B-181598, DEC 16, 1974, 54 COMP GEN 484

B-181598, DEC 16, 1974, 54 COMP GEN 484

SALES - AUCTION - PROCEDURE - PROPRIETY PROTEST OF SALE OF GENERATORS AS GROUP, LISTED ON INVITATION FOR BIDS (IFB) AS ITEMS 56 THROUGH 72 AND ITEM 75 AT AUCTION OF DEPARTMENT OF DEFENSE SURPLUS PROPERTY ON BASIS THAT WORD "COUNT" AS USED IN PART 6AB) OF SALE BY REFERENCE PAMPHLET WHICH PROVIDES THAT SALE OF ALL ITEMS CATALOGED BY WEIGHT, COUNT OR MEASURE WILL BE SOLD IN LIKE UNITS IS AMBIGUOUS AND THAT GENERATORS ARE NOT LIKE UNITS HAS NO BASIS SINCE WORD "COUNT" INCLUDES ANY ITEM DESCRIBED BY NUMBER IN IFB AND WOULD THEREFORE INCLUDE GENERATORS LISTED AS ONE EACH AND GENERATORS, WHILE NOT IDENTICAL, WERE SUFFICIENTLY SIMILAR IN NATURE TO CONSTITUTE LIKE UNITS; THEREFORE IT MUST BE CONCLUDED SALE WAS IN ACCORDANCE WITH PROVISIONS OF PART 6AB) AND NOT IN CONTRAVENTION OF PART 6AA). SALES - AUCTION - GROUP V. NUMBERED ITEMS - DISPUTES - CONFLICT BETWEEN AUCTION RECORDS AND PROTESTER'S ALLEGATIONS CONTENTIONS THAT PROTESTER WAS NOT ADVISED OF AUCTIONEER'S INTENT TO SELL GENERATORS IN GROUP AND THAT AUCTIONEER DID NOT STATE THAT SUCCESSFUL BIDDER ON ITEM 56 COULD CHOOSE AMONG REMAINING ITEMS IN GROUP HAVE NO MERIT SINCE CONTENTIONS CONCERN QUESTIONS OF FACT AND PURSUANT TO SUBSECTION (E) OF PART 6 MUST BE RESOLVED BY GOVERNMENT RECORDS OF AUCTION, AND RECORDS EVIDENCE THAT AUCTIONEER STATED THAT ITEMS IN QUESTION WOULD BE GROUPED AND THAT ITEMS WERE OFFERED WITH OPTION, AND USE OF TERM OPTION COUPLED WITH EARLIER EXPLANATIONS OF ITS MEANING CONSTITUTES ADEQUATE NOTICE TO BIDDERS. SALES - LOT BASIS - NUMBERED ITEMS WHILE, AS CONTENDED, BIDDERS WERE DENIED OPPORTUNITY TO BID ON EACH NUMBERED ITEM FROM 57 THROUGH 72, AND 75, SINCE BID ON ITEM 56 WOULD NOT MERELY BE BID ON THAT ITEM BUT WOULD CONSTITUTE BID ON ANY ITEMS IN GROUP, SALE OF LIKE ITEMS BY GROUP IS BOTH PRACTICAL AND EXPEDIENT METHOD OF SALE AND DOES NOT PRECLUDE BIDDER FROM PURCHASING SINGLE ITEM IN GROUP AND IS SPECIFICALLY AUTHORIZED BY PART 6AB) OF THE SALE BY REFERENCE PAMPHLET.

IN THE MATTER OF OKAW INDUSTRIES, INC., DECEMBER 16, 1974:

ON MAY 16, 1974, INVITATION FOR BIDS (IFB) 41-4347, AN AUCTION FOR THE SALE OF DEPARTMENT OF DEFENSE (DOD) SURPLUS PERSONAL PROPERTY, WAS CONDUCTED BY THE DEFENSE PROPERTY DISPOSAL SERVICE (DPDS), BARTOW, CALIFORNIA.

