B-82692, MARCH 30, 1949, 28 COMP. GEN. 550

B-82692, MARCH 30, 1949, 28 COMP. GEN. 550

BID DEPOSITS - RETENTION UPON BID WITHDRAWAL AN INVITATION TO BID ON GOVERNMENT SURPLUS PROPERTY WHICH PROVIDED THAT THE BID DEPOSIT WOULD BE RETAINED IN THE EVENT A BID IS WITHDRAWN AFTER OPENING, AND WHICH ALSO PROVIDED FOR THE RETENTION FROM THE BID DEPOSIT OF 25 PERCENT OF THE CONTRACT PRICE UPON THE PURCHASER'S DEFAULT UNDER THE CONTRACT, IS NOT TO BE REGARDED AS COMPELLING THE FORFEITURE OF THE ENTIRE AMOUNT OF THE BID DEPOSIT UPON WITHDRAWAL OF A BID AS TO LESS THAN ALL ITEMS, BUT, RATHER, REQUIRES THAT THE AMOUNT OF THE BID DEPOSIT BE PRORATED OVER THE LOTS ON WHICH THE BIDS WERE SUBMITTED, THAT IS, 25 PERCENT OF THE PRICE BID ON THE WITHDRAWN ITEM SHOULD BE RETAINED AND THE BALANCE REFUNDED TO THE BIDDER.

COMPTROLLER GENERAL WARREN TO THE SECRETARY OF THE NAVY, MARCH 30, 1949:

I HAVE YOUR LETTER OF JANUARY 6, 1949, WITH ENCLOSURES, REQUESTING A DECISION AS TO WHETHER THERE SHOULD BE RETAINED THE ENTIRE AMOUNT DEPOSITED BY ALBERT M. GOLDBERG WITH HIS BID WHEREIN HE OFFERED TO PURCHASE CERTAIN SURPLUS PROPERTY.

BY SALES CATALOG NO. B-34-49, THE NAVAL SUPPLY CENTER, SAN FRANCISCO, CALIFORNIA, OFFERED FOR SALE ON SEPTEMBER 29, 1948, CERTAIN PROPERTY WHICH WAS LOCATED AT PEARL HARBOR, T.H. THE INVITATION REQUIRED EACH BID TO BE ACCOMPANIED BY A DEPOSIT OF 25 PERCENT OF THE BID. ALSO, THE INVITATION CONTAINED THE FOLLOWING PROVISIONS:

NO BID WHICH IS NOT ACCOMPANIED BY THE DEPOSIT REQUIRED ABOVE WILL BE ACCEPTED OR CONSIDERED. BIDS MAY BE WITHDRAWN PRIOR TO THE BID OPENING BY THE DELIVERY OF WRITTEN OR TELEGRAPHIC NOTICE OF WITHDRAWAL PRIOR TO THE OPENING. THE WITHDRAWAL OF A BID AFTER THE OPENING WILL ENTITLE THE GOVERNMENT TO RETAIN THE DEPOSIT.

4. IN THE EVENT THE PURCHASER FAILS TO CARRY OUT ANY OF THE TERMS OF THIS CONTRACT, AN AMOUNT EQUAL TO ONE-QUARTER OF THE CONTRACT PRICE SHALL BE RETAINED BY THE GOVERNMENT FROM THE DEPOSIT MADE BY THE CONTRACTOR, OR, IF NO DEPOSIT WAS PAID, AN AMOUNT EQUAL TO ONE-QUARTER OF THE CONTRACT PRICE MAY BE RETAINED OR ASSESSED BY THE GOVERNMENT, AS LIQUIDATED DAMAGES AND THE PURCHASER SHALL LOSE ANY RIGHT, TITLE AND INTEREST THEREIN, AND IN AND TO THE MATERIAL.

IN RESPONSE TO THE INVITATION, ALBERT M. GOLDBERG, SOUTH SAN FRANCISCO, CALIFORNIA, SUBMITTED A BID DATED SEPTEMBER 23, 1948, WHEREIN HE OFFERED TO PURCHASE EIGHT LOTS OF ARTICLES FOR A TOTAL PRICE OF $39,998.95, AND SUBMITTED WITH HIS BID A DEPOSIT OF $10,000. INCLUDED IN THE ARTICLES OFFERED TO BE PURCHASED WAS LOT NO. 21, COVERING 22,537 HERRINGBONE TWILL JACKETS FOR &1.02 EACH, A TOTAL PRICE OF $22,987.74.

IT APPEARS FROM A REPORT DATED OCTOBER 22, 1948, FROM THE SUPPLY OFFICER, NAVAL SUPPLY CENTER, SAN FRANCISCO, CALIFORNIA, THAT ON OCTOBER 1, 1948, MR. GOLDBERG ADVISED BY TELEPHONE THAT HE HAD MAILED A LETTER REQUESTING WITHDRAWAL OF HIS BID. A LETTER DATED OCTOBER 1, 1948, WAS RECEIVED AT THE NAVAL SUPPLY CENTER, PEARL HARBOR, T.H., WHEREIN MR. GOLDBERG STATED THAT THAT LETTER WAS IN LIEU OF HIS LETTER OF SEPTEMBER 26 CANCELING THE BID AS TO LOT NO. 21. IN THE REFERRED-TO REPORT, IT IS STATED THAT NO LETTER DATED SEPTEMBER 26 WAS RECEIVED FROM MR. GOLDBERG AND THAT BY TELEGRAM DATED OCTOBER 20, 1948, MR. GOLDBERG WAS ADVISED THAT HE HAD BEEN AWARDED LOT NO. 21--- THE ONLY LOT AWARDED TO HIM.

