B-125683, OCT. 10, 1955

B-125683, OCT. 10, 1955

TO THE HONORABLE, SECRETARY OF THE NAVY:

REFERENCE IS MADE TO YOUR LETTER OF OCTOBER 3, 1955, WITH ENCLOSURES, REQUESTING DECISION AS TO THE ACTION THAT SHOULD BE TAKEN CONCERNING CONTRACT NO. N228S-11207, WITH THE BASTON TIRE AND SUPPLY COMPANY, OAKLAND, CALIFORNIA.

THE RECORD DISCLOSES THAT BY INVITATION FOR BIDS NO. B-32-56, THE NAVAL SUPPLY CENTER, DISPOSAL DIVISION, OAKLAND, CALIFORNIA, REQUESTED BIDS ON VARIOUS ITEMS OF MISCELLANEOUS SURPLUS MATERIAL OFFERED FOR SALE BY THE GOVERNMENT. VARIOUS PARAGRAPHS OF THE GENERAL SALE TERMS AND CONDITIONS PROVIDE AS FOLLOWS:

"1. INSPECTION.--- BIDDERS ARE INVITED AND URGED TO INSPECT THE PROPERTY TO BE SOLD PRIOR TO SUBMITTING BIDS. PROPERTY WILL BE AVAILABLE FOR INSPECTION AT THE PLACES AND TIMES SPECIFIED IN THE INVITATION. THE GOVERNMENT WILL NOT BE OBLIGED TO FURNISH ANY LABOR FOR SUCH PURPOSE. NO CASE WILL FAILURE TO INSPECT CONSTITUTE GROUNDS FOR A CLAIM OR FOR THE WITHDRAWAL OF A BID AFTER OPENING.

"2. CONDITION OF PROPERTY.--- ALL PROPERTY LISTED HEREIN IS OFFERED FOR SALE "AS IS" AND ,WHERE IS," AND WITHOUT RECOURSE AGAINST THE GOVERNMENT. IF IT IS PROVIDED HEREIN THAT THE GOVERNMENT SHALL LOAD, THEN "WHERE IS" MEANS F.O.B. CONVEYANCE AT THE POINT SPECIFIED IN THE INVITATION. THE DESCRIPTION IS BASED ON THE BEST AVAILABLE INFORMATION, BUT THE GOVERNMENT MAKES NO GUARANTY, WARRANTY, OR REPRESENTATION, EXPRESSED OR IMPLIED, AS TO QUANTITY, KIND, CHARACTER, QUALITY, WEIGHT, SIZE, OR DESCRIPTION OF ANY OF THE PROPERTY, OR ITS FITNESS FOR ANY USE OR PURPOSE, AND NO CLAIM WILL BE CONSIDERED FOR ALLOWANCE OR ADJUSTMENT OR FOR RESCISSION OF THE SALE BASED UPON FAILURE OF THE PROPERTY TO CORRESPOND WITH THE STANDARD EXPECTED; THIS IS NOT A SALE BY SAMPLE.

"20. ADJUSTMENT FOR VARIATION IN QUANTITY: ANY VARIATION BETWEEN THE QUANTITY OR WEIGHT LISTED FOR ANY ITEM AND THE QUANTITY OR WEIGHT OF SUCH ITEM TENDERED OR DELIVERED TO THE PURCHASER WILL BE ADJUSTED ON THE BASIS OF THE UNIT PRICE QUOTED FOR SUCH ITEMS; BUT NO ADJUSTMENT FOR SUCH VARIATION WILL BE MADE WHERE AN AWARD IS MADE ON A "PRICE FOR THE LOT" BASIS. * * *

"22. * * *

ALL BIDS MUST BE SUBMITTED IN TERMS OF UNITS AS STATED.'

IN RESPONSE TO THE INVITATION, BASTON TIRE AND SUPPLY COMPANY SUBMITTED A BID DATED JULY 7, 1955, OFFERING TO PURCHASE TWO OF THE VARIOUS ITEMS. ITEM 3, AND THE COMPANY'S BID THEREON, IS AS FOLLOWS:

TABLE

TO BE SUPPLIED BY BIDDER

DESCRIPTION PRICE TOTAL

AND LOCATION UNIT OF BID PRICE "ITEM NO. OF PROPERTY QUANTITY MEASURE PER UNIT BID --------- ------------------------------------------------------- -------- APA MISCELLANEOUS MATERIAL, 5,000 POUND .0840 420.00

CONSISTING OF: ABRASIVE FOR THE LOT

WHEELS, VARIOUS SIZES AND GRITS;

NIPPLES, STEEL, CADMIUM COATED;

TY'S DOUBLE; RETAINERS, SHAFTS,

SET SCREWS, BUSHING, TUBE ASSEMBLIES,

GASKETS; DELIVERY VALVE

NOZZLES; COVERS; PLUNGERS AND

BARRELS; LEAKOFF NIPPLE NUTS; PINS;

WASHERS, DOWELS; SPACER AND DOWEL

ASSEMBLIES; GRIP HANDLES; OIL SEALS;

CROWN NUTS; CAP SCREWS; GREASE SEALS;

HOSE; DRUMS; KEYS; STUDS; WIRE BRUSH WHEELS;

RIVETS.

WEIGHT SHOWN INCLUDES WEIGHT OF CONTAINERS, IF ANY. NO DEDUCTION

WILL BE MADE FOR WEIGHT OF CONTAINERS.

ACQUISITION: $1,509.10

APPARENTLY UNUSED - IN GOOD CONDITION.

LOCATION: BLDG. 715.'