ITEMS 56 THROUGH 72 AND ITEM 75, ALL OF WHICH WERE DESCRIBED IN THE IFB AS GENERATOR SETS, USED AND IN POOR CONDITION, WERE OFFERED FOR SALE IN A UNIT OR GROUP. THE HIGH BIDDER ON ITEM 56 HAD THE PRIVILEGE OF CHOOSING ANY ONE OR MORE OF THE ITEMS IN THE GROUP WITHOUT REGARD TO NUMERICAL SEQUENCE. THE HIGH BIDDER CHOSE ALL OF THE ITEMS IN THE GROUP.

ON MAY 17, 1974, OKAW PROTESTED TO THE DEFENSE PROPERTY DISPOSAL REGION, DEFENSE SUPPLY AGENCY (DSA), THE AWARD OF ITEMS 56 THROUGH 75 UNDER THE SUBJECT IFB. BY LETTER DATED JUNE 5, 1974, THE DPDS, DSA, INFORMED OKAW THAT THERE WAS NO BASIS UPON WHICH TO SET ASIDE THE AWARD IN QUESTION. LETTER DATED JUNE 14, 1974, AND SUBSEQUENT CORRESPONDENCE OKAW PROTESTED TO OUR OFFICE.

WE HAVE BEEN INFORMED BY THE PROCURING ACTIVITY THAT THE GENERATORS IN QUESTION WERE TURNED OVER TO THE HIGH BIDDER IN JUNE 1974. IN ADDITION WE HAVE BEEN INFORMALLY ADVISED BY THE PRESIDENT OF OKAW THAT HE IS AWARE THAT THE GENERATORS HAVE BEEN RELEASED TO THE HIGH BIDDER AND THAT AS A CONSEQUENCE HE HAS NO FURTHER OPPORTUNITY TO OBTAIN ONE OF THE GENERATORS LISTED IN THE IFB FOR SALE, BUT THAT HE FEELS THAT AN INVESTIGATION OF THE GENERAL PRACTICE OF GROUPING ITEMS FOR SALE AT AN AUCTION AND THE SALE OF GENERATORS IN PARTICULAR IS WARRANTED.

SPECIFICALLY, OKAW CONTENDS THAT IT WAS DENIED THE OPPORTUNITY TO BID ON ITEMS NUMBERED 57 THROUGH 72 AND ITEM 75 SINCE THE AUCTIONEER GROUPED ITEMS 56 THROUGH 72 AND ITEM 75 TOGETHER. FURTHERMORE, OKAW CONTENDS THAT (1) IT WAS DENIED THE OPPORTUNITY TO MAKE A REASONABLE BID FOR ITEM 56 SINCE THIS ITEM "WAS KNOWN, OR THOUGHT TO BE KNOWN, BY OTHERS AS ONE OF SEVERAL TO BE BID UPON, DEPENDING UPON THE INDIVIDUAL BIDDER'S SUBJECTIVE DETERMINATION OF THE QUANTITY HE WOULD BUY;" (2) SUCH GROUPING WAS IN CONTRAVENTION OF SUBSECTION AA) PART 6 OF THE SALE BY REFERENCE PAMPHLET; (3) ALTHOUGH THE GENERATORS GROUPED TOGETHER WERE SIMILAR BY CATALOG DESCRIPTION, THEY WERE DIFFERENT IN CONDITION, SERVICE TIME, ACCESSORIES AND MOUNTING TRAILERS; (4) AN AMBIGUITY EXISTS AS TO THE WORD "COUNT;" (5) OKAW WAS NOT ADVISED OF THE AUCTIONEER'S INTENT TO GROUP ITEMS 56 THROUGH 72 AND ITEM 75 SO THAT A TIMELY OBJECTION COULD BE RAISED; AND (6) THE AUCTIONEER DID NOT STATE THAT THE SUCCESSFUL BIDDER ON ITEM 56 COULD CHOOSE AMONG THE REMAINING ITEMS.

