B-165668, DEC. 5, 1968

B-165668, DEC. 5, 1968

TO MR. KNOTT:

REFERENCE IS MADE TO A LETTER OF NOVEMBER 19, 1968, WITH ENCLOSURES, FROM THE GENERAL COUNSEL, FORWARDING FOR OUR DECISION THE REQUEST OF MR. GEORGE H. MUTZ, BOX 31, EAGLE NEST, NEW MEXICO, FOR RELIEF FROM A MISTAKE IN BID ALLEGED AFTER AWARD OF A SALE OF SURPLUS PROPERTY.

THE DENVER REGIONAL OFFICE HELD SPOT BID SALE NO. 8DPS-69-40 IN ALBUQUERQUE, NEW MEXICO, COVERING A QUANTITY OF VEHICLES AND HEAVY EQUIPMENT, AS SPECIFIED THEREIN, ON WEDNESDAY, SEPTEMBER 25, 1968. SEPTEMBER 11, 1968, THE REGIONAL OFFICE ISSUED A FLIER INVITING PROSPECTIVE BIDDERS TO INSPECT AND BID ON THE PROPERTY. BIDDERS WERE PERMITTED BY THE TERMS OF THE SALE TO BID ON ITEMS PRIOR TO THE SALE BY PLACING BIDS IN DROP BOXES WHICH WERE LOCATED AT THE INSPECTION SITES.

BIDS FOR ITEM NO. 121, A 1963 DODGE PICKUP, 1/2-TON, 6-CYLINDER, AND 4- SPEED TRANSMISSION, WERE CALLED FOR FROM THE FLOOR AND SEVEN BIDS WERE RECEIVED. THE EIGHTH AND HIGH BID OF $1,275 WAS A DROP BID SIGNED BY MR. GEORGE H. MUTZ. MR. MUTZ, THE HIGHEST BIDDER, WAS AWARDED THE ITEM ON SEPTEMBER 25, 1968. THE RANGE IN BID PRICES FOR ITEM 121 WAS FROM A LOW OF $227 TO THE SECOND HIGH BID OF $462.19.

BY LETTER OF SEPTEMBER 26, 1968, MR. MUTZ INFORMED THE REGIONAL OFFICE THAT THE AWARD WAS IN ERROR. HE STATED THAT THE ITEM ON WHICH HE HAD BID WAS ITEM NO. 120, CRAWLER TRACTOR, CATERPILLAR, D7, BUT THAT IT WAS POSSIBLE THAT HE HAD PLACED THE WRONG NUMBER ON HIS BID CARD ALTHOUGH HE HAD ITEM 120 MARKED ON HIS RETAINED INVITATION SHEET. MR. MUTZ STATED THAT SINCE IT WAS NOT HIS INTENTION TO BID ITEM 121, HE DID NOT WISH TO ACCEPT THE AWARD OF THIS ITEM. THE TRACTOR WAS AWARDED AT A HIGH BID OF $2,200. BY LETTER OF OCTOBER 4, 1968, MR. MUTZ WAS REQUESTED TO FURNISH HIS WORKSHEETS AND ANY OTHER PERTINENT INFORMATION WHICH MIGHT SUPPORT HIS ALLEGED MISTAKE IN BID. BY LETTER OF OCTOBER 10, 1968, HE SUBMITTED HIS WORKSHEETS TO THE REGIONAL OFFICE. HE HAS NEITHER PAID FOR NOR TAKEN DELIVERY OF ITEM 121, THE PICKUP TRUCK. MR. MUTZ'S COPY OF THE INVITATION WITH HIS NOTATIONS THEREON, REVEALS THAT EXCEPT FOR THE ITEM IN QUESTION (121) ALL NOTATIONS WERE ITEMS ON WHICH MR. MUTZ SUBMITTED BIDS. HIS WORKSHEET DID CONTAIN A NOTATION UNDER ITEM 120. THIS NOTATION WAS "INJECTOR PUMP MISSING TRACK AND ROLLER FAIR.' THE CONTRACTING OFFICER UPON REVIEWING THE WORKSHEETS NOTED THAT THOSE REMARKS COULD ONLY BE APPLICABLE TO ITEM 120, THE TRACTOR, AND NOT ITEM 121, THE DODGE PICKUP. THERE WERE NO NOTATIONS UNDER ITEM 121. HE HAS FURTHER DETERMINED THAT HE SHOULD HAVE BEEN PLACED ON NOTICE OF A POSSIBILITY OF A MISTAKE BECAUSE OF THE DISPARITY IN BID PRICES. THE HIGH BID WAS APPROXIMATELY 276 PERCENT HIGHER THAN THE SECOND HIGH BID AND 376 PERCENT HIGHER THAN THE UPSET PRICE OF $340. IN THESE CIRCUMSTANCES, THE CONTRACTING OFFICER, AFTER REVIEWING THE MATTER, HAS DETERMINED THAT MR. MUTZ HAS FURNISHED CLEAR AND CONVINCING EVIDENCE OF A MISTAKE AND HE RECOMMENDS THAT THE CONTRACT BE RESCINDED.

AFTER REVIEWING THIS MATTER, WE BELIEVE THAT AN HONEST MISTAKE HAS BEEN MADE BY MR. MUTZ AS CLAIMED BECAUSE THERE WERE 13 OTHER 1963 DODGE PICKUPS SOLD AT THIS SALE AT BID PRICES RANGING FROM $439 TO $602.50, AND BECAUSE THE UPSET PRICE FOR ITEM 121 WAS $340. SINCE THE PRICE BID BY MR. MUTZ WAS SO MUCH HIGHER THAN THE SECOND HIGH BID, THE DISPARITY BETWEEN THE PRICES SUBMITTED BY THE TWO HIGHEST BIDDERS SHOULD HAVE RAISED ENOUGH DOUBT AS TO THE HIGH BID'S CORRECTNESS TO HAVE MOTIVATED THE CONTRACTING OFFICER AND PLACED A DUTY ON HIM TO VERIFY THE HIGH BID. WHILE A WIDE RANGE OF BID PRICES IN SURPLUS SALES ORDINARILY IS NOT ENOUGH TO PUT THE CONTRACTING OFFICER ON CONSTRUCTIVE NOTICE OF ERROR, IN THESE CIRCUMSTANCES WE MUST CONCLUDE THAT THE CONTRACTING OFFICER HAD CONSTRUCTIVE NOTICE OF THE PROBABILITY OF ERROR AT THE TIME OF THE AWARD. B-163837, APRIL 8, 1968.

SINCE ACCEPTANCE OF A BID WITH KNOWLEDGE, EITHER CONSTRUCTIVE OR ACTUAL, OF ERROR THEREIN DOES NOT CONSUMMATE A VALID AND BINDING CONTRACT, RESCISSION OF THE CONTRACT, AS ADMINISTRATIVELY RECOMMENDED, IS AUTHORIZED.