B-172700, JUN 15, 1971

B-172700, JUN 15, 1971

CONTRACTS - MISTAKE IN BID - CANCELLATION ADVISING THAT CONTRACT OF LIMA ARMATURE WORKS, INC., FOR THE PURCHASE OF ITEM 5, A CARGO TRUCK MAY BE CANCELLED. ON THE FACESHEET OF ITS BID, LIMA AGREED "TO PURCHASE AND PAY FOR ANY OR ALL OF THE ITEMS OR LOTS OF PROPERTY LISTED ON THE ATTACHED ITEM BID PAGES) 5." SINCE ITEM 5 IS NOT LISTED ON PAGE 5 OF LIMA'S BID, IT IS NOT OBLIGATED TO PURCHASE AND PAY FOR THAT ITEM.

TO GENERAL HEDLUND:

REFERENCE IS MADE TO LETTER DATED APRIL 21, 1971, WITH ENCLOSURES, YOUR REFERENCE DSAH-G, FROM YOUR ASSISTANT COUNSEL, REQUESTING OUR DECISION AS TO THE ACTION TO BE TAKEN CONCERNING AN ERROR ALLEGED BY THE LIMA ARMATURE WORKS, INC., TO HAVE BEEN MADE IN ITS BID UPON WHICH SALES CONTRACT NO. 21 -1119-093 IS BASED.

THE DEFENSE SURPLUS SALES OFFICE, ATLANTA ARMY DEPOT, FOREST PARK, GEORGIA, BY SALES INVITATION NO. 21-1119, REQUESTED BIDS FOR THE PURCHASE FROM THE GOVERNMENT OF VARIOUS ITEMS OF EQUIPMENT. IN RESPONSE, THE LIMA ARMATURE WORKS, INC., SUBMITTED A BID DATED MARCH 12, 1971, LISTING ON THE "ITEM BID PAGE" OF THE INVITATION A UNIT BID PRICE OF $1,125 FOR ITEM NO. 5. ITEM NO. 5, LISTED ON PAGE 2 OF THE SALES INVITATION, IS A CARGO TRUCK. THE NINE OTHER BIDS ON ITEM 5 RANGED FROM $718 TO $68.93. THE BID OF LIMA AS TO ITEM 5 WAS ACCEPTED ON MARCH 24, 1971.

IT IS REPORTED THAT ON MARCH 26, 1971, A REPRESENTATIVE OF LIMA TELEPHONED THE SALES CONTRACTING OFFICER ALLEGING THAT AN ERROR HAD BEEN MADE IN THE COMPANY'S BID IN THAT IT HAD INTENDED TO BID ON THE FORKLIFT TRUCK COVERED BY ITEM 47 OF THE SALES INVITATION RATHER THAN THE CARGO TRUCK COVERED BY ITEM 5; THAT LIMA'S REPRESENTATIVE STATED THAT HE HAD SUBMITTED A COPY OF A PURCHASE ORDER WITH HIS BID REFLECTING THAT HIS BID WAS SUBMITTED ON A FORKLIFT; AND THAT THE SALES CONTRACTING OFFICER INFORMED LIMA'S REPRESENTATIVE THAT NO COPY OF A PURCHASE ORDER HAD BEEN ATTACHED TO HIS BID SHEET AND THAT HE SHOULD SUPPORT THE ALLEGED ERROR WITH PERTINENT EVIDENCE. BY LETTER ALSO DATED MARCH 26, 1971, LIMA REQUESTED THAT IT BE RELIEVED OF THE OBLIGATION OF PURCHASING ITEM 5 AND THAT THE COMPANY'S DEPOSIT BE RETURNED TO IT.

IN HIS REPORT THE SALES CONTRACTING OFFICER DOES NOT ADMIT THAT HE SHOULD HAVE BEEN ON NOTICE OF THE PROBABILITY OF ERROR IN THE BID OF LIMA BECAUSE THE CURRENT MARKET APPRAISAL OF THE ITEM 5 CARGO TRUCK WAS $1,000, WHICH WAS CONSIDERED TO BE IN LINE WITH THE LIMA BID. HOWEVER, IN A REPORT IN WHICH HE RECOMMENDED CANCELLATION OF THE CONTRACT, COUNSEL, DEFENSE LOGISTICS SERVICES CENTER, POINTS OUT THAT LIMA ENTERED ON THE FACESHEET OF ITS BID, STANDARD FORM 114-A, A NOTATION THAT IT WAS BIDDING ON AN ITEM LISTED ON PAGE 5 OF THE SALES INVITATION; AND THAT ITEM 47, THE ITEM ON WHICH LIMA ALLEGES IT INTENDED BIDDING, IS LISTED ON PAGE 5 OF THE INVITATION, WHEREAS ITEM 5 IS LISTED ON PAGE 2 THEREOF. COUNSEL STATES THAT IN VIEW OF THE FOREGOING, HE IS OF THE OPINION THAT A MISTAKE WAS PATENT ON THE FACE OF THE BID AND THAT THE SALES CONTRACTING OFFICER SHOULD HAVE BEEN ON NOTICE THEREOF PRIOR TO AWARD.

ON THE FACESHEET OF ITS BID, LIMA AGREED "TO PURCHASE AND PAY FOR ANY OR ALL OF THE ITEMS OR LOTS OF PROPERTY LISTED ON THE ATTACHED ITEM BID PAGES) 5." SINCE ITEM 5 IS NOT LISTED ON PAGE 5 OF LIMA'S BID, IT IS NOT OBLIGATED TO PURCHASE AND PAY FOR THAT ITEM. IT IS OUR OPINION THAT THE ACCEPTANCE OF LIMA'S BID DID NOT CONSUMMATE A VALID AND BINDING CONTRACT.

ACCORDINGLY, CONTRACT NO. 21-1119-093 MAY BE CANCELED WITHOUT LIABILITY TO LIMA, AS ADMINISTRATIVELY RECOMMENDED.