THE PAMPHLET "SALE BY REFERENCE" (AUGUST 1973) CONTAINING INSTRUCTIONS, TERMS, AND CONDITIONS APPLICABLE TO SALES OF SURPLUS PROPERTY WAS INCORPORATED INTO THE IFB. PART 6 OF THE PAMPHLET PROVIDED THE FOLLOWING INSTRUCTIONS CONCERNING PROCEDURES TO BE FOLLOWED AT AUCTION SALES:

A. SUBMISSION OF BIDS AND AWARD.

(A) THE AUCTIONEER WILL OFFER EACH NUMBERED ITEM SEPARATELY. BIDDERS WILL COMMUNICATE THE AMOUNT OF THEIR BIDS EITHER ORALLY OR BY SUCH OTHER MEANS AS MAY BE RECOGNIZED BY AND ACCEPTABLE TO THE AUCTIONEER. UNLESS OTHERWISE PROVIDED IN THE INVITATION, BID OFFERS WILL NOT BE RECOGNIZED FROM ANY PERSON NOT PROPERLY REGISTERED AND WHERE APPLICABLE ISSUED A NUMBERED PADDLE.

(B) ALL ITEMS CATALOGED BY WEIGHT, COUNT OR MEASURE WILL BE SOLD IN LIKE UNITS UNLESS SPECIFICALLY CHANGED BY ANNOUNCEMENT BY THE AUCTIONEER. THE GOVERNMENT RESERVES THE RIGHT TO SELL IN SUCH UNITS OR GROUPS THEREOF AS IT DEEMS MOST EXPEDIENT. ITEMS WILL NOT BE SUBDIVIDED OR GROUPED UNLESS SPECIFIC ANNOUNCEMENT IS MADE.

(E) RECORDS OF THE GOVERNMENT, CERTIFIED BY THE CONTRACTING OFFICER, AS TO NAME AND NUMBER OF THE BIDDER, THE BID, AND AMOUNT THEREOF SHALL BE PRIME FACIE EVIDENCE OF THE CIRCUMSTANCES OF THE SALE, AND ALL DISAGREEMENTS WILL BE RESOLVED IN ACCORDANCE WITH SUCH RECORDS.

THE PROCEDURE APPLICABLE TO THE AUCTION SALE OF ITEMS BY GROUP, AS AUTHORIZED BY PART 6AB) IS CONTAINED IN A DPDS LETTER OF NOVEMBER 8, 1972, FROM THE ACTING DEPUTY COMMANDER TO THE CHIEFS OF ALL DISPOSAL REGIONS AND PROVIDES IN PERTINENT PART AS FOLLOWS:

1. EVEN THOUGH THE GOVERNMENT SPECIFICALLY RESERVES THE RIGHT TO SELL IN SUCH UNITS OR GROUPS THEREOF AS IT DEEMS MOST EXPEDIENT, IT HAS BEEN DETERMINED THAT AN UNFAIR RESULT CAN OCCUR WHEN ITEMS ARE GROUPED TOGETHER, UNLESS THE HIGH BIDDER IS GIVEN THE PRIVILEGE OF SELECTING A SINGLE ITEM OR MORE FROM WITHIN THE GROUP WITHOUT REGARD TO ITEM NUMERICAL SEQUENCE.

2. ACCORDINGLY, IN ALL AUCTION SALES WHEN THE AUCTIONEERS) GROUP ITEMS FOR SALE (UNLESS THE ITEMS ARE UNUSED AND IN IDENTICAL CONDITION) AND OFFER WITH "THE OPTION," THE HIGH BIDDER WILL BE PERMITTED TO SELECT ANY ONE OR MORE OF THE ITEMS FROM WITHIN THE GROUP. THE ONLY ALTERNATIVE TO THIS PROCEDURE WILL BE TO OFFER EVERY SINGLE LINE ITEM ON AN "EACH" BASIS. THIS PROCEDURE DOES NOT APPLY TO THOSE ITEMS FOR WHICH NO BIDS WERE RECEIVED, OR FOR WHICH BIDS WERE REJECTED DURING THE SALE. THESE ITEMS MAY BE GROUPED AT THE END OF THE SALE IN ORDER TO EXPEDITE DISPOSITION, IF CONSIDERED ADVISABLE.

THE GENERATORS IN QUESTION WERE LISTED IN THE IFB AS "1 EACH," AND DESCRIBED AS SIXTY CYCLE, 3 PHASE, USED GENERATORS, IN POOR CONDITION.