IN AN AFFIDAVIT DATED OCTOBER 28, 1948, MR. GOLDBERG REQUESTED THAT HE BE PERMITTED TO WITHDRAW HIS BID WITHOUT FORFEITURE OF HIS BID DEPOSIT SINCE HE DID NOT INTEND TO QUOTE ON LOT NO. 21, THE QUOTATION HAVING BEEN INTENDED FOR CERTAIN TROUSERS OFFERED FOR SALE AND, ALSO, FOR THE REASON THAT SINCE HIS BID ON LOT NO. 21 WAS HIGHER THAN THE OTHER BIDS THEREON, THE CONTRACTING OFFICER SHOULD HAVE REQUESTED HIM TO VERIFY HIS BID.

THE DESCRIPTION OF LOT NO. 21 WAS CLEAR AND UNAMBIGUOUS AND LEFT NO ROOM FOR DOUBT THAT THE ARTICLE OFFERED FOR SALE THEREUNDER WAS A QUANTITY OF JACKETS. THE RESPONSIBILITY FOR THE PREPARATION OF THE BID SUBMITTED IN RESPONSE THERETO WAS UPON THE BIDDER. SEE FRAZIER-DAVIS CONSTRUCTION COMPANY V. UNITED STATES, 100 C.1CLS. 120, 163. CONSEQUENTLY, IF MR. GOLDBERG INTENDED THE QUOTATION MADE ON LOT NO. 21 TO BE ON A QUANTITY OF TROUSERS--- WHICH WERE NOT LISTED ON TE SAME PAGE AS THE JACKETS COVERED BY LOT NO. 21--- SUCH ERROR WAS DUE SOLELY TO HIS OWN NEGLIGENCE OR OVERSIGHT AND WAS IN NO WAY INDUCED OR CONTRIBUTED TO BY THE GOVERNMENT. ANY ERROR THAT WAS MADE IN THE BID WAS UNILATERAL, NOT MUTUAL. SEE OGDEN AND DOUGHERTY V. UNITED STATES, 102 C.CLS. 249; AND SALIGMAN, ET AL. V. UNITED STATES, 56 F.1SUPP. 505, 507.

THE ABSTRACT OF BIDS SHOWS THAT THE 12 OTHER BIDS ON LOT NO. 21 RANGED FROM $15,000 TO $876.26. IT APPEARS THAT THE DIFFERENCE BETWEEN THE BID OF MR. GOLDBERG IN THE AMOUNT OF $22,987.74 ON LOT NO. 21 AND THE OTHER BIDS THEREON DID NOT PLACE THE CONTRACTING OFFICER ON NOTICE OF THE PROBABILITY OF ERROR IN SAID BID. IN VIEW OF THE WIDE RANGE IN BIDS RECEIVED ON SURPLUS PROPERTY A MERE DIFFERENCE IN THE PRICES BID WOULD NOT NECESSARILY PLACE A CONTRACTING OFFICER ON NOTICE OF AN ERROR AS WOULD A LIKE DIFFERENCE IN THE PRICES QUOTED ON NEW EQUIPMENT, SUPPLIES, ETC., TO BE FURNISHED TO THE GOVERNMENT. SEE 16 COMP. GEN. 596; 17 ID. 388; ID. 601; ID. 976. UNDER THE CIRCUMSTANCES, IT WOULD NOT APPEAR THAT THE CONTRACTING OFFICER WAS REQUIRED TO REQUEST MR. GOLDBERG TO VERIFY HIS BID AS CONTENDED BY SAID BIDDER.

THE INVITATION REQUIRED A DEPOSIT OF 25 PERCENT OF THE BID AND PROVIDED THAT IF A BID BE WITHDRAWN AFTER OPENING THE GOVERNMENT WOULD BE ENTITLED TO "RETAIN THE DEPOSIT.' HOWEVER, IT WOULD SEEM REASONABLE TO ASSUME THAT IT WAS NOT THE INTENTION OF THIS PROVISION TO COMPEL FORFEITURE OF THE ENTIRE AMOUNT OF THE BID DEPOSIT IN THE CASE OF THE WITHDRAWAL OF THE BID AS TO LESS THAN ALL ITEMS. RATHER, IT WOULD APPEAR THAT THE AMOUNT OF THE DEPOSIT SHOULD BE PRORATED OVER THE LOTS ON WHICH BIDS WERE SUBMITTED. THAT BASIS THE AMOUNT OF THE DEPOSIT SUBMITTED BY MR. GOLDBERG WHICH WAS APPLICABLE TO LOT NO. 21 WAS $5,746.94 (25 PERCENT OF $22,978.74). ACCORDINGLY--- AND AS RECOMMENDED BY YOU--- $5,746.94 OF THE DEPOSIT SHOULD BE RETAINED BY THE GOVERNMENT AND THE BALANCE OF $4,253.06 SHOULD BE REFUNDED TO MR. GOLDBERG IF HE IS OTHERWISE ENTITLED THERETO.