BY LETTER OF JULY 8, 1955, THE BASTON TIRE AND SUPPLY COMPANY ADVISED THE CONTRACTING OFFICER AS FOLLOWS:

"PLEASE REFER TO INVITATION NO. B-32-56, ITEM NO. 3, ON WHICH WE BID $420.00 FOR THE LOT. IN COMPUTING THE PRICE PER UNIT, IT SHOULD HAVE (BEEN) SHOWN AS .0840 OR $420.00 FOR THE LOT.'

A STATEMENT OF THE AMOUNTS OF THE BIDS RECEIVED ON ITEM 3 INDICATES THAT ALL OF THE OTHER BIDS WERE ON A PER POUND BASIS AND THAT THE PRICES QUOTED WERE $0.0535, $0.0413, $0.032, $0.0211 AND $0.002 PER POUND. THE BID OF THE BASTON TIRE AND SUPPLY COMPANY ON ITEMS 3 AND 5 WAS ACCEPTED ON JULY 22, 1955.

ON AUGUST 2 THE CONTRACTOR WENT TO THE NAVAL SUPPLY CENTER TO PICK UP THE MERCHANDISE AND DURING THE LOADING AND WEIGHING, IT WAS DISCOVERED THAT ITEM NO. 3 ACTUALLY CONSISTED OF 25,940 POUNDS OF MATERIAL. THE CONTRACTOR WAS PERMITTED TO TAKE 10,280 POUNDS, AFTER DEPOSITING AN ADDITIONAL $500, AND THERE STILL REMAINS AT THE NAVAL DEPOT 15,660 POUNDS.

THE CONTRACTOR CONTENDS THAT HIS BID OF $420 WAS INTENDED "FOR THE LOT" AND THAT HE IS ENTITLED TO RECEIVE THE FULL AMOUNT OF THE MATERIAL INCLUDED IN ITEM 3 FOR THAT PRICE. IN SUPPORT OF SUCH CONTENTION, THE CONTRACTOR STATES THAT HE INSPECTED THE MATERIAL TWICE BEFORE HE SUBMITTED HIS ID; THAT IT WAS IMPOSSIBLE TO OBTAIN AN ACTUAL PHYSICAL COUNT OF THE NUMBER OF GRINDING WHEELS IN THE LOT AS THERE WERE FOUR OR FIVE HUNDRED- POUND BOXES ON TOP OF SMALLER ONES AND THEY WERE ALL NAILED AND STRAPPED SHUT; THAT THE LOT WAS REVIEWED AS CAREFULLY AS HE COULD AND HE DETERMINED IT WAS WORTH $420 TO HIM; AND THAT THE PRICE OF $0.0840 PER POUND SHOWN IN THE UNIT PRICE COLUMN WAS ARRIVED AT BY DIVIDING THE $420 BY 5,000 POUNDS SHOWN IN THE INVITATION AS THE ESTIMATED WEIGHT.

ALTHOUGH THE BID FOR THE LOT ON ITEM 3 WAS NOT RESPONSIVE TO THE INVITATION BECAUSE IT WAS NOT SUBMITTED ON A UNIT BASIS AS REQUIRED, THE BIDDER HAD THE RIGHT TO SUBMIT A BID ON SUCH CONDITIONS AS HE SAW FIT AND IT WAS UP TO THE CONTRACTING OFFICER TO REJECT ANY BID NOT CONFORMING TO THE INVITATION. THE FACT IS, HOWEVER, THAT THE BID WAS ACCEPTED AS SUBMITTED. EVEN THOUGH THE CONTRACTING OFFICER MAY HAVE THOUGHT HE WAS ACCEPTING THE BID ON A PER-POUND BASIS, A REASONABLE INTERPRETATION OF THE BID DOES NOT PERMIT THE CONCLUSION THAT HE ACCOMPLISHED THAT RESULT. IS THEREFORE OUR OPINION THAT THE ACCEPTANCE OF THE OFFER CONSUMMATED A CONTRACT ENTITLING THE BIDDER TO RECEIVE THE LOT FOR $420.

IT IS POSSIBLE THAT THE GOVERNMENT MIGHT TECHNICALLY BE ABLE TO ESCAPE LEGAL LIABILITY UNDER THE CONTRACT DUE TO THE IMPROPER ACCEPTANCE OF THE BID BUT THERE MAY NOT BE OVERLOOKED THE FACT THAT THE CONTRACT NOW HAS BEEN PARTIALLY PERFORMED. FURTHERMORE, THERE IS NOTHING IN THE RECORD TO INDICATE THAT THE CONTRACTOR WILL RECEIVE AN UNCONSCIONABLE BARGAIN. HE POINTS OUT, THE INVITATION SHOWS THE ACQUISITION COST OF THE MATERIAL CONTAINED IN THE LOT AS $1,509.10, AND, BASED ON THE UNIT PRICE OF $0.0840, THE SALES PRICE OF THE MATERIAL WOULD HAVE EXCEEDED THAT AMOUNT, CONSIDERING THESE FACTS TOGETHER WITH THE FACT THAT THE SALE WAS ON "AS IS" "WHERE IS" BASIS AND THE FURTHER FACT THAT IT WAS IMPOSSIBLE FOR THE BIDDER, UPON INSPECTION, TO DETERMINE WITH ANY DEGREE OF CERTAINTY THE TYPE OF QUANTITY OF THE MATERIAL CONTAINED IN THE ITEM, THE CONCLUSION APPEARS REQUIRED THAT THE BASTON TIRE AND SUPPLY COMPANY IS ENTITLED TO RECEIVE ALL OF THE MATERIAL CONTAINED IN ITEM 3 FOR ITS ACCEPTED BID PRICE OF $420 "FOR THE LOT.'