WHILE OKAW CONTENDS THAT THE WORD "COUNT" AS USED IN THE FIRST SENTENCE OF PART 6AB) IS AMBIGUOUS, IT IS OUR UNDERSTANDING THAT THIS WORD INCLUDES ANY ITEM DESCRIBED BY NUMBER SUCH AS 1 EACH, OR 10 EACH, AND WOULD, THEREFORE, INCLUDE THE GENERATORS LISTED AS ITEMS 56 THROUGH 72 AND ITEM 75. WITH REGARD TO OKAW'S ALLEGATION THAT THE GENERATORS ARE NOT LIKE UNITS, WE NOTE THAT THE GENERATORS IN QUESTION WERE ALL USED, IN POOR CONDITION OF THE SAME CYCLE AND PHASE. WHILE THE GENERATORS WERE NOT IDENTICAL, THEY WERE SUFFICIENTLY SIMILAR IN NATURE TO BE CONSIDERED LIKE UNITS. IN THIS REGARD, IT SHOULD BE NOTED THAT WHEN OFFERING THE GENERATORS FOR SALE, THE AUCTIONEER SPECIFICALLY EXCLUDED ITEMS 73, 74 AND 76 FROM THE GROUP AND OFFERED THEM SEPARATELY BECAUSE THESE THREE UNITS WERE 400 CYCLE. CONSEQUENTLY, WE SEE NO BASIS FOR QUESTIONING THE SALE OF THE GENERATORS IN QUESTION BY GROUP AND CONCLUDE THAT SUCH SALE WAS IN ACCORDANCE WITH THE PROVISIONS OF PART 6AB) AND THEREFORE DID NOT CONTRAVENE THE GENERAL RULE SET FORTH IN SUBSECTION (A) OF THIS PART.

THE LAST TWO ISSUES RAISED CONCERN WHETHER OKAW WAS ADVISED OF THE AUCTIONEER'S INTENT TO GROUP THE ITEMS IN QUESTION AND WHETHER THE AUCTIONEER STATED THAT THE SUCCESSFUL BIDDER ON ITEM 56 COULD CHOOSE AMONG THE REMAINING ITEMS IN THE GROUP. PART 6AB) PROVIDES THAT "*** ITEMS WILL NOT BE SUBDIVIDED OR GROUPED UNLESS SPECIFIC ANNOUNCEMENT IS MADE ***." THESE CONTENTIONS CONCERN QUESTIONS OF FACT, AND PURSUANT TO SUBSECTION (E) OF PART 6, THEY MUST BE RESOLVED BY THE RECORDS OF THE GOVERNMENT. THIS INSTANCE, THE RECORDS CONSIST OF TAPE RECORDINGS OF THE AUCTION. THESE TAPE RECORDINGS EVIDENCE THAT, WITH REGARD TO ITEMS 56 THROUGH 72, THE AUCTIONEER STATED THE FOLLOWING:

OK LADIES AND GENTLEMEN, NOW LISTEN CAREFULLY ON THESE GENERATORS WHAT I'M GOING TO SAY, AS YOU NOTICE WE ARE GOING TO OFFER THEM WITH THE OPTION HERE ITEM 56 - THEY GO CLEAR OVER THERE. AND ALSO ITEM 75 IS THE SAME THING. THEY GO RIGHT STRAIGHT THROUGH TO ITEM NUMBER 72 INCLUDING 72 AND ALSO 75 IS A 60 CYCLE.

SO WE ARE GOING TO GIVE YOU THE OPPORTUNITY TO TAKE 75 TOO, I SEE NO PROBLEM HERE IF WE JUST PAY ATTENTION AND YOU CAN STEP BACK TO 73, 74 AND 76 WHICH ARE 400 CYCLE.

DURING THE AUCTION OF ITEM 56, THE AUCTIONEER STATED:

*** WITH THE OPTION NOW, TAKE THEM ALL IF YOU WANT TO. YOU DON'T HAVE TO TAKE THEM ALL, YOU CAN TAKE ONE.

THE HIGH BIDDER ON ITEM 56, WHO BID $1,900, CHOSE TO TAKE ALL OF THE GENERATORS OFFERED. THE AUCTIONEER CONCLUDED THIS SALE BY STATING:

*** THAT IS THE WAY WE OFFERED THEM, YOU COULD BUY ONE OR BUY THEM ALL.

IT SHOULD BE NOTED THAT FIVE OTHER GROUP SALES WERE CONDUCTED PRIOR TO THE SALE OF THE GENERATORS; ITEMS 28 AND 29; 30 THROUGH 33; 34 THROUGH 46; 49 AND 50; AND 54 AND 55.

