EVIDENCE IN THE PRESENT CASE LEAVES LITTLE DOUBT THAT ACME ERRED IN BINDING ON THE WRONG ITEM. SEE B-155987, FEBRUARY 10, 1965. CONSIDERING THE FACT THAT ACME'S BID WAS OVER THREE TIMES GREATER ON ITEM 14 THAN THE NEXT HIGHEST BID AND SINCE ITS BID EXCEEDED THE ACQUISITION COST OF THE ITEM BY ALMOST ONE-THIRD, WE CONCUR IN THE ADMINISTRATIVE VIEW THAT THE CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE ACME BID AND SHOULD HAVE VERIFIED THE BID PRIOR TO AWARD. B-144370, NOVEMBER 15, 1960.

ACCORDINGLY, ITEM 14 OF THE CONTRACT MAY BE CANCELLED WITHOUT LIABILITY TO THE ACME MACHINERY ..END :