B-180824, APR 12, 1974
Highlights
WHERE CONTRACT WAS AWARDED FOR 1952 CARGO TRUCK AT PRICE OF $2. REQUEST FOR RECISSION OF SALES CONTRACT MAY BE GRANTED SINCE RECORD DISCLOSES THAT CURRENT MARKET VALUE OF TRUCK WAS $550 AND NEXT HIGHEST BID PRICE WAS $1. IT IS CONCLUDED THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID AND SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD. WHICH WAS MORE THAN TWICE THE AMOUNT OF THE NEXT HIGH BID AND ABOUT 5 TIMES THE CURRENT MARKET VALUE. SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR IN A & H'S BID AND CAUSED HIM TO VERIFY THE BID PRIOR TO AWARD. THE CONTRACT WAS AWARDED ON NOVEMBER 20. WE AGREE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN THE BID OF A & H AND SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO AWARD.
B-180824, APR 12, 1974
WHERE CONTRACT WAS AWARDED FOR 1952 CARGO TRUCK AT PRICE OF $2,705.99, REQUEST FOR RECISSION OF SALES CONTRACT MAY BE GRANTED SINCE RECORD DISCLOSES THAT CURRENT MARKET VALUE OF TRUCK WAS $550 AND NEXT HIGHEST BID PRICE WAS $1,077 AND, THEREFORE, IT IS CONCLUDED THAT CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN BID AND SHOULD HAVE REQUESTED VERIFICATION PRIOR TO AWARD.
TO A & H TRUCK SALES:
BY LETTER DATED MARCH 7, 1974, WITH ENCLOSURES, THE ASSISTANT COUNSEL, DEFENSE SUPPLY AGENCY, IN CONCURRENCE WITH THE DEFENSE PROPERTY DISPOSAL SERVICE, RECOMMENDED THAT SALES CONTRACT NO. 41-4075 086, AWARDED TO A & H TRUCK SALES (A & H), FOR A 1952 CARGO TRUCK UNDER ITEM 35 OF SALE NO. 41- 4075, BE RESCINDED ON THE GROUNDS THAT ITS BID OF $2,705.99, WHICH WAS MORE THAN TWICE THE AMOUNT OF THE NEXT HIGH BID AND ABOUT 5 TIMES THE CURRENT MARKET VALUE, SHOULD HAVE PLACED THE CONTRACTING OFFICER ON NOTICE OF POSSIBLE ERROR IN A & H'S BID AND CAUSED HIM TO VERIFY THE BID PRIOR TO AWARD.
THE CONTRACT WAS AWARDED ON NOVEMBER 20, 1973, WITHOUT VERIFICATION OF BID AND IMMEDIATELY, BY LETTER OF NOVEMBER 26, 1973, A & H ALLEGED A MISTAKE STATING THAT IT DID NOT INTEND TO BID ON ITEM 35, BUT THAT IT HAD INTENDED TO BID ON ITEM 135.
AFTER REVIEWING THE ADMINISTRATIVE FILE AND, ON THE BASIS OF THE INFORMATION CONTAINED THEREIN, WE AGREE THAT THE CONTRACTING OFFICER WAS ON CONSTRUCTIVE NOTICE OF POSSIBLE ERROR IN THE BID OF A & H AND SHOULD HAVE REQUESTED VERIFICATION OF THE BID PRIOR TO AWARD. SEE CHERNICK V. UNITED STATES, 372 F.2D 492, 496 (1967), 178 CT. CL. 498, 504, IN WHICH THE COURT OF CLAIMS STATED:
"*** THE TEST OF WHAT AN OFFICIAL IN CHARGE OF ACCEPTING BIDS 'SHOULD' HAVE KNOWN MUST BE THAT OF REASONABLENESS, I.E., WHETHER UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THERE WERE ANY FACTORS WHICH REASONABLY SHOULD HAVE RAISED THE PRESUMPTION OF ERROR IN THE MIND OF THE CONTRACTING OFFICER; AMONG SUCH FACTORS ARE OBVIOUS WIDE RANGE OF BIDS, AND GROSS DISPARITY BETWEEN THE PRICE BID AND THE VALUE OF THE ARTICLE WHICH WAS THE SUBJECT OF THE BID. ***"
SEE ALSO B-177612, MARCH 9, 1973, AND B-176835, OCTOBER 4, 1972.
ACCORDINGLY, THE SALES CONTRACT MAY BE RESCINDED, AS ADMINISTRATIVELY RECOMMENDED, WITHOUT LIABILITY TO A & H TRUCK SALES.