WHEN OFFERING ITEMS 28 AND 29, THE AUCTIONEER STATED THAT:

THE NEXT 28 AND 29 WITH THE OPTION, THE SAME WAY. THE NEXT WILL BE 28 AND 29, YOU CAN TAKE ONE OR THEM BOTH, SAME THING.

WHEN THE AUCTIONEER ASKED THE HIGH BIDDER ON ITEM 28 IF HE WANTED BOTH ITEMS, THE HIGH BIDDER CHOSE ITEM 29. THE AUCTIONEER THEN STATED:

OK FOLKS THAT IS THE WAY WE OFFERED THEM AND THAT IS THE WAY I HAVE TO SELL IT TO HIM SINCE HE REQUESTED. I DON'T LIKE IT. WE LIKE TO SELL THEM RIGHT DOWN THE LINE. BUT, ACCORDING TO A NEW RULE WHICH I'M AGAINST IF HE WANTS 29, HE CAN TAKE IT AHEAD OF 28. ***

FURTHERMORE, WITH REGARD TO GROUP 34 THROUGH 36, HE MADE THE FOLLOWING STATEMENT:

NOW LADIES AND GENTLEMEN, YOU LOOK AT ITEM 34 RIGHT THROUGH OVER TO AND INCLUDING ITEM 46 WITH THE OPTION, TAKE AS MANY AS YOU WANT RIGHT DOWN THERE. YOU DON'T HAVE TO TAKE THEM ALL NOW, YOU CAN TAKE ONE LOT OR YOU CAN TAKE AS MANY AS YOU WANT. SO IT DOESN'T DELETE THE SINGLE BUYER - IF HE ONLY WANTS ONE DOLLY THAT IS ALL HE HAS TO TAKE.

THE TAPE RECORDING CLEARLY SHOWS THE AUCTIONEER STATED THAT ITEMS 56 THROUGH 72 AND ITEM 75 WOULD BE GROUPED AND THESE ITEMS WERE TO BE OFFERED WITH THE OPTION. WHILE THE AUCTIONEER DID NOT STATE EXPLICITLY THAT THE HIGH BIDDER ON ITEM 56 COULD CHOOSE AMONG THE REMAINING ITEMS IN THE GROUP, HIS USE OF THE TERM OPTION, COUPLED WITH HIS EARLIER EXPLANATIONS OF ITS MEANING CONSTITUTES ADEQUATE NOTICE TO THE BIDDERS THAT THE HIGH BIDDER ON ITEM 56 COULD CHOOSE AMONG THE REMAINING ITEMS IN THE GROUP. THIS REGARD, IT SHOULD BE NOTED THAT OKAW COULD HAVE REQUESTED A CLARIFICATION OF THE PROCEDURE UTILIZED FROM THE AUCTIONEER AT THE TIME THE GENERATORS WERE OFFERED. HOWEVER, THE TAPE RECORDING DOES NOT EVIDENCE THAT SUCH A REQUEST WAS MADE.

IT IS TRUE THAT OKAW COULD NOT BID ON EACH NUMBERED ITEM IN THE GROUP AND THAT ITS BID ON ITEM 56, OR FOR THAT MATTER ON THE FIRST ITEM OFFERED IN ANY GROUP, WOULD NOT BE MERELY A BID ON THAT ITEM BUT WOULD CONSTITUTE ITS BID ON ANY OF THE ITEMS OFFERED IN THE GROUP. HOWEVER, THE SALE OF THE ITEMS BY GROUP IS BOTH A PRACTICAL AND EXPEDIENT METHOD OF SALE AND DOES NOT PRECLUDE A BIDDER FROM PURCHASING A SINGLE ITEM IN A GROUP. FURTHERMORE, IT IS SPECIFICALLY AUTHORIZED BY PART 6AB) OF THE SALE BY REFERENCE PAMPHLET. CONSEQUENTLY, WE SEE NO BASIS UPON WHICH TO QUESTION THIS PRACTICE.

FOR THE REASONS SET FORTH ABOVE, THE PROTEST OF OKAW IS DENIED.